RETT blocker avoidance regulation

According to the German Real Estate Transfer Tax Act (RETT Act), the transfer of at least 95 per cent of the interests in a partnership holding domestic real estate or the acquisition of at least 95 per cent of the shares in a corporation holding domestic real estate triggers Real Estate Transfer Tax (RETT), regardless of whether the transfer or the acquisition has been performed directly or indirectly. In the case of an indirect transfer or acquisition, the RETT Act requires that the 95 per cent threshold has been met at each company level.

The evaluation of the 95 per cent threshold is exclusively based on a civil law approach, not on an economic approach. Based on the civil law approach, RETT could have been avoided by introducing a special-purpose vehicle (RETT Blocker Structure) through which the investor acquired only 94.9 per cent of the shares in the relevant real property holding company (or target).

In addition, the investor would hold 94.9 per cent of the interests in a partnership that acquired the remaining 5.1 per cent of the shares in the target…

If you are registered and logged in to the site, click on the link below to read the rest of the Taylor Wessing briefing. If not, please register or sign in with your details below.

Briefings from Taylor Wessing

View more briefings from Taylor Wessing

Analysis from The Lawyer

  • merger deal

    Corporate crunch time: who will triumph at The Lawyer Awards 2014?

    As the equity capital markets rocketed back into favour and global M&A saw at least a partial return to form, there have been some rich pickings for The Lawyer’s Corporate Team of the Year award shortlisted firms in 2014. 

  • singapore orchid

    Singapore: Cash course

    The city-state is working hard to become a global wealth management hub, and law firms are gearing up for a prosperous new world

View more analysis from The Lawyer


5 New Street Square

Turnover (£m): 228.00
No. of lawyers: 860
Jurisdiction: UK
No. of offices: 4
No. of qualified lawyers: 67 (International 50)