In a recently published decision, the BFH had to decide on a sale of a partnership interest that was contractually agreed to be subject to the approval of the sale by the German Federal Cartel Office (Bundeskartellamt) (FCO). The BFH ruled that the beneficial ownership in such a case is transferred at the time of the approval of the FCO even if, in the sales contract, an earlier transfer date had been agreed.
The BFH based its decision on former jurisprudence and followed the argument that the beneficial ownership of a buyer in a right/ asset is subject to the fact that the possession of his legal position to purchase such a right/asset cannot be withdrawn from the buyer against his will anymore.
In the case at hand, the BFH held that it was not within the buyer’s discretion to influence the decision of the FCO and therefore the buyer’s ownership in the partnership interest could have been withdrawn without his consent. This led to the court’s conclusion that the beneficial ownership had not passed from the seller to the buyer before the FCO approved the sale.
The question when the beneficial ownership was transferred became relevant because the partnership interest was sold for a consideration in cash and a consideration in kind, the latter having been shares in a foreign stock corporation (Swiss AG). As the Swiss AG shares needed to be valued at their fair market value at the time of the sale in order to determine the sales price of the partnership interest, the taxpayer was interested in an early valuation date because the stock prices had subsequently risen. The BFH however decided that the shares have to be evaluated with the fair market value (stock price) at the time of the transfer of the beneficial ownership, i.e. the approval of the FCO.
