Family foundation – obligation to draw up an inventory of assets

The initial inventory of assets should be drawn up by the Founder, who is required to compile a list of the assets contributed to the founding fund. Thereafter, the management board is responsible for keeping the inventory up to date. The management board is therefore responsible for ensuring that the inventory remains current. The regulations require that the inventory of assets be kept in writing.

Pursuant to Article 27(1) of the Family Foundation Act, the inventory of assets must contain the following elements:

• Property rights contributed to the Family Foundation;
• Identification of the person contributing the property rights;
• a description of the type of property contributed;
• a specification of the value of the contributed property, determined according to its condition and prices at the time of contribution;
• a determination of the tax value.

The tax value should be determined in accordance with Article 37 of the Accounting Act. Thus, the tax value of the property is the price that was not previously included in the costs of generating revenue and which the founder would have regarded as such a cost had they sold the item before transferring it to the family foundation. This price may not exceed the market value of the property. Determining this value is important for establishing how much tax the family foundation will have to pay should it decide to sell the property in the future. In other words, this is the purchase price of the property that the founder could have set upon sale before transferring it to the foundation, and this value affects the amount of tax the foundation will have to pay should it sell the property.

Furthermore, for the purposes of personal income tax, the proportion of the value of the assets contributed to the family foundation by each of the founders or by the family foundation itself is determined.

For tax purposes, property contributed by a family foundation is deemed to be property contributed by persons other than the founder, their spouse, descendants, ascendants or siblings, e.g. property contributed by a company in which the founder is involved or by the founder’s partner who is not their spouse.

The provisions – in particular Article 114 of the Family Foundation Act – do not impose an obligation on the management board or the founder to submit an inventory of assets to the register of family foundations. Therefore, the current inventory of assets is an internal document which should be kept amongst the family foundation’s records. However, it is important to note that, pursuant to Article 84 of the Family Foundation Act, the National Tax Administration may require the family foundation, within a period set by it of not less than 14 days from the date of service of the request, to provide, amongst other things, an inventory of assets.

Finally, it is worth mentioning issues relating to the frequency of updating the inventory of assets. The regulations do not specify how often the management board should update the inventory. The wording of Article 84 of the Family Foundation Act, cited above, may prove helpful. The fact that the National Tax Administration may request an inventory of assets within a period of not less than 14 days suggests that changes to the family foundation’s assets should be reflected in the inventory within two weeks of their occurrence.

Author

Agata Bączkowska

Adwokat, Senior Associate

She specializes in commercial and civil law. She has gained experience in Warsaw law firms providing comprehensive services to companies and a law firm specializing in labor law. She has extensive experience in corporate consulting. She has participated in mergers and acquisitions at every stage of the process, from pre-transaction legal examination to fulfillment of regulatory requirements related to the transformation process. She prepares and reviews contracts entered into by clients and advises in cases of…

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