Recent developments

Have there been any notable recent developments in the provision of private client and offshore services in your jurisdiction, including any regulatory changes or case law?

The implementation of the EU Fourth Money Laundering Directive (2015/849/EC) in 2017 involved the enactment of new laws (eg, the Financial Markets Anti-Money Laundering Act) and the amendment of various statutory provisions, including the Lawyers’ Act, the Banking Act and the Insurance Contract Act. Subject to the fulfilment of certain legal requirements regulated entities must (among others) apply customer due diligence (ie, either simplified customer due diligence measures or enhanced customer due diligence measures).

Beneficial owners, as defined in the Law on the Register of Beneficial Owners, must be registered in a separate, non-publicly available register until June 2018.

Individual taxation

Residence and domicile

How is residence/domicile determined for tax liability purposes in your jurisdiction?

The residence of an individual determines whether he or she is tax liable in Austria. Individuals are resident in Austria under Austrian domestic tax law (ie, subject to unlimited tax liability) if they have either their domicile or habitual place of abode in Austria. In short, a domicile exists if the individual has an accommodation in Austria and it can be assumed that he or she will keep using this place to reside. Staying in Austria for a period exceeding six months is deemed to establish a habitual place of abode in Austria.

For individuals who have their centre of vital interests outside of Austria, unlimited tax liability can be avoided under certain conditions (see the section on planning considerations below).

Income

Describe the income tax regime in your jurisdiction (including tax base, rates, filing formalities and any exemptions, reliefs or deductions).

Austrian tax law recognises seven categories of income for individuals:

  • agriculture and forestry;
  • professional and other independent services;
  • trade and business;
  • employment income;
  • investment income;
  • rents, lease payments and royalties; and
  • other specified income.

The first and the third categories of income are calculated based on a profit and loss account. In case of smaller businesses, also in the field of agriculture and forestry, as well as for the second category income, the surplus of business income over business expenses is applied. For the other categories, the surplus of receipts over expenses is used. Apart from several restrictions, losses from the respective income categories are, in principle, deductible.

Generally, a tax return must be filed if an individual’s taxable income (ie, the sum of income from the seven income categories minus losses, special expenses, exceptional expenditure and deductions) exceeds €11,000. If an individual receives income only from employment, investment or alienation of real estate, then he or she is not in all cases obliged to file income tax returns. The tax return must be filed before April 30 of the following calendar year, or June 30 if it is submitted electronically. For taxpayers represented by a tax adviser, the deadline to file a tax return is longer. Non-residents must file a tax return if their taxable income exceeds €2,000.

The income tax rate is progressive, ranging from 25% for the lowest tax bracket for income exceeding €11,000 to 55% for income exceeding €1 million. With respect to income assessed by means of withholding (ie, income from employment, investment income, income derived from alienation of real estate, with respect to non-residents income from art, sports or entertainment-related activities, as well as lecturing) special regimes apply (see below).

Capital gains

Describe the capital gains tax regime in your jurisdiction (including tax base, rates, filing formalities and any exemptions, reliefs or deductions).

Capital gains are part of the income category ‘income from investment’, which consists of income from:

  • capital gains (ie, alienation of shares, bonds and fund units);
  • capital (ie, dividends, interest and distributions of private foundations); and
  • derivatives (ie, margin payments, option premiums, settlement of forwards, futures and options, and income derived from derivative financial instruments).

It is fully taxable at a special rate of 27.5%, while a special rate of 25% applies only with regard to income derived from saving accounts, bank deposits and non-securitised other receivables from certain banks. Foreign income is subject to the same income tax as domestic income.

In most cases, if an Austrian custodian (ie, banks) or an Austrian paying agent (ie, Austrian companies paying dividends to their shareholders) is involved, a final withholding tax is levied on investment income for individuals that are fully tax liable in Austria. However, if no final withholding tax is levied, then the investment income must be taxed at the same rate as in the case of the final withholding tax (25% or 27.5%) by annual assessment of the taxpayer.

An option to taxation at the regular progressive income tax rate is available. Capital gains are in principle subject to limited tax liability of non-residents, as far as the sale of participations of at least 1% is concerned, but may be fully relieved if a double taxation convention applies.

Lower rates apply concerning dividends and interest and royalty payments made to non-residents who are resident in countries with which Austria has concluded a double tax convention.

Inheritance and lifetime gifts

Describe the inheritance and gift tax regime in your jurisdiction (including tax base, rates, filing formalities and any exemptions, reliefs or deductions).

Under existing Austrian law, no inheritance or gift tax exists, but donations or gifts must be reported to the Austrian authorities if they fulfil certain criteria. Donations or gifts do not have to be reported if they take place between relatives and do not exceed €50,000 per year or between non-relatives if they do not exceed €15,000 over five years. Intentional violation of the notification obligation may trigger fines of up to 10% of the fair market value of the assets transferred.

Real estate

What taxes apply to individuals’ acquisition and disposal of real estate in your jurisdiction?

Capital gains from the alienation of immovable property are, in principle, subject to income tax at a special rate of 30%. Private residential property is exempt from tax if it serves as a principal residence for a continuous period of at least two years since the acquisition of the property or for a continuous period of at least five years before alienation within a 10-year period.

Further, the alienation of self-constructed buildings is tax exempt. The special tax rate applies only if the real estate has not been used for commercial activities before alienation. The basis for taxation is the difference between the sale price and the acquisition costs. The offset of losses resulting from the private alienation of real estate is restricted. A special withholding tax is imposed if the sale of Austrian real estate is handled by an attorney or notary who also handles real estate transfer tax, otherwise advance payments of the special income tax must be made by the individual.

The alienation of real estate is, in principal, exempt from value added tax (VAT). An option to apply VAT is available. In addition, the alienation of Austrian real estate falls under the scope of real estate transfer tax. The tax base is, in general, the value of the consideration – that is, the purchase price. The tax rate amounts to 3.5%, except if the transfer is carried out between relatives or in certain cases, where real estate is not transferred by means of a sale and purchase agreement. The acquisition of real estate also triggers registration fees of 1.1% of the market value of the registered right (ownership), which is generally equal to the purchase price.

Non-real estate assets

Do any taxes apply to the acquisition and disposal of other assets apart from real estate?

Apart from the special regimes of taxation for income on capital gains as regards income from the alienation of capital instruments and real estate (see above “What taxes apply to individuals’ acquisition and disposal of real estate in your jurisdiction?”), Austrian tax law foresees a tax of speculative gains regarding other non-business assets. Income derived from the alienation of private assets sold within one year of the acquisition (ie, the difference between the acquisition costs of the asset in question and its selling price) is taxed at the progressive tax rate.

Other applicable tax regimes

Are any other direct or indirect tax regimes relevant to individuals?

Self-employed individuals must take VAT aspects into account. Real estate transfer tax must be taken into account for transfers of real estate.

Stamp duty issues must be considered for certain contracts (mainly rental contracts for business premises, assignments of rights, concrete sureties unless they constitute an abstract guarantee and mortgages), if a written deed (document) is established and signed in a way that triggers Austrian stamp duty.

Planning considerations

Are there any special tax planning considerations for individuals with a link to your jurisdiction?

A tax neutral step-up is available for assets (both in business and non-business property) held by a private individual if Austria gains a right of taxation with respect to these assets due to relocation to Austria. The step-up ensures that only those hidden reserves that arose while the taxpayer was subject to Austrian tax liability will be taxed in case of a later disposition.

In case of relocation to Austria, special privileges may apply. If the conditions stipulated in the Secondary Residence Regulation are met, it is possible that the taxpayer – despite having an Austrian residence – is subject to only limited tax liability including only sources of income derived from Austria. In detail, the Secondary Residence Regulation provides for the following conditions:

  • the centre of vital interests of the taxpayer has to be abroad for more than five years;
  • the domestic residence may not be used for more than 70 days in a calendar year (a record must be kept of the days actually spent in the domestic residence); and
  • the domestic residence may not be the residence of the partner being subject to unlimited tax liability in Austria.

Parallel to the Secondary Residence Regulation, Austrian tax law foresees a relocation allowance that is available only to certain persons whose relocation serves the public interest (ie, artists, scientists and sportspeople) and enables the Ministry of Finance to grant relief by decree with regard to non-Austrian sourced income (ie, relief of worldwide tax). Further, a tax-exempt amount of up to 30% of taxable income is available on request under certain circumstances (as a lump sum deduction of expenses).

The salary or fee of a person is not deductible for the Austrian employer or principal for the base of income tax as far as it exceeds €500,000 per year, which has to be applied on the overall sum of salaries and service fees received by the person from the same group of companies.

Trusts, foundations and charities

Trusts

Are trusts legally recognised in your jurisdiction? If so, what types are available and most commonly used?

Generally, Austrian law does not recognise the legal institution of trusts, but it is familiar with the term. Austria has neither codified nor ratified the Hague Trust Convention, which governs the recognition of trusts in the signatory states. However, following a 2017 European Court of Justice ruling (Panayi Trusts) which upheld the cross-border mobility of trusts and foundations, Austria must accept the legal influx of foreign trusts.

Various legal institutions exist under Austrian law whose functions are comparable to different types of trust. For purposes of asset management and estate planning, Austrian law recognises private foundations. As a transfer mechanism for financial transaction, Austrian law provides for investment and pension funds, but also a trusteeship, which is a separation of property in rem and beneficial ownership.

What rules and procedures govern the establishment and maintenance of trusts?

There are no provisions concerning the establishment and maintenance of trusts.

How are trusts taxed in your jurisdiction?

A foreign trust may be regarded as either a ‘transparent’ (ie, disregarded for tax purposes) or an ‘intransparent’ entity (ie, a taxable subject for corporate income tax purposes). In case of a transparent trust, the income of the trust is directly allocated either to the beneficiaries or the settlor, and is subject to tax in their hands.

An intransparent foreign trust is regarded as a taxable entity and, as such, not subject to tax in Austria unless – in accordance with the relevant double tax convention – a right of taxation is allocated to Austria as the state of source. Distributions of the (intransparent) trust to individuals are subject to Austrian income tax. In case of a distribution by a foreign foundation or estate that is comparable to an Austrian private foundation, the special tax rate of 27.5% applies to the distribution.

In principle, a foreign trust is treated as intransparent and is deemed a taxable entity for income tax purposes if it fulfils the criteria of a discretionary trust as defined by the case law of the Supreme Administrative Court. The court’s criteria include that the trust must be irrevocable and the beneficiaries must neither have a right to dispose of the trust’s assets nor influence the management of the trust. If not all of those criteria are met, the trust is regarded as transparent and its assets are allocated to the beneficiaries from an Austrian tax perspective. Whether the trust is treated as transparent or intransparent must be determined on a case-by-case basis, considering the overall picture of the trust at hand.

Foundation entrance duty (applicable for donations to the trust) is imposed on donations to intransparent trusts if the donating person is resident in Austria for tax purposes. Foundation entrance duty amounts to 2.5% or 25% of the value of the donations. The tax rate of 25% is applicable in the case that either:

  • the trust is not comparable to an Austrian private foundation from a corporate perspective;
  • the trust (even if comparable) does not properly disclose all of the information required by the Foundation Entrance Tax Act, among which its foundation documents, to the Austrian tax office in charge until maturity of the duty; or
  • no convention on the mutual information exchange and the mutual collection of taxes is applicable with the residence state of the trust.

Foundations and charities

Are foundations and charities legally recognised in your jurisdiction? If so, what forms can they take?

A private foundation is recognised in Austria as Privatstiftung. It is a legal entity whose internal organisation and purpose are largely determined by the founder. The private foundation’s structure largely resembles that of a limited company, but with beneficiaries instead of proprietors.

Austrian law also recognises another form of foundation, which is exclusively for charitable purposes. The regulations for this type of foundation essentially follow those applying to private foundations.

What rules and procedures govern the establishment and maintenance of foundations and charities?

A private foundation is founded by way of a declaration of establishment that is subject to certain rules and procedures. The private foundation comes into legal existence once registered in the Commercial Register. In the declaration of establishment, the founder declares that he or she wants to withdraw specific assets from his or her own assets, transfer those assets to a private foundation as a legally independent entity and earmark them for a special purpose.

The declaration of establishment can define the purpose of the private foundation by either general or precise terms. By means of a precise definition of the purpose of the private foundation, the founder can determine the fortunes of the private foundation for a long time after his or her death. Apart from the limitations arising from the purpose of the private foundation, the Austrian Private Foundation Act expressly and exhaustively restricts the activities of a private foundation. The founder must endow the private foundation with assets of at least €70,000 when he or she establishes the private foundation. In addition to cash, contributions to a private foundation may take the form of:

  • securities;
  • equity interests;
  • real estate; and
  • art collections.

Additional assets may be contributed to the private foundation after it has been established.

How are foundations and charities taxed?

Austrian private foundations are treated as corporations under the Corporate Income Tax Act. They are subject to the ordinary corporate income tax rate of 25% on their worldwide income.

A withholding tax of 27.5% is also imposed on distributions made to private foundations’ beneficiaries, although this will be (fully or partly) relieved if double taxation conventions exist with the countries in which the beneficiaries are residents.

Austrian private foundations that have disclosed their beneficial ownership information, as well as founding documentation, to the tax office in charge benefit from a special tax regime for their non-business income. This regime consists of interim taxation for investment income and income derived from alienation of real estate as defined in a catalogue of the Corporate Income Tax Act (ie, interest income, capital gains from securities and from real estate).

As with the general corporate income tax, interim tax amounts to 25%. To avoid dual taxation of income distributed by the private foundation, the tax base for interim tax is effectively reduced by the distributions that the private foundation makes to its beneficiaries. Further, a roll-over relief for capital gains realised from substantial participations is available if other substantial participations are acquired by the private foundation within 12 months. Other income (eg, rental income) is subject to the ordinary corporate income tax.

In principle, foreign foundations and charities that are comparable to an Austrian corporation and fulfil the discretionary trust criteria (see above “How are trusts taxed in your jurisdiction?”) are also taxed like corporations and are subject to corporate income tax with their income allocated to Austria (in accordance with the relevant double taxation convention) as the state of source. Distributions of foreign foundations and charities to Austrian resident settlers or beneficiaries are subject to Austrian income tax at the level of the Austrian resident settlers or beneficiaries. In case of a distribution by a foreign foundation or charity that is comparable to an Austrian private foundation, the special tax rate of 27.5% applies to the distribution at the level of the Austrian resident settlers or beneficiaries. In case the foreign foundation or charity is not comparable to an Austrian corporation or does not fulfil the discretionary trust criteria, its assets and income are directly allocated to its settlers or the beneficiaries.

Foundation entrance duty is imposed on contributions made to the foundations or charities if either the foundation or the donator is resident in Austria for tax purposes.

There are corporate income tax exemptions for donations to charitable foundations.

Compliance issues

Anti-avoidance and anti-abuse provisions

What anti-avoidance and anti-abuse tax provisions apply in the context of private client wealth management?

Austrian tax law follows the substance-over-form approach, meaning that circumstances are classified according to their economic substance rather than their legal form. According to a general anti-abuse and anti-avoidance tax provision in Austrian tax law, tax liability cannot be avoided or diminished by misuse of legal forms. Under this approach, the income is allocated to the beneficial owner, even if in certain cases the person in question is not the legal owner.

Based on the Organisation for Economic Cooperation and Development Base Erosion and Profit Shifting (BEPS) project, the European Union issued two directives that address anti-avoidance and anti-abuse tax issues. The measures deal with multinational group structures, but may also affect the private sector. The action plan suggests (in the form of best practice) implementing mandatory disclosure rules, which could lead to further provisions concerning private clients if implemented by the member states.

Anti-money laundering provisions

What anti-money laundering provisions apply in the context of private client wealth management (eg, beneficial ownership registers)?

The implementation of the EU Fourth Money Laundering Directive (2015/849/EC) in 2017 required the introduction of new provisions in Austria law. Regulated entities (eg, credit institutions, financial institutions, auditors, external accountants, tax advisers and legal professionals in cases of buying or selling property or business entities, managing client money, securities and other assets and organising contributions of companies) must apply due diligence measures under particular circumstances.

When establishing a business relationship with a client (set up for a specific duration) and when carrying out a transaction that amounts to €15,000 or more, the due diligence measures (provisions) should consist of:

  • identifying the customer and verifying his or her identity on the basis of documents, data or information obtained from a reliable and independent source;
  • identifying the beneficial owner;
  • obtaining information regarding the purpose and the intended nature of the business relationship; and
  • monitoring the business relationship (including knowledge with respect to the customer, the business and risk profile) on an ongoing basis.

Fiduciary relationships must be monitored at all times, even without a suspicion of money laundering or terrorist financing.

Beneficial owners of companies are natural persons that have ownership (ie, more than 25% of the shares or voting rights) or control over the company. For entities that manage funds or distribute funds (eg, foundations and trusts), the beneficial owners are the settlor, the trustee and the beneficiaries.

Enhanced customer due diligence applies to politically exposed persons and in case of complex and unusually large transactions.

Further, beneficial owners as defined in the Law on the Register of Beneficial Owners must be registered in a separate non-publicly available register until June 2018.

Wills and probate

Succession rules

What rules and restrictions (if any) govern the disposition of and succession to an individual’s property and assets in your jurisdiction?

For the disposition of his or her assets, an individual may elect between wills and inheritance contracts. However, Austrian law is relatively strict when it comes to inheritance contracts. Such contracts are permitted only between married or engaged couples. The subject of the contract is limited to three-quarters of the testators’ assets.

Austrian law also provides various types of will substitute that allow the testator to transfer property upon his or her death to a beneficiary outside the probate process, including:

  • donation agreements conditioned on the grantor's death;
  • private foundations under the Austrian Private Foundation Act; or
  • life insurance contracts.

However, the legal entitlement of close relatives to a compulsory share applies in any case.

Austrian law provides for subsequent succession, that is (broadly speaking) limited to the next generation following the testator. A similar rule applies to private foundations. If the sole or the prevailing purpose of a private foundation is to provide maintenance to individuals, the duration of the foundation is limited to 100 years.

Intestacy

What rules and procedures govern intestacy?

Intestate succession procedure applies if the testator has not left a will or the will does not comprise all of the testator’s assets. Relatives inherit in a certain order:

  • the first category of heirs includes children and grandchildren of the earlier deceased children;
  • the second category includes parents and their descendants; and
  • the third category includes grandparents and their descendants.

The spouse or the same-sex registered civil partner is also an intestate heir. However, Austrian law does not grant a statutory right of intestate succession to the surviving partner of a non-registered partnership. Only in case that neither testamentary heirs nor legal heirs inherit, the non-registered partner is entitled to the assets. In the absence of a will, the following principles apply:

  • If the spouse or registered partner inherits together with children, then he or she is entitled to one-third of the succession and the rest (two-thirds) is distributed equally among the children.
  • If the spouse inherits together with the parents, the spouse is entitled to two-thirds of the succession.
  • If the deceased leaves a spouse and no other heirs or only heirs from the third category, the spouse becomes sole heir.

Governing law

What rules and restrictions (if any) apply to the governing law of a will?

See the questions below.

Formalities

What are the formal and procedural requirements to make a will? Are wills and other estate documents publicly available?

The following forms of wills exist under Austrian law:

  • holographic wills – the entire text is written and signed by hand;
  • non-holographic  wills – the will is executed in the presence of three witnesses and signed by hand; and
  • public wills – the will is executed by a notary or a court.

Generally, wills and other estate documents are not publicly available. However, the will may be registered in the Austrian Central Registry of Wills (or recorded in the Register of Austrian Attorneys). Data of the testator and the location of the will is available, but not the will itself.

Validity and amendment

How is the validity of a will established in your jurisdiction?

Every person who has reached the age of 18 and is of sound mind, memory and understanding is entitled to draw his or her last will. Further, the testator must be aware of the fact that this is his or her last will (animus testandi) when drawing the document.

Generally, there are three ways to create a last will:

  • the testator can declare his or her will orally or in writing before a notary public or the competent district court (public will);
  • the testator can write down his or her will in his or her own handwriting and sign the will (holographic will); or
  • a testament that is not in the testator’s handwriting (eg, typed by a third person) is equally valid if the testator signs the will in the presence of three witnesses and adds the phrase “this is my last will” in his or her own handwriting (non-holographic will). The witnesses must also confirm that this is the testator’s last will and add their signatures with a supplement that indicates their capacity as witnesses.

Oral wills were also valid until December 31 2004. Such private oral wills may still be valid if there is a credible danger that the testator might die or become unable to express his or her last will before he or she can make a will in one of the ways mentioned above. In such case, the testator may establish his or her last will orally or in writing in the presence of two witnesses. The will expires three months after the danger that prompted it has disappeared.

To what extent are foreign wills recognised? Do any special rules and procedures apply to establishing their validity in your jurisdiction?

Austria is a party to the Hague Form of Wills Convention. Generally, under the convention a foreign will is formally valid in Austria if the will’s form complies with the law:

  • of the place where the testator declared it;
  • of a nationality possessed by the testator or his or her habitual residence either at the time when he or she made the disposition or at the time of his or her death; or
  • of the place where they are situated where immovables are concerned.

The convention does not apply on a succession agreement. Therefore, for the validity of a succession agreement, a testator must consider Article 27 of EU Succession Regulation (650/2012), which supplements the Hague Form of Wills Convention. No further special rules and procedures apply for establishing its validity in Austria.

How can the validity of a will be challenged? Can the will be amended after the decedent’s death?

The will of a testator can be challenged if the testator had erred over a substantial fact when declaring his or her last will. Such a substantial error occurs – for example, if the testator had erred about the testamentary beneficiary or the testamentary benefited assets. Further, the validity of a will can be challenged if the testator was not of sound mind when declaring his or her last will. The will of a testator cannot be amended after his or her death; however, a will must always be interpreted according to the testator’s vision.

Estate administration

What rules and procedures govern:

(a) The appointment of estate administrators?

Under Austrian law, the competent notary is appointed by law as estate administrator. There is no requirement for a court to appoint the estate administrator. However, once inheritance proceedings are pending at the competent district court, the administrator acts on behalf of the court to conduct the research and determine the relevant facts that are necessary for the court.

(b) Consolidation and administration of the estate?

The estate administrator must carry out a registration of death. A requirement for a complete registration of death is the consolidation of the estate. Further, during the proceedings, the estate administrator is authorised to administrate and represent the estate as a representative of the court. However, prospective heirs who are sufficiently able to prove their rights of succession are entitled to use, administer and represent the estate together.

(c) Distribution of the estate to heirs?

Under Austrian law prospective heirs are not authorised to acquire the estate of the deceased person immediately after that person’s death. Instead, the prospective heirs must prove their titles and declare whether they want to accept the inheritance. If prospective heirs make an unconditional declaration of inheritance, they are unlimitedly liable for the deceased’s liabilities. If the heirs declare a conditional declaration of inheritance, they are limitedly liable for the testator’s liabilities, restricted by the value of the estate. After the prospective heirs have made their declaration of acceptance of the inheritance, the competent court may decide on the transfer of the estate by the grant of probate. This document entitles the heir to take possession of the estate. Before this decision, the estate is considered to be in suspension.

(d) Settlement of the decedent’s debts and payment of any taxes and fees?

The heirs are liable for the debts of the deceased. However, if a prospective heir declares a conditional declaration of acceptance of the inheritance (inventory of the assets), he or she is liable only up to the value of the inheritance. Under current Austrian law, no inheritance tax exists. However, if the heir inherits real estate, transfer tax is due. The cost of a judicial commissioner who administrates the inheritance case depends on the value of the estate, which serves as the basis when calculating the fees. In addition, a court fee that amounts to 0.5% is due. It is calculated by using the value of the estate as the tax basis.

Planning considerations

Are there any special considerations specific to your jurisdiction that individuals should bear in mind during succession planning?

Testators should bear in mind that under Austrian law the children of the testator, as well as his or her registered partner or spouse, are entitled to a compulsory share of the estate that amounts to half of the intestate portion.

Moreover, a testator should bear in mind that under Section 14 of the Condominium Act the co-owner of a condominium is privileged to acquire the other half (owned by the testator) after the testator’s death. Further, spouses, partners and other close relatives are entitled to enter into a rental contract instead of the testator if they have an urgent need for accommodation and have lived together with the testator before the testator’s death (Section 14 of the Tenancy Act).

Since the Succession Regulation entered into force, testators may elect between:

  • the law of his or her habitual residence at the time of death; or
  • the law of the state whose nationality the testator possessed at the time of making the choice of law or at the time of the testator’s death.

Capacity and power of attorney

Loss of capacity

What rules, restrictions and procedures govern the management of an individual’s affairs where he or she loses capacity and the grant of power of attorney in such cases?

A person can grant a power of attorney, which becomes effective in the event of the loss of capacity. In the absence of such a power, a trustee will be appointed by the court. However, the duties of the trustee can be limited to certain responsibilities.

Minors

What rules, restrictions and procedures govern the holding and management of a minor’s assets until the minor reaches the age of capacity?

As legal representatives, parents are responsible for holding and managing a minor’s assets and have to act in accordance with the diligence of prudent parents. The legal representatives must, to the extent possible, secure and increase the assets entrusted to their care and fulfil accountability requirements. For material and high-risk wealth-related matters (eg, acquisition of shares in a company, sale and encumbrance of real property or (co)founding a private foundation), a minor must be jointly represented by both parents. Further, the approval of the guardianship court is necessary.

Family links

Marriage and civil partnerships

What matrimonial property regimes are recognised in your jurisdiction?

The general rule for matrimonial property is the ‘separation of property’, whereby each spouse remains the owner of the assets that he or she has brought into the marriage and becomes sole owner of assets acquired during the marriage. However, a married couple can agree to another matrimonial property regime. Thus, the spouses may stipulate:

  • the community of property during their lifetime;
  • the community of property on death; or
  • the community of surplus.

Are same-sex marriages and/or civil partnerships recognised in your jurisdiction?

Under current Austrian law, same-sex couples have no right to marry. However, following a Constitutional Court decision on December 4 2017, same-sex couples will have the right to marry from January 1 2019. Notwithstanding the above, the legislator can repeal or amend laws currently in effect.

Since January 1 2010 the Registered Partnership Act is in force. Under this act, same-sex couples are entitled to register their relationship. According to the abovementioned Constitutional Court decision, heterosexual couples are also authorised to enter into a partnership under the Registered Partnership Act after December 31 2017.

Children

Is there a legal distinction between legitimate and illegitimate children in terms of estate and succession planning?

There is no legal distinction between legitimate and illegitimate children in terms of estate and succession planning.

Is there a legal distinction between natural and adopted children in terms of estate and succession planning?

A testator should keep in mind that in contrast to natural children, adopted children are no heirs by law to the other family members of the adopting person (eg, grandparents).