An inheritance or gift and your business: private or business?
Written by Ilias Aarrass6 min read · Published on · Last reviewed on 
In short
An inheritance or a gift within the family is private: you record it as a private deposit and it is neither profit nor turnover, while a gift you receive because you are an entrepreneur does belong in your profit.
- Money you inherit and deposit in your business account remains a private deposit; it does not change your profit.
- Inherited assets you use for business are contributed at market value, and you may depreciate that value.
- There is no investment relief on an inheritance or gift, because you take on no obligations.
- A gift from a client or supplier is business and sometimes VAT-relevant, so record the reason for every large gift in writing.
You inherit money from a relative, your parents help you start with a lump sum, or a family member leaves you their tools. The question immediately arises: do I owe tax on this in my business, and how do I record it? The good news is that an inheritance or gift is private in almost all cases and therefore does not create profit. But there are exceptions to watch out for, and there are rules for the value at which inherited assets enter your books. This article sets out the main rule, the exceptions and the entries.
The main rule: the source decides everything
Profit from a business arises from your work: you supply something and receive a fee for it. An inheritance or a gift within the family has nothing to do with your work, so it is neither turnover nor profit. You may owe inheritance or gift tax on it, and that runs entirely outside your business. VAT also stays out of the picture: there is no supply, so there is nothing to invoice.
If you then deposit that money into your business account, that does not change its taxability. You record it as a private deposit: your equity in the business rises, your profit does not. If you leave it in your private account, it forms part of your box 3 assets on 1 January of the following year.
| Situation | Effect on your profit |
|---|---|
| Inheritance in cash, deposited in your business account | private deposit, no profit |
| A gift from your parents to help you start | private deposit, no profit; possibly gift tax privately |
| Tools or a car you inherit and use for business | contribute at market value, then depreciate |
| A client who gives you something after an assignment | business, so turnover or profit |
| A business you inherit and continue | you take over the balance sheet; settlement happens with the deceased or is rolled over |
The exception: a gift with a business background
If the gift is made because you are an entrepreneur, the picture changes. A client who hands you an amount after a job, a supplier who gives you goods to keep the relationship sweet, or a fund that gives you money for your business activity: that is not a family gift but a business receipt. The amount then belongs in your profit, and sometimes even in your VAT return if there is a supply in return. Subsidies have their own set of rules, see receiving a subsidy.
There are plenty of borderline cases. An uncle who is also a client and gives you a substantial sum sits right on the line. The question the tax authorities ask is whether a stranger in the same circumstances would have received the same. If the answer is no, and the family tie is the main reason, it is private. Do record it though: a short gift statement with the reason and the date prevents a discussion years later.
Putting inherited assets on your balance sheet
If you inherit assets you will use for business, you contribute them at market value at the moment of contribution. That value is your depreciation base: you may depreciate it even though you paid nothing yourself. This works exactly as with contributing private assets to your business. Support the value with comparable adverts or a valuation and keep that evidence with your records.
There is no VAT to reclaim, because there is no invoice showing VAT. Does investment relief apply to the value? No: the small-scale investment relief applies to investments for which you take on obligations, and with an inheritance or gift you pay nothing. Depreciation is allowed, so the cost does find its way into your profit.
Using an inherited van for business
- Inheritance
- a van, market value € 8,000 based on comparable adverts
- Contribution
- € 8,000 on the balance sheet, offset as a private deposit
- Depreciation
- residual value € 2,000, five years, so € 1,200 a year
- VAT
- no deduction, there is no invoice showing VAT
Result: You paid nothing and still have € 1,200 a year of deduction, plus fuel and maintenance. If you later sell the van above its book value, that difference is profit.
Inheriting or being given an entire business
Receiving a going concern is a different story from loose assets. For inheritance and gift tax there is a scheme for business assets that exempts a large part of the value, provided you continue the business for a number of years. For income tax the settlement over cessation profit can, under conditions, be rolled over to you, so you continue with the old book values.
Both schemes have strict conditions and deadlines, and the choice affects your own returns for years. So always have such a transfer worked out before anything is signed or paid out. If it concerns a family transfer during life, read transferring your business to your child and taking over a business.
If you inherit a business you do not continue, settlement takes place with the deceased and you receive what remains after tax. That amount is private and does not belong in your own business, even if you work in the same sector.
Frequently asked questions
Do I owe tax if I put an inheritance into my business?
No, not in your business. It is a private deposit and therefore not profit. Inheritance tax may be due on the inheritance itself, but that runs through your private return and not through your bookkeeping.
Can I depreciate inherited tools?
Yes. You contribute it at market value and depreciate that under the ordinary rules. Keep the evidence for that value. There is no VAT to reclaim.
My client gave me something, is that private too?
Almost never. A gift from someone with whom you have a business relationship is connected to your work and therefore belongs in your profit. If there is a supply in return, VAT comes into play as well.
Is there an exemption if my parents fund my start-up?
For gift tax there are annual exemptions for gifts from parents to children; these are around € 6,000 a year and are adjusted annually. Check the current amount with the tax authorities. For your business it makes no difference: it remains a private deposit.
Sources
- Inheritance tax ratesBelastingdienst · belastingdienst.nl
- How to calculate your depreciationBelastingdienst · belastingdienst.nl
Sources checked on
This article provides general information based on the rules known for 2026 and does not replace personal tax advice. For your specific situation, we're happy to take a look with you.
