Austrian OGH Ruling on Adding and Deducting Gifts

Jan 31, 2025 Benn-Ibler Rechtsanwälte

In order to facilitate the provision of evidence, the Austrian Supreme Court (Oberster Gerichtshof, hereinafter OGH) ruled in favour of compulsory heirs.

In the case at hand, in 1997, the decedent, who eventually died in 2020, and his wife transferred a winery, predominantly owned in the decedent’s name but partly owned by his wife, to one of their children (the defendant). However, a number of obligations came attached with the transfer, such as the taking-over of debts, granting tenancy rights, regular maintenance payments, and annually supplying wine. The market value of the company on the date of the transfer was EUR 573.810, while the value of the consideration was estimated to be approximately EUR 230.000.

The other two children (the plaintiffs) sought payment of approximately EUR 120,000 each from the defendant as the recipient of the gift. The mixed gift made to the defendant was to be added to the estate of the deceased. The defendant denied that this was the case and claimed that no intention to make a gift could be deduced from the deed of transfer.

The court of first instance dismissed the action on the grounds that the intention to make a gift as required by Section 781(1) of the Austrian Civil Code (Allgemeines bürgerliches Gesetzbuch, hereinafter ABGB) could not be established. The court of appeal confirmed this decision. The plaintiffs claiming the compulsory portion needed to prove the decedent’s intention to make a gift.

The OGH granted the plaintiffs’ extraordinary appeal, clarifying that a deduction of gratuitous benefits under Section 781 of the ABGB is only possible if the subjective element of the intention to donate is present. The catch-all provision of Section 781(2)(6) of the ABGB therefore does not apply to cases that are already covered by (1), where the deduction fails due to a lack of intention to donate.

In the event of a manifest imbalance between performance and consideration, the beneficiary of the compulsory portion, who is worthy of protection in this respect, must be granted prima facie evidence from which it can be concluded that there was an intention to make a gift (which must be proven).

The OGH overturned the decisions of the lower courts because they had not taken into account the relaxation of the burden of proof.

OGH 2 Ob 248/23v (19 November 2024)