Compulsory Shares: Returned Gifts not Deductible

Aug 29, 2025 Benn-Ibler Rechtsanwälte

Pursuant to Section 782 of the Austrian General Civil Code (Allgemeines bürgerliches Gesetzbuch, hereinafter ABGB), beneficiaries entitled to a compulsory inheritance portion are, as a rule, regarded as though the gifted property remained within the estate. However, if property previously transferred gratuitously is subsequently returned to the estate by mutual agreement—so that it is now wholly unencumbered and part of the estate—the Austrian Supreme Court (Oberster Gerichtshof, hereinafter OGH) has held that such a gift cannot be included or considered for calculation purposes.

The dispute at hand involved the children of the decedent. Several years prior, the decedent had relinquished his right to inherit and his compulsory share from his late wife, transferring those rights to his son (the plaintiff), who thereby became the sole owner of multiple properties. This arrangement was intended to provide for the decedent’s financial security and to ensure the continued operation of the family farm by the plaintiff. Nonetheless, as family relations became strained, the plaintiff voluntarily returned his property interests to his father without compensation well before the latter’s passing.

Compulsory share claim against deceased’s daughter

Subsequently, in 2010, the father transferred ownership of the properties to his daughter (the defendant) pursuant to a transfer agreement, recognising her role as his caregiver until his passing.

In his will, the testator designated the defendant as the sole heir, while restricting his other children to their statutory share and further disinheriting them on the grounds of gross neglect.

The plaintiff claimed around EUR 190,000 in compulsory portion, arguing that the defendant’s real estate gift should be included in the estate. The defendant countered, stating that the testator’s waiver of the compulsory portion for the plaintiff should count as an ‘advance payment’ to the estate.

OGH: No addition when gifts were mutually agreed upon to be returned

The OGH has held that the principle of addition does not apply when a gift is mutually revoked during the testator’s lifetime and is returned to the testator without consideration.

This would result in the same assets being counted more than once: the real estate would be added to the estate both because of the gift to the defendant and the inheritance waiver in favor of the plaintiff.

As a result, the property shares would be counted twice when calculating compulsory portions, reducing the plaintiff’s share while benefiting the other beneficiaries through a higher assessment basis.

This would blatantly contradict the compensatory nature of the right to a compulsory portion.  

OGH 2 Ob 51/25a (26 June 2025)