Determining beneficiaries of a private foundation: resolutions and records

If the applicable foundation deed names a person directly, beneficiary status does not arise only through a later board resolution. The file should nevertheless show which version applies and whether the named person meets any stated conditions.

If the deed instead describes a class, for example by family relationship, age, education or a defined purpose, the individual classification may require a determination under the existing criteria. The determining body may not create a new beneficiary scheme.

If the proposed step would change the class or the criteria rather than classify a person, it is not a mere determination. The applicable amendment route must then be reviewed, including any effectively reserved amendment right and, where relevant, section 33 PSG.

Section 5 PSG links the determination to the body appointed for that purpose. The foundation deed may assign the task to an individual, an advisory board or another body. If no such provision exists, the statutory task falls to the foundation board.

A family arrangement, a recommendation by one member or a vote among possible beneficiaries does not replace the competent determining body. The file should therefore address the appointing provision, quorum, participation and any conflict of interest before the substantive review begins.

If a member of the determining body is affected, a mere abstention must not conceal the unresolved authority question. The governance documents should be checked for a replacement rule, special majority or other approval requirement.

A reliable resolution identifies the foundation deed version and the provision that defines the class and criteria. The relevant facts of the person concerned should then be matched to those criteria. General references to family proximity or an earlier resolution are not enough.

The result should state clearly whether the person is determined as a beneficiary under the reviewed scheme, for which class or period the determination applies and whether conditions or further evidence remain open. A later distribution decision must not be read into this determination.

The signed decision, the supporting documents and the notice to the person concerned belong together. After the determination, the electronic notification required by section 5 PSG to the competent tax authority must also be arranged. Internal registers and later distribution files should show the same status.

Beneficiary status first answers who falls within the beneficiary scheme. Whether a particular payment is owed, may be resolved in the board's discretion or depends on additional conditions must be determined from the foundation deed and the specific distribution process.

The fact that no distribution is made does not automatically remove beneficiary status. Conversely, a requested payment cannot be released merely by referring to a determination resolution. Purpose, authority, financial position and the specific basis for the benefit belong in a separate resolution.

A later information request under section 30 PSG may concern different files. The determination file should therefore show which deed provisions and facts supported the status decision without anticipating the review of a distribution.