The spin transition in LaCoO3 has been investigated using density-functional theory in combination with dynamical mean-field theory employing continuous time quantum Monte Carlo and exact diagonalization impurity solvers. Calculations on the experimental rhombohedral atomic structure with two Co sites per unit cell show that an independent treatment of the Co atoms results in a ground state with strong charge fluctuations induced by electronic correlations. Each atom shows a contribution from either a d5 or a d7 state in addition to the main d6 state. These states play a relevant role in the spin transition which can be understood as a low spin-high spin (LS-HS) transition with significant contributions (~10%) to the LS and HS states of d5 and d7 states, respectively. We report spectra as well as optical conductivity data for all cases. A thermodynamic analysis reveals a significant kinetic energy gain through introduction of charge fluctuations, which in addition to the potential energy reduction lowers the total energy of the system.