Is it advisable to manage my capital assets through foundations?
September 14, 2023 | 40,00 EUR | answered by Paula Köhler
Dear tax consultant,
my name is Helma Falk and I am currently considering how best to manage my capital assets. Currently, I have investments in stocks, funds, and real estate, and I am unsure whether it would be beneficial to manage my capital assets through foundations.
I am concerned about how to preserve my wealth in the long term and at the same time optimize it from a tax perspective. I have heard that foundations could be a way to take advantage of tax benefits and support charitable purposes. However, I am unsure if a foundation would be the right decision for me and what advantages and disadvantages are associated with it.
Could you please provide me with more information on how foundations work, what tax benefits they offer, and whether it would be beneficial for me as an individual to manage my capital assets through foundations? Are there alternative ways to manage my capital assets that I should consider?
I look forward to your expertise and thank you in advance for your help.
Best regards,
Helma Falk
Dear Mrs. Falk,
Thank you for your question regarding the management of your capital assets and the potential use of foundations. It is important that you consider how to preserve your wealth in the long term and optimize it tax-wise. Foundations can indeed be an interesting way to pursue these goals.
Foundations are legally independent assets established through a foundation deed. They typically serve charitable, benevolent, or religious purposes. However, a foundation can also be established for private purposes. As a founder, you would contribute the assets and as a board member, you would oversee the management or appoint a manager.
A major advantage of foundations is that they are tax-favored. The foundation's assets are not subject to income tax, capital gains tax, or trade tax. In addition, gift and inheritance taxes can be avoided through a foundation. Furthermore, donations to charitable foundations may be tax-deductible.
However, there are also some disadvantages associated with founding a foundation. For example, you would need to contribute a certain foundation capital to establish the foundation. Additionally, as a founder, you are obligated to ensure proper management of the foundation and fulfill the statutory purposes.
It is important that you carefully consider whether founding a foundation is the right decision for you. There are also alternative ways to manage your capital assets, such as using trust assets, asset management companies, or family offices. These options may be more appropriate depending on your individual needs and goals.
I recommend that you consult with a specialist in foundation law or a specialized tax advisor to discuss your options in detail and make an informed decision. I am also available to answer any further questions you may have.
I hope this information helps you in your decision-making process. Please feel free to reach out if you have any further questions.
Sincerely,
Paula Köhler
