Transfer of private company shares to own investment company
February 6, 2017 | 50,00 EUR | answered by Wirtschaftsprüfer André Hintz
Dear Sir or Madam,
I am involved in two companies. I hold a 20% stake in a start-up that I co-founded in 2014 through a holding company that I own 100% of. I also own 55% of a second, longer-established company privately.
I would like to sell my privately held stake in the second company to my private holding company. The reason for this is that the second company is profitable and we are about to start distributing dividends. However, I do not want to use these dividends for personal use, but rather for further investments through my holding company.
As this is all happening within a relatively modest financial scope, I have not yet consulted with a specialized tax advisor.
My question is: would this be "principally" tax-neutral? (I intend to immediately invest the proceeds from the private sale into the holding company, enabling it to finance the purchase. Therefore, there will be no personal gain.)
Thank you for your answers!
Dear questioner,
I would like to answer your question within the scope of an initial consultation and based on your fee commitment, in accordance with the rules of the online portal. My response is based on the facts you have presented.
First of all, I would like to point out that you have not provided any information regarding the legal forms of the companies in the facts you have presented.
A sale of company shares held in private assets with a participation rate of 55% will result in taxation of the capital gains (sales price minus acquisition costs) according to § 16 or 17 of the Income Tax Act.
Reinvesting the capital gains in the participating company does not result in tax-neutral treatment.
In principle, a transfer of shares from one company to another could be tax-neutral under the Transformation Act or Transformation Tax Act. For example, it would be possible to transfer the old participation (55%) to the participating company.
This would require a detailed consultation, in which more detailed knowledge is necessary in order to explain and consider all tax pitfalls.
I hope my explanations have been helpful to you and remain
Yours sincerely,
André Hintz
Tax consultant
Auditor
