What tax implications does the dissolution of capital investments have?
March 9, 2024 | 40,00 EUR | answered by Christiane Rapp
Dear tax consultant,
My name is Edith Eiserfelder and I am currently dealing with the liquidation of my capital investments. Over the past few years, I have acquired various securities and funds and am now considering selling some of them to restructure my portfolio. However, I am uncertain about the potential tax implications of liquidating my capital investments and what taxes I may need to pay.
Currently, I receive capital income from dividends and capital gains in addition to my regular income from employment. I have never liquidated capital investments before and therefore I am unsure about the tax implications. I do not want to face unpleasant surprises and would like to know in advance what taxes I may be facing so that I can plan accordingly.
My concerns mainly revolve around potentially having to pay high taxes on the profits earned and thereby losing a significant portion of my capital. I would like to find the best possible solution to liquidate my capital investments without having to bear excessive tax burdens.
Therefore, my question to you is: What are the tax implications of liquidating capital investments and how can I best prepare to act in a tax-efficient manner? Are there specific tax planning options that I should consider to minimize my tax burden? I would greatly appreciate your professional assessment and advice on this matter.
Thank you in advance for your assistance.
Sincerely,
Edith Eiserfelder
Dear Mrs. Eiserfelder,
Thank you for your inquiry regarding the tax implications of liquidating your capital investments. It is understandable that you are concerned about how this step could affect you tax-wise and what taxes you may have to pay. I will be happy to explain in detail what aspects need to be considered in this regard.
In general, capital gains resulting from the liquidation of securities and funds are subject to a flat tax rate of 25%. This applies to both dividends and capital gains. If you sell your capital investments and generate profits, you will have to pay this flat tax on the profits earned. It is important to note that the bank or financial institution through which you hold your capital investments will withhold this tax and remit it to the tax office.
Furthermore, you should also consider that any losses from the sale of capital investments can be claimed for tax purposes. Losses can be offset against gains from other capital investments, thereby reducing your tax burden. Therefore, it is advisable to create a detailed overview of your gains and losses before selling your capital investments to allow for optimal tax planning.
To further optimize your tax burden, you may also consider selling capital investments with a long holding period. Gains from capital investments held for more than one year are subject to a reduced tax rate under the so-called speculation period. However, it is important to carefully evaluate whether this approach is beneficial for you.
In summary, the liquidation of capital investments has tax implications in the form of the flat tax rate. Through careful planning and consideration of possible loss offsetting and the holding period of the capital investments, you can optimize your tax burden. I recommend that you consult with a tax advisor to discuss your individual situation and find the best possible solution.
I hope that this information has been helpful to you and I am available to answer any further questions you may have.
Sincerely,
Christiane Rapp
