What options are there to inherit companies in a tax-optimized way?
January 7, 2022 | 50,00 EUR | answered by Otto Dornbusch
Dear Tax Advisor,
My name is Anna Klinger and I am faced with the challenge of optimally passing on my company to the next generation. I am the sole owner of a medium-sized business that I would like to pass on to my children. However, I have concerns regarding the inheritance tax that could be incurred in a business succession.
The current situation is as follows: My company has a significant enterprise value that needs to be taken into account in the inheritance process. I want to ensure that my children can take over the business without a significant financial burden, and at the same time, I want to minimize the tax burden as much as possible.
My concerns are varied: How can I ensure that my children inherit the business in a tax-efficient manner? What options are available to minimize the inheritance tax? Are there any tax planning opportunities that I should consider?
Therefore, my question to you is: What options are available to pass on a business in a tax-efficient manner? What tax aspects should I consider in succession planning? Are there any specific regulations or measures that I can take to reduce the tax burden?
I look forward to your expertise and thank you in advance for your support.
Sincerely,
Anna Klinger
Dear Mrs. Klinger,
Thank you for your inquiry regarding the tax-optimized inheritance of your medium-sized business. It is understandable that you are concerned about inheritance tax and want to ensure that your children can take over the business with as little financial burden as possible. I am happy to provide you with an overview of possible measures and tax planning options that you should consider in your succession planning.
First and foremost, it is important to know that the value of a business is taken into account for calculating inheritance tax. Depending on the value of the business and the relationship to the heirs, different tax-free allowances may apply. However, there are ways to minimize the tax burden.
One option is timely planning and structuring of business succession. You should work with a tax advisor early on to develop tax-optimized solutions. One option, for example, is to use tax-free allowances and pension arrangements to reduce the tax burden. Converting the business into a family foundation or other legal forms can also bring tax benefits.
Furthermore, you can take advantage of tax benefits by transferring company shares during your lifetime. You can gradually transfer shares to your children and benefit from tax-free allowances. Incorporating lifetime gifts can also be an option to minimize the tax burden.
Additionally, you should also check if there are any special tax benefits or regulations applicable to your business. Under certain conditions, for example, business assets or favored company shares may be exempt from inheritance tax.
Overall, it is important to develop an individual and tailored solution for the tax-optimized inheritance of your business. I am available for personal consultation to analyze your specific situation and provide you with customized solutions.
I hope that this information has been helpful to you and I am available to answer any further questions you may have.
Best regards,
Otto Dornbusch
