Sale of the business (medium-sized company).
August 5, 2011 | 30,00 EUR | answered by Oliver Burchardt
Dear Sir or Madam,
I am now 53 years old (born in January 1958) and I am considering selling my business. Either next year or when I turn 55 years old. I would like to invest the proceeds from the sale in real estate. How should I structure this so that the capital gains are not subject to high taxation (through appropriate expenses in the year of sale)? What advantage would waiting until the age of 55 bring in this regard?
Thank you.
Dear inquirer,
Thank you for your inquiry, which I am happy to answer as part of an initial consultation.
For the year of business cessation, you must distinguish between the ongoing profit and the profit from the business cessation. Both profits are determined separately, so that you cannot influence the capital gains by shifting business expenses.
It is also questionable whether it is advisable to keep the capital gains low. Capital gains are considered extraordinary income within the meaning of § 34 EStG. This means that the so-called fifth rule applies to such gains, which usually leads to a tax relief. From a tax perspective, I can only advise you to keep the capital gains as high as possible and the ongoing profit in the year of cessation as low as possible, so that the reduced tax rate can be applied to as much of the income as possible.
Upon reaching the age of 55, you can apply for a one-time allowance of €45,000 on the capital gains. However, this allowance is reduced by the amount by which the capital gains exceed €136,000. Therefore, if you expect the capital gains to exceed €181,000, waiting from a tax perspective is no longer advisable.
Kind regards,
Oliver Burchardt
Tax advisor
