{"id":19351,"date":"2006-08-03T19:14:05","date_gmt":"2006-08-03T17:14:05","guid":{"rendered":"https:\/\/fiala.de\/reducing-the-tax-burden-family-co\/"},"modified":"2021-02-16T11:56:47","modified_gmt":"2021-02-16T10:56:47","slug":"reducing-the-tax-burden-family-co","status":"publish","type":"post","link":"https:\/\/www.fiala.de\/en\/reducing-the-tax-burden-family-co\/","title":{"rendered":"Reducing the tax burden Family & Co."},"content":{"rendered":"

by RA Johannes FialaFor income tax, church tax and the solidarity surcharge, children and other dependents are treated as independent taxpayers. In the case of an intact family, a great deal of tax can therefore be saved by structuring measures within a family.the starting point for the following considerations is the fact that for every taxpayer in 2002, the first 7,500 – 12,500 ? remain tax-exempt, and that the parts of the income in excess of this are initially only taxed at less than 30%. In the case of a student who receives only income from capital assets, for example, the first 10,000 ? of this income is retained in 2002. income tax-free, as the following calculation shows:<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Basic tax allowance (\u00a7 32a Abs.1 EStG<\/a>)<\/font><\/span><\/td>\n? 7.235,-<\/font><\/span><\/td>\n<\/tr>\n
Savers’ allowance (\u00a7 20 para.4 EStG)<\/font><\/span><\/td>\n? 1.550,-<\/font><\/span><\/td>\n<\/tr>\n
Flat-rate amount of income-related expenses for investment income<\/font><\/span><\/td>\n <\/td>\n<\/tr>\n
(\u00a7 9a EStG<\/a>)<\/font><\/span><\/td>\n? 51,-<\/font><\/span><\/td>\n<\/tr>\n
Special expenses lump sum (\u00a7 10c Abs.1 EStG<\/a>)<\/font><\/span><\/td>\n? 36,-<\/font><\/span><\/td>\n<\/tr>\n
Special expenses deduction for training costs<\/font><\/span><\/td>\n? 920,-<\/font><\/span><\/td>\n<\/tr>\n
(\u00a7 10 para.1 No.7 EStG)<\/font><\/span><\/td>\n <\/td>\n<\/tr>\n
 <\/td>\n <\/td>\n<\/tr>\n
Other special expenses<\/font><\/span><\/td>\n <\/td>\n<\/tr>\n
and agw. Loads<\/font><\/span><\/td>\n? 208,-<\/font><\/span><\/td>\n<\/tr>\n
SUM<\/font><\/td>\n? 10.000,-<\/font><\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

When shifting income to children, it must be remembered that child benefit and many other tax benefits cease to apply if an adult child in education earns more than ? 7,188 in 2002. has income and emoluments (\u00a7 32 Abs.4 EStG<\/a>). With adult children in education<\/b> the 7,188 ?-income limit<\/b> should be absolutely kept. Parents who wish to take advantage of the tax benefits of ‘family splitting’ and still retain influence over assets can achieve this by setting up a family company in which the children (and other dependants) are involved as minority shareholders. A family company also has the advantage that this company can make loans to a related business, whereas the donation of funds that are subsequently made available to such a business again as a loan must be planned very carefully from a tax point of view (St+W 2001,557).<\/font> With regard to inheritance or gift tax<\/b>, it is advantageous if the family company has commercial income. In this case, Sections 13a and 19a of the German Inheritance Tax Act (ErbStG) apply when a share in this company is donated, i.e.<\/font> – <\/font>the allowance for the transfer of business assets in the amount of 256,000 ? (Section 13a (1) of the Inheritance Tax Act),<\/font> – <\/font>the reduction of the valuation by 40%, as far as this tax-free amount is exceeded (\u00a7 13a Abs.2 ErbStG<\/a>) and<\/font> – <\/font>the favourable tax class I (\u00a7 19a ErbStG<\/a>).<\/font> If parts of the assets are to be transferred to the life partner or to distantly related relatives, the tax rate for gift tax is at least 17% (\u00a7 19 ErbStG<\/a>). In such cases, the privileges in connection with the transfer of business assets associated with a commercial family partnership have a particularly advantageous effect, because the input tax rate for tax class I is only 7%.<\/font> The (temporary) conversion of an asset-managing family company into a commercially active company<\/b> can be achieved by the company becoming partially commercially active. In addition, the family partnership can participate in another commercially active partnership as a partner or atypical silent partner. However, the family partnership can also be established from the outset as a limited liability company or commercial partnership, e.g. as a GmbH & Co KG.<\/font> If minor children<\/b> are to participate in a family company, it must be considered that the appointment of a supplementary guardian and the approval of the guardianship court is required (DStR 2001,1538<\/a>; St+W 2000,734).<\/font> In addition, the speculation period <\/b>must be observed if real estate from private assets is transferred to a family company or if shares in an asset-managing real estate company are transferred to children or other relatives. Since in such transfer transactions the debts encumbering the property are usually also transferred to the new owners on a pro rata basis, this is a private sale transaction for which income tax may be payable in accordance with \u00a7 23 EStG<\/a> if the 10-year period has not yet expired. Calculation examples for this are contained in an order of the OFD Frankfurt of 5 February 2001 (S 2256 A-16-St II 27 in Finanz-Rundschau 2001 p.322). <\/font>
\n References:<\/font>
\n<\/b> a) <\/font>Tax Euro Smoothing Act in BStBl 2001 I p.3.<\/font> b) von Braunbehrens in Erbfolgebesteuerung 2001 p.204 (with sample contract). J\u00fclicher in Erbfolgebesteuerung 2001 p.77 (with model contract).<\/font><\/p>\n","protected":false},"excerpt":{"rendered":"

by RA Johannes FialaFor income tax, church tax and the solidarity surcharge, children and other dependents are treated as independent taxpayers. In the case of an intact family, a great deal of tax can therefore be saved by structuring measures within a family.the starting point for the following considerations is the fact that for every […]<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":"","rank_math_focus_keyword":"","rank_math_description":"","rank_math_title":""},"categories":[492],"tags":[571,515,531],"class_list":["post-19351","post","type-post","status-publish","format-standard","hentry","category-veroeffentlichungen-en","tag-schenkung-en","tag-selbstaendige-en","tag-steuer-en"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.fiala.de\/en\/wp-json\/wp\/v2\/posts\/19351","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.fiala.de\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.fiala.de\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.fiala.de\/en\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.fiala.de\/en\/wp-json\/wp\/v2\/comments?post=19351"}],"version-history":[{"count":0,"href":"https:\/\/www.fiala.de\/en\/wp-json\/wp\/v2\/posts\/19351\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.fiala.de\/en\/wp-json\/wp\/v2\/media?parent=19351"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.fiala.de\/en\/wp-json\/wp\/v2\/categories?post=19351"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.fiala.de\/en\/wp-json\/wp\/v2\/tags?post=19351"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}