Knowing that one's assets are well managed is probably one of the factors that let one sleep more soundly at night. Building a large protective wall around it calms the nerves and has far-reaching advantages.
The more diversified one's assets are, the more important it is to find the right "storage facility".
An excellent option is the asset-managing GmbH is an excellent option. But what does it mean and for whom is it suitable? The asset management GmbH is a special form of asset management and is basically differentiated between two different variants.
A distinction must be made as to whether private assets or direct shareholdings of the partners are contributed and merged.
Regardless of whether you own numerous shares in various companies and corporations such as KGs, GmbHs or Ags and want to exploit their profit distribution to the fullest or whether you want to invest and manage private assets such as shares, securities, bonds, ETFs and real estate wisely and securely, the establishment of an asset management GmbH can be extremely interesting for you.
What is the basic idea of an asset management limited liability company?
Especially for taxpayers with high capital and real estate assets, such a corporation pays off particularly in terms of tax benefits.
The focus here is on the permanent retention of the investment income.
The tax savings resulting from the avoidance of profit distributions have a positive effect on liquidity and enable new investments to be made as well as the ability to pay off liabilities more quickly.
The main focus is entirely on the further and long-term asset accumulation.
Colloquially, this corporation is also often referred to as a "Spardosen GmbH".
Does real estate as an investment suit you? Take the test now:
What is an asset-managing limited liability company allowed to do?
This depends on the exact form and the purpose of the capital company.
A real estate limited liability company, for example, is subject to stronger requirements and restrictions than a general asset management company. The latter may also additionally carry out an operative business, such as a sports shoe business. At least these requirements apply as long as tax savings are the objective of the Immobilien GmbH.
The main task of an asset-managing limited liability company is shown in the administration. It is precisely this requirement that is indispensable. As soon as the GmbH engages in normal business, its tax privileges are lost.
When does an asset-managing GmbH make sense and for whom is it suitable?
Especially for persons with high capital and real estate assets, the establishment of a VV GmbH can be of great advantage with regard to tax benefits. However, this tax saving can only be exploited under various conditions and can consequently be considered worthwhile.
Likewise, the long-term transfer of assets to children and grandchildren can be a justifying motive for a foundation, as extremely worthwhile tax advantages can also be expected with regard to inheritance.
First, however, the question arises as to what goals are being pursued with the investment. Particularly in the field of real estate investment, setting up a founding a real estate company is a great is a great opportunity to make the most of it.
In other areas of wealth accumulation, too, there are some circumstances that should make you consider setting up an asset management limited liability company.
Forms of the asset-managing GmbH
In principle, there are different forms of asset-managing limited liability companies:
A limited liability company set up specifically for real estate investments
A limited liability company set up specifically for equity investments
A limited liability company created specifically for shareholdings
Special form: Real estate GmbH
For every real estate investor, the question arises, especially with increasing real estate ownership:
How exactly do I best hold and manage my real estate?
The aim is to keep the tax burden as low as possible and to reinvest the resulting tax savings sensibly. This is particularly important for high-yield properties.
What is an asset management real estate GmbH allowed to do?
A real estate GmbH may only manage and use real estate assets. In addition, it is permitted by law to manage its own capital assets (e.g. shares), to manage residential buildings and to build and sell houses or condominiums.
Main task: Management of the income from renting and leasing the condominium
No commercial real estate trading
Commercial trade: purchase and resale of three or more properties within 5 years
No commercial activities in the GmbH
How can tax relief be achieved in the case of a real estate limited liability company?
1. the extended property reduction
Through the extended property reduction, the real estate GmbH be exempt from exempt from trade tax. be exempted.
This legal regulation provides tax relief for asset management companies. Letting your real estate is classified as an asset-managing activity and thus precisely this profit is waived when calculating trade tax. The trade tax on your rental income is waived.
> Your activity must be limited to the management of rental income and may in no case be classified as commercial property trading
> Especially for high-yield properties, this regulation offers a wonderful opportunity to optimise profits!
> Disadvantage: Increase in value of real estate of the GmbH is subject to taxation, even after expiry of the 10-year period (unlike the sale of privately owned real estate)
Taxation of income from letting & leasing
Taxation of capital gains
Real Estate Ltd.
Exempt from trade tax
Privately held property
Taxation according to the Income Tax Act
Complete tax exemption after 10 years
Sale as a private person
Sale by Immo GmbH
Holding period < 10 yrs
private tax rate
Tax rate GmbH
Holding period > 10 y
Tax rate GmbH
2. 6b Reserve
As already mentioned above, care must be taken not to be classified as commercial property trading; the 6b reserve is an important factor here. It is possible to reduce the taxable profit and thus achieve a tax saving.
Reserves are a kind of Appropriation of profits
Strictly speaking: Tax deferral until disclosed hidden reserves can no longer be processed into a tax-free reserve
The 6b reserve can be helpful if:
you wish to sell a property of the GmbH tax-free
the "no purchase/sale of more than three properties in five years" limit has been exceeded
or the intention is to do so
Consequently, the proceeds can be used in full to finance new investments, the liquidity situation remains stable and considerable capital benefits can be generated through wise investment decisions.
Vermögensverwaltende Immobilien GmbH Taxes
Within an asset management limited liability company, the overall tax rate on income is made up of:
Corporate income tax (15%)
Solidarity surcharge on the amount of corporate income tax (5.5%)
Trade tax (15%)
In the special form described above, the trade tax does not apply thanks to the use of the "extended property reduction.
At what point is a real estate limited company worthwhile?
The more real estate assets there are, the higher the notional tax rate on private assets, and the greater the advantage of a real estate limited company.
If you want to create long-term reserves through the sale of your real estate in order to reinvest and further build up your assets, you will benefit from the consistently low tax rate of a real estate company. However, it is important to bear in mind that your activities fall outside the scope of commercial property trading.
Sie wünschen sich mehr Information zum Thema Immobilien GmbH und Sie möchten genauer wissen, wie Sie zu Ihren Steuerersparnissen mit Hilfe der erweiterten Grundstückskürzung und der 6b Rücklage kommen? Informieren Sie sich gerne in unserem Blogartikel zur Immobilien GmbH.
Special form of asset-managing GmbH for equity investments
The asset-managing GmbH also offers interesting tax advantages with regard to trading in shares, ETFs or other securities.
Basically, a distinction should be made between price gains and dividends/profit distributions.
In the case of the latter, there are no tax benefits within an asset management company. In the case of capital gains, however, there is.
Taxation of capital gains
Taxation of dividends
Asset management GmbH
Exempt from corporate income tax
No tax exemption
Dividends or profit distributions
Capital gains tax or partial income procedure
Capital gains tax or partial income procedure
Another difference lies in the deduction of costs (acquisition as well as disposal costs). In the case of capital gains, the actual costs can be deducted, whereas in the case of dividends, only the lump sum of 801 euros for individuals and twice that amount for married couples is relevant.
In principle, 30% tax is paid on share profits within a GmbH, consisting of corporation tax and trade tax.
A large part of the profit remains to be reinvested.
Exemption from corporate income tax
However, 95% of profits from dividends or profit distributions are exempt from corporate income tax.
The same applies to dividends and profit distributions, but a shareholding of at least 10% is required. Accordingly, no KStG exemption can be expected for free float.
It must also be noted that losses from share gains are not deductible or offsetable against gains from share trading.
However, if the asset-managing GmbH makes a profit and distributes it to the owners of the GmbH, these distributions are definitely taxable. The distribution to shareholders is subject to taxation in the form of capital gains tax.
For you as a private individual, it can therefore be advantageous to hold the shares within your GmbH and to make further investments with the profits instead of accepting the capital gains tax due on distribution.
If you are active in both share and real estate investment, there is nothing to stop you from setting up your own limited liability company. Quite the opposite.
Share transactions do not have a disadvantageous effect on an extended property reduction if the trade is made with own capital and not with that of the company.
The silver bullet would thus be to set up an asset-managing real estate limited liability company that benefits from the extended property reduction and does business on the stock market on the side.
Special form: Holding GmbH for participations
Assuming that you now profit primarily from the profit of your holdings and want to let this flow to your private assets, our good old friend, the capital gains tax, makes herself felt. Here is an extremely charming variant to turn your back on it - the establishment of a holding company. This requires a parent company and at least one subsidiary, which are legally independent of each other.
Through this corporate structure, you benefit from the fact that no capital gains tax is due when the subsidiaries distribute profits to the parent company.
We are talking here about an asset-managing investment GmbH. The combination of a real estate limited liability company and a holding company creates the best conditions to get the lowest possible tax rate for your capital gains.
Let's take a closer look with the help of an example:
An entrepreneur founds a limited liability company which is responsible for the sale of sports shoes. His goal is to optimise the company's profits from a tax point of view.
If he now sets up a holding company and transfers all the profits of the subsidiary (in this case the sports shoe business) to the parent company, he can avoid paying capital gains tax. The parent company receives all the profits and he can use them to make further investments and specialise in deposits, for example, and set up another subsidiary for this purpose, which also transfers its profits to the parent company. It should be noted, of course, that the subsidiary (sports shoe business) is taxable like a completely regular GbmH. The advantage lies in the low taxation of the profit distributions. This construct can be spun out any number of ways and shows the advantage of setting up a holding company.
As you can see, the establishment of a limited liability company benefits you in both cases. Both with regard to the management of private assets and that of shareholdings.
Participations > 15%
Profit distributions: 1.5% total tax burden Capital gains:1.5% total tax burden
Profit distributions: 95% corporate exemption, full trade tax liability Capital gains: 1.5% total tax burden
Profit distributions: Full corporate income tax and trade tax Capital gains: 1.5% total tax burden
Privately held participations
Capital gains tax
Capital gains tax
Capital gains tax
What must be taken into account when setting up a company?
Of course, some basic conditions must be met in order to be able to establish an asset-managing GmbH. Every future shareholder should be aware that a formation always involves a lot of (initial) effort and costs.
Accordingly, you should only decide to set up and maintain such a limited liability company after carefully weighing up the costs of tax savings against the costs to be brought in and, in any case, seek good advice from a trusted tax advisor.
Another option may be to buy an already existing limited liability company. Here, however, it must be carefully checked whether all the necessary requirements for your planned venture are met.
What expenses are incurred during the foundation?
Deposit of 25,000 euros
Several thousand euros for business registration, trade register application, notary fees as well as lawyer's fees for any kind of contracts.
How much capital do you need?
Minimum share capital 25,000 euros
Additional planning of sufficient reserves
What steps does one go through when founding a GmbH?
Preparation of articles of association
Important: Indication of the purpose of the activity: Asset management
Opening a business account
Notarisation of the contract by a notary public, as well as signature of all shareholders
Payment of the capital contribution into the business account
Entry in the commercial register by notary after proof of payment
Entry in the commercial register by the competent local court
Announcement of the GmbH
Only then may the GmbH become active.
In order to avoid unnecessary mistakes and additional costs when going through the above process, it is advisable to always seek advice and guidance from a tax advisor.
What are the costs associated with an asset management limited liability company?
With regard to the running costs of a GmbH, approx. 2,000 to 3,000 euros can be expected. These only change with higher expenditure if the GmbH makes a lot of turnover, employs a lot of staff and there is a high level of administrative expenditure overall.
Above all, ongoing costs, such as those arising from indispensable tax advice, should be considered. Annual accounting is also an ongoing burden.
Advantages and disadvantages of an asset management GmbH
The decision for or against the establishment of an asset management limited liability company should definitely be well considered and weighed up, as it depends on your individual situation and, above all, on your future intentions and plans.
In order to simplify the decision for you, here is a summary of the advantages and disadvantages of an asset management GmbH, also in particular when setting up a real estate management GmbH. Establishing a real estate management GmbH
Advantages of an asset-managing GmbH
Significant tax savings (depending on the form of the asset management GmbH)
Circumventing corporate income tax by granting loans
Worthwhile especially for people with high capital and real estate assets
Tax advantage also in the case of long-term transfer of assets to children or grandchildren
Joint establishment with several creditworthiness lenders (>positive impact on liquidity and redemption)
Focus on long-term asset accumulation
Disadvantages of an asset-managing GmbH
Only suitable for long-term asset accumulation
Risk of extended land tenure reduction
high start-up costs
High current administrative costs
Assets contributed to GmbH not private assets, but business assets for tax purposes
Continue to tax shareholders' salaries privately
No longer a private individual after founding a GmbH
Little flexibility (only via distribution or salary)
Duty to publish the annual financial statements
Special case with real estate GmbH
Gains from the sale of real estate cannot be sold tax-free even after the expiry of the 10-year period
Should I now decide to set up an asset-managing limited liability company? Our conclusion
The most important aspect on which one should base one's decision for or against the establishment of such a limited liability company is certainly one's own investment strategy.
Do you attach particular importance to long-term asset accumulation and less to frequent and short-term profit distributions? In this case, you should consult a trusted tax advisor regarding your individual situation and future plans and seriously consider setting up an asset-managing limited liability company.