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Wealth and Investment Structuring

We design the holding and investment structure most suited from a legal and tax aspect, find and implement governance structures, and build the architecture of your family office. We also create sensible units for special asset classes such as private equity. In doing so, we protect family assets from increased income or inheritance and gift taxes while taking the growing international requirements for compliance, transparency, and supervisory law into account. Our tax concepts are based on the required set of contracts, which we can draw up for you from a single source. We communicate with tax authorities on your behalf, submit applications for tax rulings if required, and support you during tax audits and appeal proceedings.

Succession Planning for Companies and Personal Assets

We accompany succession holistically, considering both strategic and economic aspects. Our succession concept consists of three steps in which we incorporate our many years of experience from comparable projects.

Step 1: Status quo, options and feasibility
A comprehensive determination of facts and ideas provided by the relevant stakeholders is the starting point for the status quo analysis. Based on our established strategy, we develop tax and legal fields of action. In this context we will assess existing legal and tax risks and highlight the need for detailed review where necessary. The result is a feasibility study that outlines the key points of a possible succession in the sense of a roadmap.

We offer modern rolling inheritance tax control systems and can provide indicative business valuations and calculations of deferred tax burdens (administrative assets, payroll, etc.) at any time. Action options to reduce tax burdens can also be modeled and calculated indicatively (e.g. life estate calculations).

Step 2: Detailed examination, valuation, and tax relief analysis
After clarifying the options under consideration, we will perform the relevant detailed tax and legal reviews. This applies particularly if a restructuring of corporate or private assets is necessary prior to succession. We perform dedicated valuations of all asset classes, as well as a determination of the regulations on business asset tax exemption (§§ 13a, b and § 19a Inheritance Tax Act).

Step 3: Implementation and tax declaration
We assist in the implementation of business succession and draft the relevant (tax-appropriate) contractual framework. Finally, we prepare the corresponding declarative statements and gift tax declarations or inheritance tax declarations and accompany the tax assessment procedure.

International Family Relations

Typically, there is at least one international party involved with our clients: the asset or asset holder - the company, its owner, or their family. Sometimes all of the above.

This internationality is associated with a colorful bouquet of tax and legal stumbling blocks. What happens if a shareholder moves away or involuntarily stays abroad longer than planned? What are the tax implications of international investments and what are the reporting requirements? What is the effect of a marriage abroad or to a partner with a different nationality?

Tax deprivation and exit taxation rules must be observed, and private international law can lead to surprising results in questions of inheritance law, family law, and matrimonial property law. With our advice we create legal certainty for assets and family.

If desired, we can develop structures for your assets that accommodate mobility within the circle of owners and avoid tax disadvantages. We coordinate the considerations with the relevant foreign legal systems through our network partners. This applies, for example, to foreign investments or to the involvement of asset holders or beneficiaries who live abroad and are to participate in such structures.

Taxation of Complex Capital Income

We determine the tax-relevant income from capital assets or from private sales transactions for complex assets within the framework of a tax reporting. The tax reporting for individuals includes a statement of creditable capital gains tax and foreign withholding tax, all current income components, and special evaluations of sales transactions - in particular foreign currency gains and losses and forward exchange transactions.
In addition, based on asset reporting, we identify special circumstances that justify the reclaiming of capital gains tax initially withheld by banks in the case of corporate transactions (stock splits, spin-offs, etc.) and prepare the corresponding applications for capital gains tax refunds.
Our tax reporting for business assets is divided into two parts including the tax balance sheet profit determination and the off-balance sheet profit determination. As part of this determination, we create an accounting report that includes all assets and liabilities as well as income and expense components. In addition, the following evaluations are usually prepared:

- Partial exemptions for investment income
- Tax reserve in accordance with §§ 56 (3) InvStG (Investment Taxation Act)
- Stock profit determination (fund acquisitions prior to 2018)
- Creditable withholding taxes by country

Depending on the client situation and asset and transaction size, we support these topics together with our network partner gkn Tec Lab GmbH using an automated reporting tool via the bank interface.

Compliance Consulting

When we kick-off a new client relationship, we work with a standardized client history and record all tax-relevant facts in our internal tax management system. The goal is to obtain a comprehensive picture and understanding of our clients. We further specify the various types of income and request information on the individual sources of income - both domestic and foreign, direct and indirect shareholdings, as well entrepreneurial and asset management sources. Our findings are subject to regular plausibility checks.

We reconcile information we receive with our data for the tax return. If our client acquires or establishes a new business entity, we note this in our client overview, take care of the tax registration/assignment of a tax number, and set up the necessary powers of attorney. When it comes to cross-border matters, we work closely with colleagues abroad who are part of our long-established network.

Advising NPOs and Family Foundations

We advise non-profit as well as domestic and foreign family foundations in the context of the establishment of a foundation. We take care of the ongoing foundation law and tax matters. We have a proven specialist in this area as Dr. Klümpen-Neusel was the former head of the foundation center at HSBC Trinkaus & Burkhardt AG.

Ongoing Tax Consulting

To establish a new client relationship, we work with a modern and standardized questionnaire (internal tax management system). The aim is to obtain a comprehensive picture and understanding of our clients. We specifically ask about individual sources of income and assets in Germany and abroad, about indirect and direct shareholdings and trust structures, entrepreneurial and asset management sources. If possible, we interface with an existing wealth reporting system and reconcile its data for the tax return. We also use wealth reporting as a source of information on legal and economic changes in corporate and personal wealth. This enables us to identify tax and legal obstacles at an early stage to take the appropriate planning or structuring action.

Based on our information, we prepare all required tax returns in a legally secure and efficient manner and fulfill reporting obligations under both §§ 138 of the German Tax Code (AO) and the Foreign Trade Ordinance (Außenwirtschaftsverordnung).

Structuring Real Estate Assets

Real estate is an essential asset class for our clients. The setup, development and succession of a real estate portfolio must be planned with sensitivity and professionalism all while asking the relevant strategic questions:

Are individual properties purchased to be held for the long term or rather to be developed and restructured? Are certain properties of emotional value (family residence, vacation home on the island of Sylt) and therefore have less focus on investment returns? How will they be financed? Are ongoing returns needed on a private level? Should children be involved in this asset class at an early stage?

Based on the insights we gather from asking these questions, we then identify the right legal structure, e.g. to allow the intended participation of minor children without the need for involvement of third parties such as the family court or supplementary guardians, and to bring about a cohesion of the portfolio. From a tax point of view, we consider which structure provides the most favorable current taxation and how an exit/sale might be realized tax-free. In the case of a planned succession, we will collaborate with you to design a transfer that is as tax efficient as possible.

Digital Asset Reporting and Taxes (Foreign Currency Gains/HGB Reporting)

We offer comprehensive services in the field of asset reporting and controlling to private and corporate asset owners, single family offices, and foundations in close collaboration with our network partners. With the help of our network partners, we have access to modern asset reporting systems in which we can map out liquid investments and all other asset classes such as private equity, venture capital, and direct investments. Our strength lies in carefully discussing the scope and structure of asset reporting before converting it into a digital tax report. Asset accounting and asset reporting serve as the basis for tax returns and annual financial statements.

The starting point of reporting is the recording of the individual securities transaction, followed by the coordination of asset statements and comparison with bank documents (tax certificates and income statements), before the result is subjected to a tax control and the tax-relevant income is shown. For securities assets in business assets (securities GmbH), we also create a HGB reporting. Our special competence lies in the determination of foreign currency profits and losses. Depending on the client situation and transaction volume, the tax and commercial law work is carried out by gkn Gräfe Klümpen-Neusel PartG mbB or on an automated digital basis via a direct banking interface in collaboration with our network partner gkn Tec Lab.

Professional Family Wealth and Family Office Structures

Together with our network partner ebel & team, we support you in your considerations as to which goals you and, if applicable, the (entrepreneurial) family would like to pursue with private and investment assets: What should you approach together as a team? Why should the liquid assets secure the essential financial needs? Are you striving for pure asset preservation or are you pursuing growth strategies? What role do the investment assets play in relation to the operating company? Among other things, the strategic asset allocation (investment guidelines), risk diversification and possible decisions on “make or buy” strategies depend on the answers to these questions.

We will develop governance structures for your assets, discuss the advantages and disadvantages of a joint investment platform for the family, and support you in finding suitable decision-makers or network partners. This also includes the implementation of beauty contests, in which various asset managers compete to take over your individual asset management. Modern asset reporting rounds off the service and serves as an operational basis for the defined asset and investment strategy. Following this process, we then transfer the investment, governance, and investment strategy into legally and fiscally suitable entities (holding and investment structures as well as the setup of a Family Office) and support in ongoing issues.

Family Business Consulting and Ownership Strategy

The alignment of the company’s guidelines and the owner family is a key issue. The question of who should and may be involved in the company, whether and which family members should lead the company, and which values the company should pursue across generations are central points that have a decisive influence on the relationship between the company and the family. Hand in hand with our network partner ebel & team, we will work out the self-image of the entrepreneurial family and its tasks as well as establish an intergenerational Family Charter. We are then able to perfectly cast the cornerstones into a legally and fiscally sensible framework, keeping in mind the “DNA” of the established owner family.

Introducing Next Gen and Family Governance

In these turbulent times, assets (whether operational or investor) are not only challenged by legislative and geopolitical developments but are also subject to disruptive influences within the family. Inheritance disputes, compulsory portion claims, and divorces can cause unplanned outflows of liquidity. Assets must be handled responsibly as wealth does not only come with rights but also with obligations.

Together with our network partner ebel & team, we work on rules for mutual communication when creating family governance. This includes understanding the necessary documents (such as marriage contracts, wills, etc.). We work with you to develop concepts that gradually introduce the next generation to both entrepreneurial and investor decisions and help facilitate mutual understanding. We would be happy to accompany you in an intra-family workshop and develop asset succession strategies with you.

Contact us. We are here for you.