Those who still want to take advantage of one of the biggest tax advantages of the fiduciary asset management scheme, the possibility of tax-free revaluation, are able to take advantage of the favourable rules until mid-September. After that, the provisions on asset management will become stricter, but due to the other advantages of the scheme, it will worth to consider the creation of the structure in the future in order to preserve the unity of the assets or to make inheritance more flexible. However, it is important to carefully consider the family, legal and tax consequences.
Those who still want to take advantage of one
of the biggest tax advantages of the fiduciary asset management scheme, the
possibility of tax-free revaluation, are able to take advantage of the favourable
rules until mid-September. After that, the provisions on asset management will
become stricter, but due to the other advantages of the scheme, it will worth to
consider the creation of the structure in the future in order to preserve the
unity of the assets or to make inheritance more flexible. However, it is
important to carefully consider the family, legal and tax consequences.
Before reviewing the new rules effective from
September, it is worth to get to know better the terms and advantages of fiduciary
asset management in general!
What does fiduciary asset management mean?
Similar to the trust established in the
Anglo-Saxon legal system, the fiduciary asset management is established by
concluding a contract, with which the asset owner (movables, real estate,
business interests, receivables) transfers its assets to an asset manager, indicating
for whose benefit they are to be managed and deliver them, that is, who will be
the beneficiary of the construction. It is important to know that the assets
placed in trust management are completely separated from the assets of the
assignor, the beneficiary and the asset manager. At the same time, the assignor
can also be the asset management and/or the beneficiary.
What are the advantages and goals of the fiduciary
trust management?
·
asset
protection
For example, assets placed in trust cannot be
enforced due to the owner's debt or in a divorce dispute. Except if the
property assignor already knew that there was a legitimate claim against his
property at the time of entrustment. In such cases, the asset can be reclaimed
from the asset manager.
·
consolidation
of assets
It is possible to transfer the assets of more
family members to a fiduciary asset manager, this way their joint operation can
bring greater benefits.
·
relief
the change of generations, preventing inheritance disputes
With this tool, it is possible to prevent
disputes that may occur upon the death of the owner from paralyzing the
operation of a company, or from liberating the unified ownership. Assets placed
in trust management may even fall outside the probate procedures. In the
contract, the assignor of assets can specify who can have an access to the
assets, when and to what extent.
·
tax
advantages
In addition to the tax neutrality, with the
creation of trust asset management, until September 2023, the founder is able
to appreciate his assets at market value without the obligation of tax payment.
Thus, capital gains from a further sale can be made as a tax-free transaction.
What will change in relation to fiduciary asset
management as of September?
As of September, the transfer of assets is to
be considered a sale transaction, i.e. if the transferor revalues his shares to
the market value, and it is higher than the book value, 15% personal income tax
and in some cases, social contribution tax must be paid on the difference
amount. However, if the property is released only after the death of the assignor
person, then the appreciation will still be tax-free at the time of ordering
the property. However, if the capital is released before of the death of the assignor
person, the beneficiary must pay a 20% higher tax.
However, it is not mandatory to revalue the
property to market value when transferring it to the trust management, so the
tax will only have to be paid when the property is released to the beneficiary.
The tax payment related to the revaluation will therefore be deferred, although
it cannot be avoided.
The revaluation can be tax-free even if the assignor
orders the trust management in the event of his death, on the day of his death.
In this case, however, it must be taken into account that since the trust is
created in connection with death, the property is not separated until then, so
it does not get any protection, and the compulsory part must also be released,
even though the tax exemption related to the revaluation will be available in
this way.
