There are a number of issues associated with owner-managed companies. The most central ones often revolve around dividends and capital gains.
Navigating Dividends and Capital Gains
Dividends:
The complex small business rules, which apply to businesses owned by a small group of individuals, are a constant headache for many entrepreneurs.
The rules, which have actually changed every other year since 1976, govern how dividends from the company are taxed. Additionally, dividend rules are linked to capital gain rules. You should not miss the opportunity for advantageous taxation through dividends, if you sell the company without having taken out dividends.
The main areas that govern the effect of applying the rules are mainly three:
- Ownership structure
- Acquisition costs
- Salary, partly the total salary sum and partly the salary of the shareholder and their relatives
Capital gains:
Depending on how you use the rules, there can be significant differences in the taxation of your gains.
To complicate matters further, it's not certain that the lowest tax rate today will provide the best long-term economic result. It's important not to think too short-term. A good piece of advice is to seek help well in advance to find the best long-term solutions for salary withdrawals, company cars, and pension provisions. They affect each other.
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