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Tax is not something you put up with; it is something you work out before deciding. We cost the options while there is still time to choose.
Most of a director’s tax questions arrive too late: after the signature, after the distribution, after the sale. By then all that is left is to file. Most of the value of tax advice lies in the weeks before the decision, while several routes are still open.
We act ahead of transactions, alongside the chartered accountant who keeps the books and the wealth management adviser who looks after the director, and then in defence when the tax authorities raise a challenge.
The trade-off turns on four parameters: the company form, the threshold above which a majority manager’s dividends attract social security contributions, the household’s marginal rate and the social security entitlements built up. We cost it on a single sheet, with your chartered accountant, before the meeting approving the accounts.
Flat-rate withholding or the progressive scale, the reliefs available, the treatment of shares whose ownership has been split, the effect of earn-outs: the net figure after tax varies widely with the option chosen and the date of the sale. The calculation is done before signing, not in the following May.
Contributing your shares to a holding company before selling allows the tax to be held over, provided the reinvestment obligations are met within the time limits and in eligible assets. We make the structure safe and document the reinvestments, which the tax authorities check.
Structuring a group means checking the ownership thresholds, the holding period and the consistency between the dividend regime and the capital gains regime. A structure built on the immediate advantage alone often turns against you at the point of exit.
A collective and then an individual undertaking to retain the shares, the holding of a management role, a genuine trading activity: the scheme exempts three quarters of the value passed on but requires monitoring over several years, with filing obligations that, if forgotten, bring the benefit down.
Transfers of SARL shares, of shares in a company limited by shares, of shares in a property-rich company or of business goodwill: the rates and the reliefs differ, sometimes by a factor of fifty, subject to the minimum charge of €25. Our online calculator gives the first order of magnitude; analysis refines the rest.
VAT on property transactions, the option to charge VAT on rents, the regime for property dealers, the tax on office space: these mechanisms govern the profitability of a transaction and are settled before the acquisition.
Replying to a request for information, assistance during an audit of the accounts, observations on the notice of proposed adjustment, referral to a more senior officer, referral to the commission, a formal claim: we run the procedure and negotiate where that is possible.
The right moment
A trade-off costed before the meeting approving the accounts costs one piece of advice. The same trade-off, revisited after the distribution, cannot be revisited at all: the financial year is closed.
The subject is the same. It is when it is dealt with that makes the cost.
How we work
You set out the situation, we say frankly whether we are the right people and what the work would involve. No commitment at this stage.
It describes what is done, what is not, the basis on which fees are calculated and the timetable. Nothing starts without your written agreement.
One lawyer holds your file; each question is dealt with by whichever of us handles it every day. You have only one person to call.
Formalities, filings, deadlines: the firm takes over and keeps you informed until the file is closed.
Frequently asked questions
In a SARL with a majority manager, dividends attract social security contributions above a threshold calculated on the capital, the share premiums and the current account: the advantage erodes quickly. In a SAS they escape those contributions, but remuneration there costs considerably more in charges. In half of our files the answer is a mix, and it depends above all on your social security entitlements and on how far away your sale is.
No, none at all. It is the most common blind spot in the trade-off: ten years of paying everything out as dividends produce an immediate saving and a pension far below what the director imagines, with no cover at all if they are off work.
When there is an acquisition to finance, several shareholdings to bring together, or a succession to prepare. Set up without one of those reasons, it adds filing obligations and running costs for nothing. The tax advantage on its own is not enough to justify it.
The holdover falls away and the capital gain becomes payable immediately, with late-payment interest. The reinvestment must take place within the statutory period, cover the required proportion of the sale proceeds and be made in eligible assets — the acquisition of shares in a trading company, for instance, and not a financial investment.
One tenth of one per cent for shares in a SAS or a SA, three per cent after a pro-rated relief for shares in a SARL, five per cent for shares in a property-rich company, and a banded scale for business goodwill. It is one of the parameters that make one company form preferable to another when the time comes to sell. Whatever this calculation produces, no less than €25 can be charged: a sale for a nominal euro, or one where the relief absorbs the whole base, still bears that minimum charge.
From the moment the notice arrives, yes. The first written replies shape everything that follows, and some time limits — in particular the thirty days to respond to a notice of proposed adjustment — are mandatory. Being represented by a lawyer is a right, and early involvement heads off most disputes.
The legal basis is not negotiable, but the penalties, the late-payment interest and the assessment of the facts leave real room for movement. Referral to a more senior officer and to the departmental commission often bring a file back to reasonable proportions before any litigation.
Practice areas involved
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