Succession Planning

Planejamento Tributário e Sucessório
Family businesses account for 80% (eighty percent) of the 19 million that exist in Brazil, according to the Global Family Business Survey released at the end of 2016 by PwC (PricewaterhouseCoopers). However, many of these entrepreneurs are not concerned with preventing and organizing their succession and thus do not organize the fate of business assets and other assets accumulated throughout their lives. Remaining inert also does not prevent the common family breakdown that succession often causes. among the heirs. And, if not enough all the wear and tear that this causes, the judicial delays and the high tax burden at the time of transferring the inheritance, make only 12% (twelve percent) of companies remain solidified after the 3rd generation. In addition, the Brazilian States have been systematically increasing the rate of the transfer tax causa mortis - 'ITCD' or ITCMD, in order to increase tax collection, which has led to excessive burdens in a common succession process and legal instability as to the costs incurred. the succession will provoke upon the transfer of the patrimony. The prudent and cautious entrepreneur can prevent family and personal issues from interfering with succession and threatening continuity and can also protect his or her family's wealth by structuring his or her own Estate Succession Planning, as well as aligning the corporate and managerial issues of the enterprise. Inheritance Planning is thus a smart way to preserve assets and maintain business activity in the face of succession, as well as to promote the rapid release of financial resources and assets, preventing conflicts and disputes over inheritance, and protecting their heirs and reducing succession costs. All this reducing the tax costs concerned. In Brazil there are several ways to structure a Succession Planning. For so much, it is necessary first to make a thorough appraisal of the family business assets, understanding the business structure, the way the company is constituted, whether the inheritance is mostly financial assets or real estate or others, the marriage goods of those involved and the participation of children and grandchildren. Only after analyzing all the particularities of the company will it be possible to identify the best Succession Planning option to be followed. Among the mechanisms allowed by law, the most used in a Succession Planning are family holding, will, donation with usufruct reserve, life insurance, investment funds, private pension and supplementary pension plans. The instrument to be chosen will depend on the family business format and its peculiarities and each tool will have its own structural and tax benefit, with the total or partial exemption (or requirement) of certain taxes. The cautious and prudent businessman or investor who decides to structure his succession planning will be minimizing the expenses with the succession of his assets, and consequently, will be protecting his assets and ensuring the continuity of the business that he has constituted throughout his life. In addition to preserving the family harmony, which will continue the business without surprises or surprises, following the will of its founder. Cruz & Biscaia is ready to support and advise your company in structuring its Succession Planning and in implementing the guidelines that will come from the proposed studies.

Asset Protection of Company and Partner Assets

Owning a property in Brazil is not easy, it is constantly being at risk. Every day we are subject to arbitrary (and sudden) changes in legislation, which may completely alter the economic value of assets and rights, or even their availability. when they are not transferred or applied. And taxing is just one of the problems that can come up. In times of instability and legal, for example, inflation and interest rates rise. As a result, the risks of managing a large asset become even greater. There are also extreme cases, such as the Collor administration, where the savings of thousands of Brazilians were frozen, just to give an example. Moreover, it is always very complicated to organize the succession line of heritage. It is not uncommon for cases where legal disputes between heirs lengthen for years, especially when referring to complex legal situations, such as property ownership. In fact, asset shielding is nothing more than tax and legal planning with a focus on wealth management. The strategy is basically to protect equity under the cloak of a legal entity. This is the best way to protect assets and rights, as outside of this model they will be subject to many variables and the common risks among individuals. When structuring a family holding company, assets and rights will be detached from the persons concerned and become compose a unique heritage with well-defined rules. It is possible, for example, to create clauses of impenetrability and incommunicability of assets, not to mention that, in our legal system, the assets of the company are not responsible for personal debts of the partners. This means that if they charge you, your legally protected assets are unlikely to be affected. There is also the practice of setting up companies abroad that give your property even greater protection. These are companies based in tax havens, which have almost absolute tax immunity, besides secrecy, of course. Contrary to popular belief, creating societies in these countries is perfectly legal. The abuse of this model to conceal illicit assets is what makes the operation illegal. It is not only a way of mitigating inherent risks, but also a way of defining inheritance and reducing the tax burden on assets. Therefore, it is very common for people to call asset shielding as legal and tax planning, with significant reduction in tax costs on asset transfers upon succession, for example. And of course, to ensure all these advantages, we need to look to subject matter experts to ensure that everything happens within the law and in a safe and proper manner.
Guilherme Pugsley Street 1280 Green Water ZIP Code 80.620-000 Curitiba - Paraná Brazil
Phone: 55 41 3024 7770 contato@cruzlopesdearaujo.com.br
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