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When it comes to succession planning and asset transfer, the older generation often faces the dilemma of how to transfer their assets to the next generation efficiently and in a tax-efficient manner without losing control over the income and management of the assets. One solution that is becoming increasingly popular is the establishment of a usufruct deposit.
A usufructuary deposit is a special form of asset transfer in which a securities account is transferred from the older generation (usually the parents) to the younger generation (usually the children). The key feature of a usufructuary deposit is that the older generation reserves the right to continue to receive the income from the deposit and to manage the deposit itself.
Reduction of the assessment basis for gift tax: Establishing a usufructuary right reduces the assessment basis for gift tax. This can significantly reduce the tax burden on a transfer of assets.
Valuation of usufruct:To value the usufructuary right, the annual value of the securities account is multiplied by a factor that depends on the life expectancy of the parents. This valuation takes into account that the parents will only receive income from the securities account for a limited period of time
The usufruct securities account is an effective tool in succession planning, enabling assets to be transferred in a tax-optimised manner while the older generation continues to benefit from the income. However, this instrument requires careful planning and professional advice to ensure that all tax advantages are exploited and legal pitfalls are avoided. A usufruct deposit can be an excellent option for achieving a targeted and tax-efficient transfer of assets.