Tax Consequences of Business Deduction in DGA Divorce in Westland
In the Westland greenhouse horticulture area, where many DGAs manage greenhouse companies and holding structures, a divorce strongly affects the division of business assets. The Old Age Reserve (FOR) and mid-salary schemes in own management are impacted by the equalisation of business assets, as with growers in Monster or Naaldwijk. Distribution of FOR leads to box 1 taxation up to 52%, but Westland entrepreneurs can spread this via bank savings to reduce the burden.
The customary salary rule (article 12a Income Tax Act) requires the ex-DGA to take at least €51,000 salary, which changes upon division of shares in a Westland BV. Upon transfer of shares in horticultural companies, the realisation principles of the Corporate Income Tax Act apply: forfeiture profit on latent reserves in greenhouses and installations. Marital conditions with a settlement clause activate box 3 taxation on deemed return of business assets.
Strategies specific to Westland: demerger of the BV into an operating company for greenhouse horticulture and a holding minimises tax burden, taking into account local subsidies for sustainable greenhouses. The Excessive Borrowing Act limits debts to the DGA after divorce, crucial for financing Westland investments. Pension compensation remains exempt from wealth tax. Practical example from Poeldijk: conversion of FOR to bank savings account saves 20% tax burden in a grower divorce. Report changes timely to the tax authorities in The Hague to prevent additional assessments, and combine with estate planning for succession by children in Westland family businesses.