FAMILY HOLDING COMPANY: SUCCESSION PLANNING AND REDUCTION OF THE TAX BURDEN

Abstract

The objective of this work is to present the advantages of the constitution of the family holding company as a succession planning tool, compared to traditional methods. Through the study of the corporate, financial, tax and social aspects of this instrument, it is considered how the creation of a family holding company can be an effective tool in succession planning and tax savings. It is evaluated how the family holding company can help the patriarch organize and protect the assets, anticipating the succession and reducing the financial and emotional impact of probate processes. It should be noted that the holding company facilitates the management of family assets, preventing conflicts between heirs and reducing costs such as inheritance taxes and property transfers. In addition, it allows for centralized management of assets and greater protection against legal disputes and creditors. However, it is demonstrated that the asset shielding through the holding company needs to follow legal rules, as the attempt to hide assets or defraud creditors can lead to the piercing of the corporate veil. Another point addressed is tax avoidance, a practice that allows the tax burden to be reduced legally, taking advantage of incentives and loopholes in the legislation. With the support of specialists, the holding company enables advantages such as the simplification of sharing, continuity of family businesses and tax savings. It is concluded that the family holding company is a viable and advantageous alternative for business families, although its effectiveness depends on specialized advice for careful planning and alignment with family and succession objectives.

DOI:https://doi.org/10.56238/sevened2024.029-055