What is a Family Foundation?
A family foundation is a legal entity and at the same time a tool for asset protection and business succession, which allows you to minimize tax burdens and ensure the continuity of business operations beyond one generation.
The property transferred to the family foundation comes from one or more founders. Assets may include, among others, cash, stocks and shares in companies, investment certificates in investment funds, real estate, securities, loan receivables, etc.
The key requirement is to transfer assets worth not less than PLN 100,000 as part of the founding fund.
Who is the Family Foundation intended for?
A family foundation is a solution for everyone who wants to secure the future of their business, protect their legacy and minimize tax burdens. If you are an entrepreneur, business owner or investor, a family foundation is for you. It helps you achieve your business succession goals by ensuring you maintain control over your assets. Thanks to the Family Foundation, you can secure the future of your family, accumulate assets and provide benefits to the Foundation’s beneficiaries, e.g. costs of living, education or treatment.
How is a family foundation taxed?
A family foundation is not only a business succession tool, but also a way to minimize tax burdens. Establishing a family foundation and transferring assets to it is generally tax neutral. The lack of tax on civil law transactions (PCC) and CIT at the time of establishment is the starting point. The family foundation benefits from tax exemption as part of its permitted activities, and the 15% CIT tax is charged only when the funds go to the beneficiaries. However, it should be remembered that in the case of conducting business activities that go beyond the permitted scope, the Family Foundation will be taxed at 25% CIT.
Beneficiaries of the foundation who are natural persons are exempt from PIT if they belong to the founder’s immediate family. This concerns the founder himself and his spouse, ascendants, descendants, siblings, stepchildren, stepfather or stepmother. In turn, persons classified in tax group I or II within the meaning of the provisions of the Inheritance and Donation Tax Act will pay 10% PIT on the benefits obtained. Other beneficiaries will pay 15% PIT.
How to set up a family foundation with ASK-Audit?
We will start with a schedule: The most important thing is the action plan. Together, we will set deadlines and steps to make the process of establishing a family foundation clear.
Declaration and statute of the Foundation: We will prepare for you a declaration on the establishment of a family foundation and a personalized statute that will specify the principles of operation of the family foundation.
List of your assets: Together, we will create a detailed list of the property you want to donate to the family foundation.
Bodies and fund: We will help you establish the bodies of the family foundation and the founding fund, which will ensure efficient management of the family foundation.
Registration: We will take care of all formalities related to the registration of your foundation in the register of family foundations kept by the District Court in Piotrków Trybunalski.
ASK-AUDIT provides comprehensive accounting services in the area of accounting and family foundation matters.
Under the contract, we provide the following services:
• We keep the foundation’s business books
• We prepare the foundation’s financial reports and handle their publication in the court.
• Together with the client, we develop the accounting policy and the foundation’s company chart of accounts according to the best standards.
• We carry out activities related to closing the books.
• We keep records of fixed assets, intangible assets, investments and equipment belonging to the foundation.
• We maintain a list of the Foundation’s beneficiaries and assist in tax settlements for benefits received from the Foundation.
• We prepare the annual tax return CIT-8FR;
• We keep VAT registers and prepare VAT returns if the foundation is subject to VAT.
If you are interested in our services and need advice, ask ASK.
