Owner-managers have three main channels to build their long-term savings: Personal savings, retirement savings and corporate tax savings. How to mediate… and should it be done?
Three ways to save, with their advantages and disadvantages
Private savings are financed by business income minus all social and tax deductions. It is therefore the solution with the highest production costs. But also the one that gives the most freedom and exposes the least to deferred withdrawals.
Retirement savings make it possible to benefit from the tax deduction of contributions, while preserving the capital outflow since the introduction of the pension savings (PER). It thus benefits from an investment leverage that can be very significant. But it is a blocked savings, with a very heavy latent tax.
Corporation tax savings consist of savings in a company subject to corporation tax. No social or tax levy at the level of the individual, but a corporate tax payable at the level of the legal entity. And of course the exit cost: distribution tax or capital gains tax, depending on the option chosen.
How do you mediate? By what criteria?
To help you better understand each scenario, Pierre-Yves Lagardemember of the National Chamber of Financial Advisors and Experts and partner Imani & You, offers a case study which takes into account the main limitations in this area:
- maintain adequate availability of savings;
- take full advantage of the leverage effect of PER;
- integrate a paradox regarding the provision of PER;
- exploit the strategies permitted by the existence of the holding company.
RFC is the reference journal for the accountancy profession, published by the Order of Chartered Accountants.
Intended for all accounting, auditing and management practitioners, teachers and students, it offers a wide range of topics covered (management, tax, commercial law, social law, etc.). In each monthly issue, a special dossier reports on a specific theme.