Generationsskifte af SRM Clean A/S

Jacob Rod Andersen

Student thesis: Master thesis

Abstract

The overall topic of the master thesis is business transfer from one generation to the next, also called succession. The master thesis describes the theory on succession and relates this theoretical background to the following real life problem: “How to minimize taxes and fees related to the succession of the shareholdings in the company SRM Clean A/S from father to one of his sons, while taking into account the needs of the father and both of his two sons.” Succession can be a long and complex process, which requires both planning and time, and the thesis is aimed at demonstrating how to make an ideal practice example of this transfer. The example is based on a case study using the Danish company SRM Clean A/S, and the transfer has been constructed as realistic as possible by using the Danish tax rules. Tax rules and restructuring options related to succession have been reviewed in order to identify rules that facilitate a smooth transfer of SRM Clean A/S. The company´s shares are unlisted and the value of the company´s shares is calculated to DKK 25,802,000 based on the instructions from SKAT. The government has recently abolished the wealth tax rate (formueskattekursen) with effect from 5 February 2015. This has a major impact on the valuation of unlisted shares in family-owned businesses, such as the one discussed in this thesis. The main difference from the old rules is that they prospectively shall determine the market value of the shares based on new guidelines. The old guidelines were based on the 1982-circular, whereas the new ones are based on the 2000-circular. After establishing the value of the company´s shares, three succession models with different strengths and limitations were developed. All the models are based on the same premise, which is that the father would receive an output of DKK 8,500,000 after tax in connection with the transfer. It is also assumed that some of the payments related to the succession are covered by the father as a gift from the father to the son. The rest of the payments has been obtained by taking a bank loan. All three models are based on the same assumptions, which make them comparable. The assumptions include an interest rate of 4 %, a deferred tax price of 75 and that the son uses some of his own savings to pay for the transfer. All three succession models also assume full succession, with the sons ending up owning 100 % of the shareholding in SRM Clan A/S. Finally, it is assumed that the other son receives a gift from the father as financial compensation because he does not want any shares in SRM Clean A/S. The results from the three models are compared. Based on the listed assumptions, I conclude that model 1 is the best model for both father and sons. Model 1 is the most favorable model because it has the lowest cost for the son and it still fulfills the father’s economic needs.

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
LanguageDanish
Publication date2016
Number of pages88