Sale of Shares and Capital Gains: Tax Aspects and Distribution Strategies

The sale of shares in a public limited company (AG) and the associated capital gains are central aspects in the context of business sales and investment. These transactions are subject to specific tax regulations that can have significant financial implications for both the company and the shareholders. In this article, we explain the tax framework governing the sale of shares and capital gains, provide practical examples, and present strategies for tax optimization to minimize tax burden and maximize net returns.

Basics of Selling Shares and Capital Gains

The sale of shares in an AG typically occurs through the sale of stock. These transactions can take place either on the stock exchange or privately between shareholders. Capital gains arise when shares are sold at a higher price than their original purchase price. These capital gains constitute investment income and are subject to capital gains tax (Abgeltungsteuer) at a rate of 25%, plus the solidarity surcharge and, if applicable, church tax.

Example:

A shareholder purchases 1,000 shares of an AG at €50 per share. After several years, the price rises to €80 per share. The shareholder decides to sell the shares. The capital gain is therefore (€80 - €50) * 1,000 = €30,000. This €30,000 is subject to capital gains tax.

In addition to pure capital gains, dividend payments also play an important role in investment income. Dividends are distributions from the company to its shareholders and are likewise subject to capital gains tax. However, the partial exemption of 30% on dividends from shares with at least a 1% stake in the company’s capital can significantly reduce the tax burden.

Tax Treatment of Capital Gains from the Sale of Shares

Capital gains from the sale of shares are treated as income from capital assets under Section 20 of the German Income Tax Act (EStG). They are subject to the flat withholding tax (Abgeltungsteuer), which is withheld directly by the custodian bank and remitted to the tax authorities. The investor receives the remaining amount after tax deduction.

Calculation of Tax Burden:

In the above example with a €30,000 capital gain, the tax burden would be calculated as follows:

Capital gains tax: 25% of €30,000 = €7,500
Solidarity surcharge (5.5% on capital gains tax): €412.50
Total tax burden: €7,912.50
Net proceeds: €30,000 - €7,912.50 = €22,087.50

This calculation illustrates how the flat withholding tax affects the tax burden on capital gains. Shareholders should therefore develop strategies to minimize this tax burden.

Strategies for Tax Optimization When Selling Shares

To minimize the tax burden on the sale of shares and capital gains, various strategies can be applied at both the individual and corporate levels. One of the most effective methods is the use of tax allowances and partial exemptions.

Utilization of the Saver’s Allowance:

Every taxpayer has a saver’s allowance of €801 (single) or €1,602 (married). Investment income up to this amount is tax-free. Through careful planning, this allowance can be optimally utilized.

Partial Exemption on Dividends:

For dividends from shares with at least a 1% stake in the company’s capital, 30% of the income is tax-exempt. This reduces the effective tax burden and increases net returns.

Loss Offsetting:

Losses from capital investments can be offset against gains. This means that capital losses from the sale of other shares can reduce the tax burden on capital gains.

Example:

A shareholder realizes a capital gain of €30,000 from the sale of shares but simultaneously incurs losses of €10,000 from the sale of other shares. The net capital gain is therefore €20,000, on which capital gains tax is applied.

Practical Examples for Illustration

Example 1: Sale of Shares with Partial Exemption

A shareholder holds 2,000 shares of an AG, purchased at €60 per share. The current price is €90. The capital gain is (€90 - €60) * 2,000 = €60,000. Since the shareholder holds more than 1%, 30% of the dividends are tax-exempt.

Calculation:

Partial exemption: 30% of €60,000 = €18,000 tax-free
Taxable amount: €42,000
Capital gains tax: 25% of €42,000 = €10,500
Solidarity surcharge: 5.5% of €10,500 = €577.50
Total tax burden: €11,077.50
Net proceeds: €60,000 - €11,077.50 = €48,922.50

Example 2: Loss Offsetting in Share Sales

A shareholder realizes a capital gain of €20,000 from the sale of shares in an AG. At the same time, they sell other shares at a loss of €5,000. The net capital gain is €15,000, on which capital gains tax is applied.

Calculation:

Capital gains tax: 25% of €15,000 = €3,750
Solidarity surcharge: 5.5% of €3,750 = €206.25
Total tax burden: €3,956.25
Net proceeds: €15,000 - €3,956.25 = €11,043.75

These examples demonstrate how targeted tax planning and the use of allowances can reduce the tax burden and maximize net returns.

Conclusion: Successful Tax Planning in the Sale of Shares

The sale of shares and the associated capital gains are key elements in the context of business sales and investments. Through a solid understanding of tax regulations and the targeted application of optimization strategies, both companies and shareholders can significantly reduce their tax burden and maximize financial returns.

Utilizing allowances, partial exemptions, and loss offsetting are effective methods to minimize tax liability. Furthermore, working with an experienced tax advisor is essential to optimally leverage individual tax advantages and comply with legal requirements.

In summary, careful planning and strategic structuring in the sale of shares and capital gains are crucial for financial success. Companies and shareholders who consider these aspects can strengthen their financial position and benefit from their investments in the long term.

Sale of Shares and Capital Gains