Compensation in Divorce for Director-Major Shareholders
A divorce where one or both partners are director-major shareholders (DGA) involves complex asset issues. In Zoetermeer and surrounding areas, where many entrepreneurs are active, it is important to understand the specific rules regarding DGA pensions and business assets. This guide provides insight into the compensation scheme in divorce, based on the Act on Equalisation of Pension Rights upon Divorce (Wet VPS) and relevant provisions from the Civil Code.
What Makes a DGA Divorce So Complicated?
A DGA is both director and owner of a significant portion (at least 5%) of a BV. In a divorce in Zoetermeer, the following assets must be divided:
- The value of the shares in the BV
- The DGA pension, often accrued within the own BV
- Other assets such as real estate or savings
The challenge lies in the unique fiscal and legal treatment of these elements, which differs from standard pensions or employment income.
Legal Basis: Wet VPS and Civil Code
Act on Equalisation of Pension Rights upon Divorce
The Wet VPS stipulates that pension rights accrued during the marriage must be divided. For DGA's in Zoetermeer, this means that the old-age pension accrued during the marriage period is split 50/50 by default, unless otherwise agreed.
Civil Code (BW)
According to article 1:141 BW, the marital community is divided. In the case of matrimonial property agreements, the appreciation of the business assets during the marriage may need to be offset.
Fiscal Rules
Fiscal laws, such as the Income Tax Act 2001, play a role in distributions from the BV and the consequences thereof for both ex-partners in Zoetermeer.
Options for Compensation in Divorce
1. Pension Division via Wet VPS
The DGA pension accrued during the marriage is divided. This can be done via:
- Regular Equalisation: The ex-partner receives his/her share upon retirement
- Conversion: The rights are converted into an independent pension with another provider
2. Buy-out as an Alternative
Instead of equalisation, a DGA in Zoetermeer can opt for a buy-out, whereby a lump sum is paid to the ex-partner. However, this has fiscal implications that must be thoroughly investigated.
3. Offset of Business Assets
If the value of the BV has increased during the marriage, this growth can be divided, depending on the matrimonial property regime or community of property.
Practical Steps for Compensation Calculation
Step 1: Valuation of DGA Pension
An actuary must determine the value of the pension, taking into account:
- The old-age provision in the BV
- Fiscal reserves
- Life expectancy and retirement age
- Expected returns
Step 2: Determining Marriage Years
Only the pension accrued during the marriage is divided, calculated as: number of marriage years / total accrual years.
Step 3: Determining Compensation Amount
The final amount is based on the actuarial value of half of the rights accrued during the marriage.
Overview of Compensation Methods
| Method | Advantages | Disadvantages | Fiscal Impact |
|---|---|---|---|
| Standard Equalisation (Wet VPS) | Simple, no immediate payout | Long-term financial connection | No immediate tax |
| Conversion of Rights | Independence, own pension | Costs for conversion | Sometimes fiscally advantageous |
| Lump Sum Buy-out | Definitive closure | High costs, liquidity pressure | Taxed in box 1 |
| Offset with Other Assets | Flexible solutions | Complex valuations required | Dependent on assets |
| Combination of Options | Tailor-made | Extensive coordination required | Varies per situation |
For legal support in Zoetermeer, you can go to the Juridisch Loket Zoetermeer or submit matters to the District Court of The Hague.