Compensation in Divorce of a DGA in Delft
In a divorce where one or both partners are director-major shareholders (DGA), specific asset issues arise. Dividing pension rights and the value of a business requires a detailed approach, especially since DGA pensions and shares in a BV often form part of the marital property. This guide provides insight into the compensation rules in a DGA divorce, based on the Pension Equalisation upon Divorce Act (Wet VPS) and the Civil Code, with specific attention to the Delft region.
What Makes a DGA Divorce So Complicated?
A DGA is a person who is both a director of a private limited company (BV) and holds a substantial interest (at least 5%) in that BV. In a divorce, three important asset components play a role:
- 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 complexity lies in the deviating fiscal and legal treatment of these asset components compared to standard pensions or employment income.
Legal Basis: Pension Equalisation upon Divorce Act (Wet VPS) and Civil Code
Pension Equalisation upon Divorce Act (Wet VPS) and Pension Division
The Wet VPS regulates the division of pension rights accrued during the marriage. For DGAs, Article 2 of this act stipulates that the old-age pension accrued during the marriage must be divided equally, unless otherwise agreed.
Civil Code (BW)
Article 1:141 BW addresses the division of the marital community. In the case of matrimonial property arrangements with periodic equalisation, the increase in value of business assets during the marriage must be taken into account.
Fiscal Rules
The Income Tax Act 2001 and the Corporate Income Tax Act 1969 determine the fiscal consequences of distributions from the BV for both ex-partners.
Compensation Options in DGA Divorce
1. Division of Pension Rights (Wet VPS)
The DGA pension accrued during the marriage is divided according to the Wet VPS. The non-DGA partner is entitled to 50% of the rights accrued during the marriage. This can be done in two ways:
- Regular equalisation: The ex-partner receives his/her share upon the DGA's retirement
- Conversion: The rights are converted into an independent pension scheme with another provider
2. Buy-out as an Alternative
Instead of equalisation, the DGA can opt for a one-time buy-out. A lump sum is paid to the ex-partner as compensation for the pension rights. However, this has fiscal implications that must be carefully weighed.
3. Equalisation of Business Assets
If the value of the BV has increased during the marriage, this growth can be divided, depending on the matrimonial property arrangements. In the case of community of property, this increase in value falls into the community by default.
Practical Steps for Compensation Calculation
Step 1: Valuation of DGA Pension
An actuary determines the value of the DGA pension based on:
- The old-age provision within the BV
- Fiscal reserves (FOR/VPV)
- The expected retirement age and life expectancy
- The expected return
Step 2: Determine Marriage Period
Only the pension accrued during the marriage is divided. This is calculated using the formula: Number of marriage years / Total number of accrual years.
Step 3: Determine Compensation Amount
The final compensation amount is based on the actuarial value of 50% of the rights accrued during the marriage.
Help in Delft: Legal Counter and Court
For legal support in Delft, you can go to the Legal Counter Delft. Disputes over DGA divorces often fall under the District Court of The Hague, to which Delft is subordinate. Ensure you obtain expert advice to properly handle complex matters such as pension division and fiscal consequences.