The Court of Appeal in The Hague rules that compensation must be offered to X. Only the actual return achieved is taken into account. The (possible) increase in value of the home and a fixed benefit from your own use are not taken into account.
Interested party, X, and his wife Y, established an SCI, Z, in 2014. Z is fiscally transparent and buys a holiday home in France for € 1.7 million. In addition, € 60,000 in French taxes is due. The financing of the house takes place via a loan of € 1.7 million from a French bank. Y receives a donation of € 1.8 million and transfers € 1,760,000 from her account to an investment account of her and double taxation. The inspector is of the opinion that the loan of € 1.7 million should be taken into account and assumes an amount of € 60,000 for the prevention. X disagrees. The District Court of The Hague ruled that the inspector correctly took the loan into account when calculating the deduction to avoid double taxation. On appeal,
The Court of Appeal in The Hague rules that, in deviation from the Box 3 Restoration of Rights Act, compensation must be offered to X. Only the actual return achieved is taken into account. The (possible) increase in value of the home and a fixed benefit from your own use are not taken into account. Because the home is not rented, no income is taken into account for the home. The court agrees with X’s calculation. With regard to the deduction to avoid double taxation, the court finds that the loan is related to the home. It follows from the course of events that Z took out the loan with the house as collateral. Furthermore, the donation was ultimately paid into the investment account and the loan was maintained under the same conditions after receipt of the donation. The court therefore attaches no importance to X’s statement that the loan is related to the investment account.
[Bron Uitspraak]
Articles of law:
Income Tax Act 2001 5.2
Double Taxation Prevention Decree 2001 23
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Tags: case restoration rights box unrealized returns account
