The Court of Appeal in ‘s-Hertogenbosch rules that the benefit for X cannot exceed the reasonably expected return under normal active asset management. There is no ROW.
Interested party, In 2006, A bv and Y jointly founded B bv. In 2007, X buys a property. This building is located next to Y’s building. In 2011, the realization was stopped and B bv was dissolved. The construction rights then return to the brothers. In 2016, they sold the apartment rights to A bv. In connection with the sale, X recognized a negative ROW result of € 83,000. The inspector is of the opinion that there is no ROW, and therefore no loss. The Zeeland-West-Brabant District Court rules that X has not suffered any ROW loss.
The Court of Appeal in ‘s-Hertogenbosch rules that, given the 2007 agreement, the benefit for X cannot exceed the reasonably expected return under normal active asset management. There is no ROW. The same applies to the sale in 2016: only A bv would realize apartments after acquiring the land. The profit from the development does not accrue to X. Furthermore, The negative result achieved in 2016 cannot be regarded as ROW. The court confirms the district court’s ruling.
Also read the themes Real estate operations in income tax and The provision arrangements.
[Bron Uitspraak]
Articles of law:
Income Tax Act 2001 3.91
Income Tax Act 2001 3.90
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