Beskatning af avance på en ejendomsinvestering

Annette Hasselbrinck

Student thesis: Diploma thesis

Abstract

The subject of this thesis is the treatment of gains and losses under the Danish Property Gains Tax Act (Ejendomsavancebeskatningsloven) compared to gains and losses under the Danish State Tax Act (Statsskatteloven) regarding investment properties. The first main issue is, when is which law applicable. This topic is investigated by looking into various court rulings and recommendations from Tax authorities. The conclusion regarding when to apply which law is complex. Court rulings and administrative practice form the guideline but in borderline cases it is a decision from the Tax authorities. The decision can be tested in court. When in doubt a binding reply from the Tax authorities might also be asked for. This is recommended regarding the case study treated. The second main issue is an analysis of the tax consequences when applying the two laws. This is looked into first by a theoretical analysis and subsequently by applying the two laws on a real case. The treatment of gains and losses of tax depreciation under the Danish Act on Depreciation Allowance (Afskrivningsloven) and the link to the two laws is also investigated and applied to the case. When individuals achieve a gain the Property Gains Tax Act is preferable as the gain is treated as capital gain taxed at 42 % whereas treatment according to the State Tax Act tax the gain is treated as personal income up to 56 %. If individuals get a loss it is preferable it is treated according to the State Tax Act as they can deduct the loss in the personal income whereas according to the Property Gains Tax Act the loss is only deductible towards other property gains. The main difference if the sold property is owned by a company is in the situation where a loss is achieved as the loss is only deductible towards other property gains if treated according to the Property Gains Tax Act but is deductible in the income if treated according to the State Tax Act. The third issue is a description of what consequences the company structure has regarding the treatment of gains and losses. Again a problem is only seen if the loss is isolated in a company if treated according to the Property Gains Tax Act. This situation however can be avoided by merging with another company expecting to sell a property with a gain at a later stage before the sale takes place.

EducationsGraduate Diploma in Financial and Management Accounting, (Diploma Programme) Final Thesis
LanguageDanish
Publication date2014
Number of pages77