Forældrekøb i Virksomhedsordningen: Beskatning af udlejningsvirksomhed efter Virksomhedsskatteloven i forhold til Personskatteloven

Christina Gejel Hansen

Student thesis: Diploma thesis

Abstract

In a time where the availability of apartments for rent in the big cities is minimal and very expensive, an increasingly number of parents chooses to help their youngsters to find a place to live by buying an apartment to their children. It is also very attractive for the parents due to the current low interest rate to invest in an apartment. This thesis describes which tax act, a parent should choose, in order to achieve the biggest tax savings, if they are buying an apartment with the purpose of letting their own child to rent the apartment afterwards. According to the Danish law, buying an apartment, and then rent it to their child, is considered as a business arrangement, and the parents will therefore have to pay taxes of this rental income. In Denmark there are three different tax acts, in which you can choose to be taxed according to. There is a rumor saying, that the tax act called the Business Tax Act, which is a business system for small personal businesses, is the most profitable solution, when it comes to the taxation of a person in business. If the parents don’t active choose another tax act, the person will be taxed according to the general rules of the Personal Tax Act. The purpose of this thesis is to analyze which of these two tax acts that are the best solution for parents buying an apartment for their child. The difference between the two tax acts is mainly, that in the Business Tax Act, the interest will be taxed as a personal income, and therefore gives the taxpayer a higher deduction value. In the Personal Tax Act, the interest will be taxed as a capital income, which gives the taxpayer a lower deduction value. This analyze has shown, that the Business Tax Act requires a lot of administration, but is definitely the cheapest tax act, but because of the complexity in this tax act, it requires an accountant to calculate the taxable income. In the Business Tax Act, the parent has to separate the personal economics from the business economics. When the parent occurs in the Business Tax act, there must be calculated a deposit account and a capital yield. If the deposit account turns out to be negative, there shall be calculated a correction of interest. The capital yield is deducted in the personal income and will be added to the capital income. Even though the taxpayer saves tax because of the allocation of the interest in the tax report, it won’t necessarily be enough saved, when the parent have to pay an accountant to do the calculation. If it should be profitable to occur the Business Tax Act, including the expenses to the accountant the conclusion must be that it depends on the size of the interest rate. But in the Business Tax Act, the parent has the opportunity to save the profit in the business instead of withdrawing the profit. In this way, the parent can save the taxes in the relevant income year, and withdraw the profit later when suitable. The Business Tax Act is very interesting, because of the many opportunities in order to save taxes, when a person has a small business on the side of their real job. If the business produces deficits, it can be deducted in the persons remaining income.

EducationsGraduate Diploma in Accounting and Financial Management, (Diploma Programme) Final Thesis
LanguageDanish
Publication date2018
Number of pages79