UFS: Rental income is attributed to the minor child when property is managed by the parents

To the tax recognition in Intimate relationships in the family and among relatives – something in the case of hiring or renting – the Financial administration naturally Strict requirements, In order to prevent „tax splitting arrangements“ from ever coming into being. However, the facts underlying a UFS decision of 26.9.2012 (GZ RV/0533-W/12) show that in for justifiable non-tax-related reasons also partially motivated by tax considerations Recognition You can find them.

The starting point is that a father is responsible for his minor son den Purchase price for the purchase of a residential property gifted had and the one from Flat rental achieved Income dem Son to be counted should. Civil law is the son Homeowners and in Land Registry were in favor of des Father a prohibition on disposal and charging as well as a lifetime free of charge Right to live. The rental income will be – Completed everything will be through den Father as legal representative - on behalf of the son Savings account paid in, from which the operating costs are also covered. The Surplus rental revenues are divided into two again savings books with the name of the son The savings books can only be transferred with the approval of the guardianship court. Upon the completion of the 18th birthday, the son is to receive these savings books.

For the taxation attribution of income is the economic perspective (Keyword: economic ownership) determining factor, The civil law construction has only indicia effect. Consequently, the civil law does not prevent the enforcement of the limited ability to conduct business by the son and the necessary representation by the father has nothing to do with that economic attribution the source of income to the son. The UFS saw in the rights and obligations recorded in the land registry no reason to deny the economic ownership to the son, since the father is not, for example, allowed to sell or rent the apartment in his own name. Substantially for die tax recognition The advantage of renting out the apartment to his son is that he receives the rental income, advertising costs are covered by him, and the profit is shared equally between them. Profit from sales The Order by the father taken away is. Comparable to the administration of foreign assets by a trustee, here too the Income calculation to (represented by the father) Son to take place. Since the father’s motivation primarily lies in creating a safe investment and Future provision for his son, and the tax aspects can be set aside, the UFS was able to no design abuse recognize.

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