Tax: from the sale of a house (abroad) to Finland ?

serra · Post by **serra** » Mon Sep 22, 2014 9:14 pm

Hei,

I am a EU citizen living/working permanently in Finland.

My brother is going to buy the 50% of our family house in my home-country (EU). I will then turn around the 50K to my Fin account. My question is:
should I pay any taxes here? If so, do you have any link/info about it?

Not sure if this case might sounds like a gift-tax for the Fin-law, but in my own country we don´t have this kind of taxation for transition/gifts between family members so I am not sure how to handle this situation.

And, would it make any difference if this money would come straight from his bank account instead of mine?

Any help?

Thank you a lot!

Serge

**Sponsor:**

harryc · Post by **harryc** » Mon Sep 22, 2014 10:41 pm

Method of payment means nothing unless you're just trying to find a way that can't be traced.

I know I had to pay on sale of property ex-EU so I might have a good guess it's just simply capital gains - but call Vero.

foca · Post by **foca** » Mon Sep 22, 2014 10:46 pm

http://www.skatt.fi/en-US/Individuals/S ... rty(17168)

Check it here. Basically if you used the property as your permanent home over 2years - there is no Finnish tax on capital gain. But you gave to fill the form and (possibly and if asked) prove that the property (or part of it) has been in your ownership over 2 years. What happens in your home country only matters if the sale is taxable in your home EU country. If it is taxable than tax credit or double taxation exemption may be applied.

Rip · Post by **Rip** » Tue Sep 23, 2014 9:17 am

foca wrote:http://www.skatt.fi/en-US/Individuals/S ... rty(17168)

Check it here. Basically if you used the property as your permanent home over 2years.

and also owned it during the same time. Living as a child with ones parents (who owned it that time) does not count.

serra · Post by **serra** » Tue Sep 23, 2014 11:10 am

Hei,

thank you a lot for the answers!

I didn´t live in that flat for a long time, the last 10 years has been rented and now we have decided to sell it. Things are getting more complicate I guess

Do you know any tax-expert who I could ask some more advise? Or I can just go to Vero but I am not sure if they are so impartial

Thx!

S.

Rip · Post by **Rip** » Tue Sep 23, 2014 11:41 am

Just the basics according to Finnish rules. Assumed here that you've been (partial) owner of the place for ten years (but not have lived in for two years) and you inherited it originally, the selling price can be considered "fair" and that your brother is actually buying the place with his own money (and you're not just distributing cash and other property belonging to yet undivided estate):

Tax on capital gains is 30%. The gain is calculated either by deducting flat 40% of the selling price (so the tax would be 50K*60%*30%= 9K) or what was the actual value (of your half) used for inheritance taxation at the time you inherited the place (in the latter case I think some repairs paid by your money could be deducted too). You choose the one of those two rules that leads to more favorable result.

foca · Post by **foca** » Tue Sep 23, 2014 3:37 pm

This is more or less a"standard" question asked by expats in Finland . Basically any tax lawyer can handle it, try Borenius , they are very competent (though might be a bit overpriced).

serra · Post by **serra** » Thu Oct 02, 2014 6:31 pm

Just an update:
asking to Vero I understood that basically is more convenient that my brother is going to give me 50K as a gift, and reporting it as a gift here in Finland too. Here the link: https://www.vero.fi/en-US/Individuals/G ... 2820854%29
(if someone in the future might need it).

For me it still sounds very stupid because we don´t have such taxation between family members... anyhow, my last question (that I cound´t ask to Vero

) is:
according to Vero I have 3 months to report the gift after received it... what if I forget to report it? Is it true that after 5 years they lose the authority to ask anything back?

Kiitos,

Serge

Beep_Boop · Post by **Beep_Boop** » Thu Oct 02, 2014 8:07 pm

serra wrote: what if I forget to report it? Is it true that after 5 years they lose the authority to ask anything back?

It's probably best if you don't ask this question here.

Honest · Post by **Honest** » Thu Oct 02, 2014 8:26 pm

serra wrote:Just an update:
asking to Vero I understood that basically is more convenient that my brother is going to give me 50K as a gift, and reporting it as a gift here in Finland too. Here the link: https://www.vero.fi/en-US/Individuals/G ... 2820854%29
(if someone in the future might need it).

For me it still sounds very stupid because we don´t have such taxation between family members... anyhow, my last question (that I cound´t ask to Vero ) is:
according to Vero I have 3 months to report the gift after received it... what if I forget to report it? Is it true that after 5 years they lose the authority to ask anything back?

Kiitos,

Serge

According to your link there is no tax for a gift of 4000, what happens if your brother gifts you 4000 euros per month for the next twelve months? Is there any limit on amount or number of gifts per year?

serra · Post by **serra** » Thu Oct 02, 2014 8:33 pm

yes, 4000 in 3 years is the maximum.

Honest · Post by **Honest** » Thu Oct 02, 2014 9:15 pm

so if you can wait 40 years you can get that money for free

Rosamunda · Post by **Rosamunda** » Thu Oct 02, 2014 10:12 pm

serra wrote:...what if I forget to report it? Is it true that after 5 years they lose the authority to ask anything back?

If you bring in the "gift" into Finland in your suitcase, the sniffer dogs will find it. If you have it sent directly to your bank account, the bank will report it. So, all in all, even if you "forget" to declare it (which is NOT a good idea), they will know you've received it anyway. Also, tax authorities within the EU collaborate on tax avoidance and tax evasion. So, it is even possible that when your brother buys your share of the house, this will eventually be reported to the Finnish authorities, even if the cash never comes here.

betelgeuse · Post by **betelgeuse** » Thu Oct 02, 2014 10:26 pm

serra wrote: what if I forget to report it? Is it true that after 5 years they lose the authority to ask anything back?

It's not but since I refuse to help in illegal activities, I will not give you the correct answer or the source.

Rip · Post by **Rip** » Fri Oct 03, 2014 12:27 am

serra wrote:Just an update:
asking to Vero I understood that basically is more convenient that my brother is going to give me 50K as a gift, and reporting it as a gift here in Finland too.

You really asked this from the tax office -because frankly as an answer it makes no sense. If he buys your share of the home from you, that is a sale, not a gift. If he just gives you the money, you still own half of the place (and at some point, somebody will inherit it from you etc.)

How long have you owned it, and what was the value (of your half) of it at the time?

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