The extension of the spouses' common property to a dwelling inherited by 1 of them is not a fresh acquisition for the another spouse. After this operation, the property can be sold without the request to pay income taxation (PIT), provided that the heir had it for more than 5 years.
The ultimate Administrative Court issued a substantive judgement for spouses planning to include the property received in the common property. The court confirmed that specified an operation is tax-neutral and opposed the restrictions imposed by the taxation on heirs rapidly selling inherited properties.
Selling an inherited apartment. erstwhile without PIT?
The dispute began with a request for taxation explanation filed by the marriage. They explained that the husband in 2017 inherited his mother's apartment, which she had since 2011.
According to the regulations, the flat was the sole property of the heir, as the property acquired in the inheritance does not automatically enter the common property of the spouses. However, in January 2018, the husband decided to transfer this flat to a common marital estate. 2 years later, the couple decided to sale the property.
The spouses wanted to make certain that the donation of the flat from individual property to the common property of the spouses was treated as an extension of the marital union. As a result, they expected confirmation that the operation was not a wife’s acquisition of the apartment, so it would not be subject to income tax. In their opinion, the fact that they sold the flat 2 years after the husband acquired it does not matter. The sale of private property before 5 years after the end of the year of acquisition or construction is usually taxable. However, in their case, the privilege of Article 10(5) of the PIT Act applies, according to which the five-year period shall be valid from the time erstwhile the property was acquired by the inheritancer.
The IRS was not willing to quit the taxation entirely
Although she did not dispute that the inclusion of a property from the individual property of 1 of the spouses into the common property by way of a donation is not an acquisition within the meaning of the PIT Act, she did not agree to the application of the taxation advantage to inheritance housing.
Officials argued that Article 10(5) of the PIT Act does not apply here as it refers to the sale of property acquired by inheritance. Meanwhile, the wife acquired the property by including the spouses in the common property through a donation from the property of a separate husband. Consequently, according to the tax, the 5-year period on which the taxation on PIT sales depends should be counted separately for each spouse. This meant that only a husband would not gotta pay the tax, whereas a wife could not benefit from the taxation privilege.
Donation of surviving in matrimony and PIT
The spouses appealed to court and won. First, the Provincial Administrative Court in Wrocław granted them the right, which had no uncertainty that the extension of the matrimony union was organizational and is not an acquisition within the meaning of the PIT Act. A matrimony contract cannot be identified as a sale or acquisition of individual assets, as evidenced by the case law. The WSA disagreed with the taxation bill that in this case the wife would make income from the taxed sale of the apartment. The method of calculating the time limit for the payment of disposal of properties acquired by inheritance applies to both spouses.
Finally, the Chief Administrative Court (NSA) did not convince the taxation interpretation. According to the NSA, the extension of the assets of the joint spouses is of an order nature and, in the case of immovable property, does not constitute a re-purchase of them. This is not an optional issue. The NSA noted that the legislator introduced a regulation that, in the case of property acquired in decline, refers to a five-year deadline for the inheritance. In another words, it takes into account the acquisition by the heir and does not supply for a separate regulation for the expansion of the marital property. Otherwise, taxation of sales in the condition per wife would be detrimental to the husband.
According to the Court, it is crucial for the application of the taxation preferences that the heir acquires and this applies to both spouses. According to the judge, rapporteur Artur Kot, the payer did not get the property by expanding the marital union. The sale was tax-neutral due to the fact that both spouses benefit from the fact that the deceased husband's parent was the owner of the flat for over 5 years.
The judgement given under the signature of Act II FSK 1002/21 in the present case is final.
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The matrimony sold the inherited apartment. The lawless impulses of the taxation must have stopped the court
