Mr. Zhang and his brother were very filial. In February 105 of the Republic of China, Mr. ZhangdadWhen he passed away, in order for his mother to live in peace of mind, he allowed her to inherit the home that Zhang’s father purchased in 1979.
Unexpectedly, perhaps due to depression, Zhang’s mother also passed away in December of the same year.
After Zhang’s mother passed away, Mr. Zhang inherited her hometown in central China. However, Mr. Zhang worked in Taipei most of the time and went home to live and tidy up during holidays. After a year of consideration, he finally sold the inherited hometown in December 2016.
Because Mr. Zhang inherited his mother’s real estate, the holding period can only be combined with the holding period of the most recent decedent, Zhang’s mother.
That is to say, from February 105 when Zhang’s mother inherited Zhang’s father to when Mr. Zhang sold it in December 2066, since it was held for less than 2 years, it is applicablePremises and land in oneThe maximum income tax rate is 45%
The Ministry of Finance has relaxed continuous inheritance. Calculated during the holding period of real estate acquisition, the tax burden on the integration of real estate and land can be reduced:
On November 2, 2012, that is, yesterday, the Ministry of Finance issued an interpretation order to relax the calculation of the holding period for consecutively acquired real estate.
After approval by the Ministry of Finance, since the real estate sold by Mr. Zhang was “acquired by continuous inheritance”, the holding periods of the decedent or legatee of successive inheritances or legacies can be combined to calculate the real estate holding period.
Therefore, Mr. Zhang’s holding period can be combined with the holding period of Zhang’s father and Zhang’s mother. From the time Zhang’s father purchased his hometown in 1979 to the sale in December 2016, the combined holding period exceeds 10 years, and the applicable tax rate is changed from the original 45%. Reduced to 15% to reduce the tax burden on the integration of real estate and land.
Notes on the Interpretation Order for “Acquisition by Continuous Succession”:
Comply with the regulations for self-use of the house and land:The period of holding may be combined and calculated, and the decedent, legatee or otherspousethe minor children have settled in the houseHousehold registrationIt is limited to the period during which the property is registered and lived in, and is not rented out, used for business or performing business.
In other words, the decedent Zhang’s father, the heir Zhang’s mother, and Mr. Zhang’s own, spouse, and minor children must register their household registration in their hometown, and have the fact of residence, and there is no period of renting, business or business use. Periods can only be calculated together.
If the tax collection agency finds out that there are arrangements or circumstances to avoid or reduce tax liability through legal forms, “continuous inheritance acquisition” will not apply.
Determination of the old and new system for “continuous inheritance and acquisition” real estate transactions:
The Southern District Taxation Bureau of the Ministry of Finance stated that for houses and land acquired by individual transactions due to multiple consecutive inheritances after January 1, 2015, the date of acquisition should be determined based on the time when the taxpayer’s decedent acquired it, and the new system should be used to determine whether the house or land is subject to the new system. The unified tax is still the old system.
Therefore, Mr. Zhang’s real estate transaction income system determines the acquisition date based on the time when the decedent Zhang’s mother obtained it.
The date of acquisition of the real estate by Zhang’s mother was after January 1, 2015, so Mr. Zhang’s real estate transaction income tax is still under the new system, not the old system, and the “continuous inheritance acquisition” of real estate holdings has not been relaxed due to the Interpretation Order. The calculation of the period changes.
Because the Ministry of Finance relaxed the calculation of the holding period of consecutively acquired real estate, Mr. Zhang’s applicable tax rate was reduced from the original 45% to 15%, which still significantly reduced the tax burden on the combined real estate and land.
Did you discover it? There is a big difference between having a plan and not planning. Remember to ask Sister R for inheritance risk planning!
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