The Supreme Tax Court has commented on the requirements for an item of daily use and decided that the profit/loss from the sale of high-priced everyday items is not taxable as capital gain from "private disposals" (Section 23 (1) No. 2 Sentence 2 Income Tax Act).
In a most recent decision the Supreme Tax Court held that the sale of a separate undeveloped (garden) property is not exempt from income tax on the grounds that it was not before used for personal residential purposes.
If the taxpayer has arranged for the sale of a property to a third party, there is generally no abuse of tax law (abuse of legal forms) if the property was initially transferred to the children free of charge and subsequently sold by the children to the ultimate buyer. According to the decision of the Supreme Tax Court the capital gain is subject to income tax in the hands of the children based on their individual income tax situation.
