Thanks everyone for the answers.
It was a Hypo 6-month fixed-term account from 2022–2023, where they naturally withheld the tax at source directly upon the return of the capital. This year, I have received and will receive dividends from domestic stocks. The plan is to utilize the dividend taxes paid on them against the capital losses incurred in 2022.
Edit. Yes, indeed, the capital losses were visible in the pre-filled tax information for the 2022 tax year. The capital losses resulted from stock sales exceeding €1,000. During 2023 and later, I’m unlikely to sell anything, so the goal is just to offset the accumulated dividend taxes and the taxes at source from the new fixed-term account already opened.
Yeah, good addition; you can indeed check the link for more details. Another condition for non-deductibility is that the combined acquisition costs of the assets are below €1,000 at the same time.
Okay! Then you, @Fiksaaja, can use the losses against the taxable portion of future dividends. You don’t need to do anything else but check your annual tax assessment to ensure it’s correct. Interest income subject to withholding tax is not taxable income under your Income Tax Act assessment, meaning the withholding tax is the final tax.
Now in the spring, as those assessments are coming in, you should generally consider—in addition to other expenses for the production of income—whether there are grounds to apply for even a partial workspace deduction from capital income. There isn’t the same kind of “deductible” (i.e., deduction for the production of income) as on the earned income side, and if the capital income isn’t sufficient, the deduction is automatically applied to earned income taxes as a tax credit for a deficit (alijäämähyvitys). Regarding the amount, just note that across all income sources and types, the deduction can be a total of €920 at most (2022) when it’s a standard formula-based deduction and not based on higher actual costs.
For example, with full-time investing. Or if you use a home office fifty-fifty for both earned and capital income generation. (The taxman didn’t provide a more specific stance this year either, when I asked)
Disclaimer. These are unofficial guidelines. Always verify with your own tax official (and even then, things can still go south).
Yeah, I’ve been thinking the same based on the guidelines—that capital income should be the primary source of income.
In any case, the activity must certainly be significant for it to be easily justifiable. I don’t have more specific personal experience regarding the taxation practice for this item. Perhaps more information could be found in the commentary on the Income Tax Act (TVL), other legal literature, or legislative history, if one has the time and interest. Case law might be quite limited since it is such a fiscally minor item, and the Tax Administration usually refers to the most important rulings in its guidance.
Since the tax authorities don’t provide even an indicative figure, I’ve just made a rough breakdown in my head:
If capital income is under €5,000, then the smallest deduction
If over €5,000 and at the same time a relatively significant portion (e.g., >10%) of the total taxable income for the year is capital income, then the middle deduction
If capital income is the primary source of income and a significant absolute amount (at least five figures), then the full deduction.
In reality, trading volumes and such probably also factor in, but indeed, as long as no clear instructions on euro-denominated income or the required share of capital income are given, one just has to settle for their own conclusion and estimate. So far, no clarification has been requested with these specs, but then again, I don’t know if an actual human has even checked my tax forms.
Purchase and sale costs and custody fees. I think there was some kind of deductible for the custody fees. Nordea had reported some expenses on my tax return.
I have a couple of questions… I am in the process of a forest sale, with me as the seller and Tornator as the buyer. The deal will be finalized once I hit the 10-year ownership mark at the end of March, so that I can use the deemed acquisition cost.
Capital gains tax will be payable on the forest sale, but when does the tax authority deduct losses incurred from stock trading in previous years? I intend to discuss this with the tax office and the bank, but I was just interested in hearing in advance if anyone has personal experience.
Does the bank set aside the tax amount during the transaction for the tax authority to take, or is the deduction from the capital gains handled now so that I can keep the sum, or does all of this happen over a year from now, processed normally according to the tax year?
Once the trade has been completed and it is clear how much profit was made, you are free to pay the taxes. You can get a prepayment tax slip from the Taxman by request.
Or you can keep the whole amount and pay it the following year as back taxes (“mätkyt”). Note that nowadays the interest rate is no longer around zero, so you will end up paying some interest for that pleasure. If you don’t apply for prepayment tax slips right away, you should at least invest the tax amount somewhere that generates a return; otherwise, you’ll lose out by the amount of the interest due to the delay.
Of course, if you have losses carried forward, you can calculate for yourself how much to deduct from the profits when adding up how much you’ll pay the taxman, and this way pay the correct amount in advance. Or you can choose not to, and you’ll get a tax refund once the Taxman has tallied up the final verdict.
And just to clarify: as I understand it, this is tax-year specific, meaning if the trades happen in the spring, you have until the end of the year to pay the taxes. Interest only starts accruing in the following year until the taxation is finally processed and you get back taxes if you did nothing.
Thanks @Jarnis for the answer. Fortunately, well-performed stock trades ensure that the taxman is left with almost nothing to take from these forest sales so one could easily just leave the difference for the taxman to calculate in next year’s taxation
A small clarification to an otherwise comprehensive answer: interest on residual tax starts to accrue from the beginning of February following the tax year, which in this case means from February 1, 2025. You can also pay earlier than the residual tax due date specified in the tax assessment—this, however, requires an application for an additional prepayment.
Not exactly an investment-related question, so if anyone feels another thread would be more appropriate, please feel free to move it. The question is primarily tax-oriented.
Imagine a situation where my sister and I receive an apartment worth about €180,000 as a gift from a close relative, split 50/50. The relative retains a life-long right of occupancy to the apartment.
The gift value is therefore €180,000 / 2 = €90,000.
I calculated the gift tax as follows: the relative’s age coefficient (64–68 years old = 8) and the apartment’s yield coefficient = 5%, so that 8 x 5% x 90,000 = €36,000.
The taxable value of the gift would then be €90,000 - €36,000 = €54,000, and the gift tax on this amount would be €4,600.
My question is: have I calculated the gift tax correctly, and have I accounted for everything here, or could the tax authority still hit me with a surprise blow to the jaw after receiving the gift?
(The right place for this would probably be the “Q&A thread on taxation matters”, someone will likely move this when they have time).
But the calculation is indeed correct, if the tax class is indeed 1. There may be differences of opinion with the tax authority regarding the determination of the property’s value; with that in mind, it is good to obtain documentation to support the valuation.
I inherited fund units from a parent who passed away in December 2022, and in 2023, I sold, among other things, my inherited OP-vuokratuotto (OP Rental Yield) units and some OP-Rohkea (OP Bold) fund units. However, these were marked in the pre-filled tax return with a 20% deemed acquisition cost (hankintameno-olettama), which led to quite substantial back taxes in the tax returns. The acquisition cost for that rental yield fund was approximately €5,600, but for the sale price of €5,300, the 20% deemed acquisition cost was €1,060. Can I add the acquisition cost defined for inheritance tax purposes (the value on the date of death) to the relevant section in OmaVero and trust that the matter will be corrected? Also, can the rental yield fund’s outrageous 5% redemption fee be added to the selling expenses?
The inheritance tax value can be used when the acquisition of the assets has actually been taxed in inheritance taxation and in the finalized taxation, the assets have been valued as prescribed in Section 9.1 of the Inheritance and Gift Tax Act (PerVL). Therefore, I’m replying assuming that the inheritance taxation has been completed and the distribution made, and that the €5600 is your share of the inheritance tax value of the assets confirmed in Finland, and that there are no special circumstances involved (such as part of a generation transfer).
You can find simple basic principles here. Based on Section 47.1 of the Income Tax Act, the acquisition cost of assets received without consideration is considered to be the tax value used in inheritance and gift taxation. The tax value used in inheritance and gift taxation is equated with the actual acquisition cost referred to in Section 46.1 of the Income Tax Act (TVL) in the taxation of capital gains.
In this case, you can enter the tax value used in inheritance taxation as the acquisition cost for the inherited fund units. Verify the value from the inheritance tax decision and not from the estate inventory or the deed of partition (just in case the Tax Administration has deviated from the values applied in the partition/distribution). If the result is more favorable for you this way than using the deemed acquisition cost, the Tax Administration should calculate the capital gain/loss based on it.
Expenses incurred for obtaining the gain, such as selling costs and brokerage fees, can be deducted from the gross income in the same way as in a sale of property acquired for consideration, when using the actual acquisition cost. I’m not quite sure what OP’s reports look like, but you should check that the disposal price from which you deduct the brokerage fee is definitely the gross amount. These should then not be deducted elsewhere on the tax return (such as expenses for the production of income).
If you wish, you can also call the service number beforehand/afterwards to ask for confirmation.
Can anyone tell me/confirm (from personal experience) how taxation and practical matters work in the following situation:
An apartment subject to a widow’s right of occupancy (owned by the children) is sold, and a new apartment is purchased to which the widow’s right of occupancy is transferred.
My understanding is as follows:
Direct heirs pay inheritance tax normally, minus the right-of-occupancy deduction.
The apartment is sold (in this case) immediately after the distribution of the estate and the delivery of the inheritance tax assessment.
The value of the apartment does not have time to increase, meaning no capital gains tax is incurred on the sale.
The direct heirs buy a new apartment (equal to or lower in price), to which the widow’s right of occupancy is transferred (a right granted by will to transfer the occupancy right to another property).
If funds remain after the purchase of the new apartment, these funds are distributed among the direct heirs without any tax consequences.
When the widow passes away, the right of occupancy to the apartment expires, and the direct heirs can sell the property. If the value of the apartment has increased, it is taxed normally according to capital gains tax regulations.
Generally speaking, if the person entitled to a life interest (hallintaoikeus) waives it, it is considered a gift to those who benefit from it, often the heirs of the deceased.
This can happen when the surviving spouse decides to move. There may be tax reliefs if, for example, the surviving spouse’s health declines, meaning they are forced to move against their will. This gift must be reported to the tax authorities, or they will impose a penalty.
One could think that if the surviving spouse moves to a cheaper apartment and the life interest moves with them, the cheaper apartment may result in a lower value for the life interest, which could then be considered a gift.
BTW, if the surviving spouse has done or commissioned anything that increases the value of the apartment, it’s worth saving the receipts; it has been an investment that increases the property’s value and can reduce the heirs’ capital gains tax because the value of the inherited property (the realized price) has been increased through investments. Drainage, roof renovations, solar panels, and other energy technology, etc. etc. Of course, in this case as well, it’s worth making sure that investing 100% with the surviving spouse’s funds isn’t considered a gift…
so one could easily just leave the difference for the taxman to calculate in next year’s taxation 