Case 1: Purchase of property under "SIAL01"
1. Background
One of your clients consults you about the following real estate listing he found online. He asks you to help him understand whether this is a good idea and what the implications are. He has also heard that a property in the SIAL category is harder to finance (mortgage) and more expensive from a tax perspective.
Questions
- Describe the subject of the transaction
- Calculate the deferred tax liability at the SIAL level
- Calculate the deferred tax liability at the level of a buyer who is an individual resident for tax purposes in Geneva
- Calculate the deferred tax liability at the level of a corporate buyer headquartered in Geneva
- Calculate the amount of transfer tax in the event of a transfer of the studio to the shareholder
- Calculate the amount of withholding tax upon transfer of the studio to the shareholder and indicate whether the reporting procedure applies.
01 Public limited company of tenant-shareholders.
1. Facts
The client tells you that he has heard that for properties held through a “SIAL,” there is no rental value and that, as a result, this structure is much more advantageous from a tax perspective. He would like to verify this assumption with you. He also wants to understand the implications regarding wealth tax.
Questions
- Take a position on the issue of the absence of rental value for properties held through a “SIAL”
- How is the wealth tax liability determined for properties held through a “SIAL”?
- Is there a tax difference regarding wealth tax between a property held in a “SIAL” and one held in a “PPE”?
- Can the sale of shares by other shareholders affect your client’s wealth tax liability? If so, under what circumstances?
1. Facts
In addition, the client wishes to understand the tax implications of transferring a PPE unit via a gift as opposed to donating shares in the “SIAL.”
Questions
- Please provide your opinion on the issue of the absence of rental value for properties held through a “SIAL”
- How is the wealth tax liability determined for properties held through a “SIAL”?
- Is there a tax difference in terms of wealth tax between a property held in “SIAL” and one held in “PPE”?
- Can the sale of shares by other shareholders affect your client’s wealth tax liability? If so, under what circumstances?
1. Facts
Finally, your client wishes to understand the tax implications of transferring “SIAL” shares through inheritance as opposed to a “PPE” unit.
Questions
- Where is the PPE unit taxable in an intercantonal/international estate?
- Where are SIAL shares taxable in an intercantonal/international estate?
- What value is used to determine the tax base?
- What about any mortgage associated with the condominium unit?
