View more on these topics

OVERSEAS MATTERS

In the recent case of Gschwind v Finanzant Aachen-Aussenstadt the taxpayer and his wife were resident in the Netherlands. He claimed that the conditions imposed on the availability of the “splitting procedure” to couples not resident in Germany constituted discrimination contrary to Article 48 (now Article 39) of the EC Treaty; the German tax advantage would be denied and the taxpayer`s personal and family circumstances would not be taken into account.



The splitting procedure involves each spouse being taxable on half their total income. It does not apply where one spouse was not resident in Germany unless 90% of the total taxable income is taxable in Germany or, if less, their income from foreign sources not subject to tax in Germany did not exceed a specified amount. The taxpayer was a Netherlands national and worked in Germany. His income accounted for 58% of the couple`s total income. His wife worked in the Netherlands.



The European Court of Justice (ECJ) ruled that there was no discrimination as the splitting procedure conditions were not contrary to article 48 (now article 39) of the EC Treaty. The conditions imposed on non-residents reflected the position where the couple`s tax base was in another member state. The couple`s personal and family circumstances would be taken into account in their state of residence.



COMMENTARY



In the earlier case of Finanzant Koln-Altstadt v Schumaker the taxpayer was resident in Belgium but employed in Germany and he did not receive relief in either state. The German legislation was held to be discriminatory, and it was subsequently changed. However, in the present case the taxpayer would receive the relief allowable to his circumstances with the Netherlands.

Recommended

Chartered Institute of Taxation warns Government over stakeholder

The Chartered Institute of Taxation has warned the Government that its stakeholder pensions proposals are littered with taxation traps.It says that if stakeholder pensions are to be truly successful and accessible to all, further changes will be necessary.The institute says the Government&#39s proposal to open up pensions to those not in work, could in practice […]

N&P appoints ex KPMG man to its board

Norwich & Peterborough Building Society has appointed Michael Fowle to its board as non-executive director.Fowle recently retired from KPMG where he was senior partner and chairman of the London office and south area between 1993 to 1998.He previously served as non-executive chairman for KPMG India, and as senior audit partner and senior UK banking partner […]

Royal & SunAlliance report 20.2 per cent increase in new business

Royal & SunAlliance has reported a 20.2 per cent rise in new business for the first nine months of the year.The figures reveal equivalent premium income was up by £31.8m to £189.2m from £157.4m over the same period of last year.The rise comes on the back of a 37.5 per cent leap in IFA business […]

CGU business up 18 per cent

CGU Life has also reported an 18 per cent rise in new business over the first nine months of the year.The life office says its new business for the year to date is up to £379m EPI from £322m EPI the previous year.New business through its IFA channel also leapt 10 per cent to £251m […]

Indian market rallies as Modi's popularity strengthens

Kunal Desai, manager of the Neptune India Fund, comments on the implications of the BJP’s historic election win in India’s most populous state, Uttar Pradesh. Read the full article here Important Information – for investment professionals only. Not for retail clients.  Investment risks  The Neptune India Fund may have a high volatility rating and past […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment