Today, the Supreme Court handed down a further four judgments concerning Box 3. These judgments build on the judgments handed down by the Supreme Court last week (the “6 June judgments”).
In our article In last week’s post, we described how the Supreme Court has (once again) ruled that the provision governing income from savings and investments (Box 3) contravenes European legislation (in particular the ERVM) and that this remains the case under the Recovery Act and the Bridging Act. Tax may be calculated only on the return actually achieved on the total Box 3 assets. The Supreme Court has also issued a number of guidelines for determining the actual return.
In its new judgments, the Supreme Court naturally confirms what was decided in its 6 June judgments. In addition, it confirms part of the guidance on determining the actual return:
- unrealised capital gains on property must be taken into account;
- the tax-free allowance is not taken into account;
- property costs are not taken into account;
- The Supreme Court did not rule on the question of whether the value of the owner’s own use of property situated in France had rightly been set at zero, on the grounds that the matter was of no practical significance.
With regard to determining the actual return on a property, the Supreme Court has ruled that the value of the property at the beginning and end of a year must be determined in accordance with the WOZ Act.
You can find the Supreme Court’s judgments of 14 June 2024 here: