Hi All,
My girlfriend is thinking about starting small business and need some capital. Since we are not married yet what is the best way to handle money loan between us to avoid tax implications?
Should we do this as loan with 0% interest and then each year put this to declaration?
In one of admin.ch pages there is shortly mentioned that giving money to household member is not treated as gif. So, would it be easier do as one time payment and declare as gif?
Any ideas?
Thanks
Don’t loan the money, most likely you’ll never see it again and it’ll ruin your relationship.
So, would it be easier do as one time payment and declare as gif?
Gifts between non relatives are taxable
If you so much believe in her business that you’re willing to invest money in it, then why not do it properly and officially have shares in it? If you’re not sure if the business makes sense then of course don’t give her the money.
I’m not sure it’s that easy, otherwise people will get loans with each other just to pay less taxes.
Yes, a loan at 0% is the way to go (aka Zinsloses Darlehen).
She declares it as a debt (to u) in her Steuererklärung, and u as a credit, each year same numbers, easy-peasy.
But make a small simple contract with an expiry/payback date in 2 or 5 years or something & get yourself some kind of receipt. Then u can decide at that time if u want the money back or extend the loan again.
A “zinsloses darlehen” without expiry date becomes her money after 10 years, unless interrupted by a new contract, part payment etc.
I know all this is only important should u guys fall out, but u know, better make the written stuff in good times.
A “zinsloses darlehen” without expiry date becomes her money after 10 years, unless interrupted by a new contract, part payment etc.
Something new every day. Beware of “internet lawyers”.
since this forum is free all tips are exactly just that (and not legal binding advice).
Loans are an important tool, not the least for the reasons the hedgehog mentioned above. Even when executed in a non-optimal way. Googling legal stuff with partial knowledge is a dangerous thing. People turn to this forum for advice. Your overconfident statement is misleading them.
This statement
A “zinsloses darlehen” without expiry date becomes her money after 10 years
is incorrect and not covered by your quoted exerpt on the site of my former teacher. Even after the statute of limitations hits, it’s still your money. You can sue for it, it can be compensated with money she owns you or somebody else. Taking it yourself from her (in a non-stoopid way) would not be theft, as it’s not somebody else’s property. When sued, she would have to explicitely rise the statute of limitations, otherwise she loses. Moreover, putting stuff in your tax declaration as debt (to reduce her tax load a bit) means she recognized the debt. Which triggers the 10-year-timeframe anew.
The real risk is her ability to pay you back.
Great to have a real lawyer on this forum. I mean that.
There were some great advices from @Strabor and @rolandinho earlier about loan to girlfriend.
How does situation changes when speaking about wife? Can money be shifted between non-joint accounts between husband and wife without declaring this as loan?
Does it also have to be reflected in joint tax declaration?
Thanks
Tax people don’t care. Unless you’re separated, you’re always taxed as a single unit.
Divorce people will care, eventually, and it’s not just the status of the account (individual/joint) that matters. Comingling personal and communal property endangers the status of your personal assets even on individual account. Don’t do it unless you’re feeling generous to her and ok with splitting everything 50/50. Also what’s your Güterstand? By default your wife already owns 50% of any income you earned during your marriage, just give her her part of it.
thanks @kilyn
However, how does joint tax declaration look like or how does it differ from single? Do you need to list which account/assets belongs to whom and etc?
Why don’t you just have a look at the forms yourself - https://www.steueramt.zh.ch/internet/finanzdirektion/ksta/de/steuererklaerung/formulare-merkblaetter.html
Income is declared separately for each person, as well as some of the deductions which are per-person and vary depending on personal circumstances (e.g. working / not working). But for the rest, especially wealth declaractions, it lumps everything together and makes no distinction who owns what.
When it comes to divorce, it will be your responsibility to untangle cash and income flows (remember: by default any income - salaries, interests, rents, dividends, etc. accrued during marriage are jointly owned no matter on whose account they are parked!) and prove who owns what. The more you entangle it, the harder it becomes and the punishment for failing to disentangle it is that the divorce court will just consider everything jointly owned and split it 50/50 and it wouldn’t matter so much if money was on your personal account, wife’s or joint account.
