Capital gain from private fortune or income from lucrative activity?

👉 The taxpayer is a solicitor, working partly on a self-employed basis and partly as an employee. He is also a director of various companies. In 2015, he sold his 30% shareholding in one of these companies.

The tax authorities consider that the shareholding must be attributed to business assets and therefore that the gain is part of the income from his self-employed activity.

👉 Since 1991, the taxpayer has been a director of the company, acting on behalf of one of his clients. In 1995, the group owned by this client, of which the company is a part, was facing bankruptcy. The taxpayer took advantage of a management buy-out (MBO) to acquire a stake in the company alongside others (30% for an investment of CHF 6,000), restructure the company and save it from bankruptcy. In 1996, he became chairman of the company’s board of directors. In 2015, the taxpayer generated nearly 50% of his turnover in the construction sector, on contracts from the company’s long-standing shareholder. During the 2012 and 2013 tax years, the taxpayer generated turnover of 6% with the company. This proportion fell to 1.5% for the 2014 to 2016 tax years. For these reasons, the shareholding cannot be classified as business assets.

Being an administrator is a lucrative dependent activity. This function therefore cannot create commercial fortune.

Investing with others in a company with the intention of reselling it afterwards does not constitute an independent lucrative activity.

His roles as director of various companies do not yet mean that his stakes in these companies benefit his work as a lawyer.

The ruling is in German. It is a Zurich case.

Federal Tribunal, judgement 9C_454/2023, of 11 December 2024