What is capital income?
As the term implies, capital income comprises first and foremost the sum of the income and expenses that relate to your wealth, including both current capital income/expenses and capital gains/losses.
Capital income constitutes, pursuant to Section 4 of the Personal Tax Act, the total net amount of:
- Interest income and interest expense
- Gains and losses on shares
- Calculated return on capital in self-employment
- Taxable stock dividends that are not stock income
- Surplus or deficit of one- or two-family houses, etc., second homes, condominiums and the like
- Commissions
- Deduction of interest correction
- Profit on real estate
How is capital income calculated?
Capital income is calculated according to the net income principle in such a way that capital income is a single total amount. Capital income can be negative, for example because you have significant interest expenses. This may be particularly the case for homeowners e.g.
Can you get a deduction on your capital income?
In fact, it is possible to get a deduction from capital income. For example, you can deduct the operating costs incurred to acquire, secure or maintain the capital income, such as stamp, brokerage or trading costs, in accordance with Section 4 (2) of the Personal Tax Act. The deduction assumes, of course, that the expense is deductible. For example, read more about the rates deductions are possible hereto.
Should we talk in more detail about capital income and tax?
Tax advice at Skatteinform is characterised by a thorough review of your options to be able to optimise your tax situation both fiscally, legally and financially. With us, you are assured of a clear overview of your financial circumstances and tax situation, with which you can lay a clear and clear tax strategy that creates value for you as an individual or business owner.
Keep up to date with the latest knowledge in tax law and tax jurisprudence
You now have the opportunity to access all SkatteInform articles including the newsletter Aktuel Skat, where you will get the latest knowledge in tax law and jurisprudence in the tax area. Find the latest knowledge hereto.
Contact us and hear us more about how we can provide you and your company with tax advice
If you need assistance or have received a letter from SKAT, please feel free to contact us. We are ready to help you further.