Globes, Ella Levi-Weinriv, 18.02.2020

"We ( the IRS) want to enact in the Arrangements Law clauses regarding the family unit in relation to real estate transfers between relatives. In our opinion, we should look at the family unit as a single unit. I know that we will reach the Knesset and in the end, we will not see everything about the question. When is a property yes shared and when not shared, but today the situation is impossible for both the PA's employees, both the representatives and the public. "

This was announced by Shai Aharonovich, senior vice president of land taxation, during a panel of the "VP of Taxes" panel at the Dead Sea Conference on Taxation and Economics of the Institute of Accountants .

Aharonovich referred to the phenomenon born of the high purchase tax (8%) in the purchase of a second apartment, which created a wealth of tax planning, the most common of which is the transfer of an apartment as a gift to a family, child or parent, or registration of an apartment in the name of the children in the first place. Aharonovich has pledged extensively to the recently published ruling in "Globes , " in the case of the Shamrat couple who tried to evade the heavy purchase tax burden, and found it to be an easy task. The two were owners of a house in the Koraz, when they bought a new house in Vegan.

For a while, they tried to sell the house in Koraz - unsuccessfully, and on the last day when the apartment could still be sold and receive a reduced purchase tax, the couple signed an agreement to transfer the house in Koraz to the woman's mother - as a gift. At the same time, in the same class, the mother signed a will, which left the couple the same house she received as a gift. After about a month, the mother passed away, following which the tax authority discovered the gift transaction and determined that it was an artificial transaction - the sole purpose of which was to evade the high purchase tax.

The case rolled over to the Nazareth Appeals Committee, which accepted the Tax Authority's position, stating that the gift to the deceased mother was an artificial transaction and lacked any commercial flavor except tax avoidance.

The ruling on the Shamrat couple sparked a stir at the estate tax scene, as did other judgments in the area that ruled out unpaid transfers between family members after stating that these were not "close relatives" transfers. Real estate taxation rules do not include a spouse's parent. In the opposite direction, however, it is stated that a "groom" is also considered a "close friend". The real estate tax experts claim that the heavy taxation on property owners and a new tax authority's policy to enter the family unit More than in the past to find out more clearly the ownership of assets in the relationship between spouses and other family members - gave rise to problematic tax planning, as well as problems Slaves and other related to it.

Aharonovich noted that the tax authority intends to deal with legislation on issues that arise due to the lack of clarity of what constitutes a "family cell" for the purpose of purchasing tax and real estate transfers between family members.

According to Iris Stark, CPA's president, the shocking family unit requires a different mindset of transferring assets to children and the next generation in life. Tax authorities should be partners in and encourage this, and not be treated with suspicion as if they were artificial transactions. The transfer of assets in life prevents tax accidents after 120 and it is quite possible to define that the income from the assets remains with the parents up to 120, while still transferring the property is real and worthwhile. In a situation where there is also a second parity transfer of assets in life financially guarantees the children. "

To the question of Accountant Iris Stark, President of the Institute of Certified Public Accountants, is there any intention to raise the purchase tax or extend the hourly order that raised the purchase tax rate to another 8%, beyond 2020, among other things, to deal with the deficit; "We have been in discussions with the Treasury for a long time, but it depends very much on who sat in the treasury for the weekend, and we do not know at the moment." , "Specifically, there is no intention to raise the purchase tax."

The purchase tax increase to 8 percent was set as part of a directive promoted by Finance Minister Moshe Kahlon, in the context of the fight for housing prices, and an attempt to cool the investors' celebrations in the housing market. The directive expires at the end of 2020. According to Aharonovich, "It was a success in terms of finance. The move managed to cool prices. In the latest index we saw that housing prices are not like in previous years. If we do nothing we return to 5-6% at the end of the year. "Because the hour order ends, then the next government will have to say what its intentions are. If they do not extend the hour order, we may see investors return to apartments."

The panel, led by CPA Iris Stark President of the Institute of Certified Public Accountants and CPA Aryeh Fondak, Chairman of the Tax Committee and Member of the Central Committee, also featured Zilpa Glindus. Senior VP of Enforcement and Collection