Guidance for the gift declaration form

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1 Guidance for the gift declaration form The gift declaration form (RF-1616) must be submitted within one month of the assets being given or transferred. Both the donor and the recipient are responsible for ensuring that the declaration is submitted punctually and both parties must sign the declaration. Further information can be found at Remarks concerning the individual items in the gift declaration form. 1. Personal information The gift was given by Divorced donors must insert a cross in the box for unmarried donor. If separated donors wish to distribute assets from a joint estate, both spouses must sign the gift declaration form. In the case of partial division, e.g. division with the children from a previous marriage of the deceased, a cross must be inserted in the box for undivided estate. An undivided estate means that the assets of the first deceased have not been divided but taken over by the surviving spouse/cohabitant. Distribution from an undivided estate to a living heir or heir under a will is deemed to originate from a spouse/cohabitant in accordance with Section 7(2) of the Inheritance Tax Act. In the case of distribution from an undivided estate to a person who is only an heir to the first deceased (e.g. the child of a previous marriage, or parents if the deceased was childless), the general rule is that the assets are considered to originate from the deceased. If the distribution exceeds the deceased s share in the undivided estate, the remainder will be deemed a gift from the survivor. It must be documented how much of the deceased s share has been exceeded (e.g. by submitting the tax return for the most recent income year). In the case of the division of an undivided estate of a cohabitant, a copy of Request for right of survivorship certificate from surviving cohabitant (GA-5340) must be enclosed. Two persons who live together, have joint children and/or have previously been married are deemed cohabitants. Two unmarried persons who live and have lived together in a marriage- or partner-like relationship for at least two consecutive years are also deemed cohabitants Previous gifts You must submit a separate gift declaration for gifts that have not been declared previously. Gifts given within the annual taxfree amount do not need to be declared and should not be included. See also item 7.2 and the following in the guidance. 1.3 The recipient's name One declaration must be submitted for each recipient. One declaration must be submitted for each recipient. If the recipient is married and the gift has been given to both, two declarations must be submitted, on which the persons concerned are stated as the recipient of their respective share of the gift Relationship Adoptive relationships come under the term relationship. It is not necessary to state that the recipient is an adopted child. It is sufficient just to write child. Children, including step children, who have actually been fostered by the donor, are deemed to be foster children Relationship Any relationship between the cohabitant/spouse of the person giving the gift and the spouse/cohabitant of the person receiving the gift must be declared here. If these persons are related, the gift will be subject to inheritance tax even if the donor and the recipient are not related. See Section 2 of the Inheritance Tax Act. 1.5 When the gift was given A gift is deemed to have been given when the donor has largely or entirely placed the assets at the disposal of the recipient. It is important that a specific gift date is set. This date is for example important as regards the rates and tax-free amount that will be used when determining the inheritance tax. If it is difficult to determine a specific date, it may be necessary to provide supplementary information to the tax office. If there is insufficient space in item 5, Special information, use a separate sheet. 2 Specification and value of the distributed assets It is the estimated sales value when the gift was given that must be declared. The exceptions are referred to under the individual items. 2.1 Real property Real property must be declared with the estimated market value at the time the gift was given. The full value must be entered even if a property has a reduced value because of a usufruct or similar. Deductions for the usufruct must be entered under item 3.4. If a full or partial fee for the property is agreed, it must be RF-1617E Approv

2 entered at the full value, while the fee is entered as a deduction under item 3.3. If the property has not been valued in connection with the gift transfer, an information form for real property must be completed. The following forms are available at Information form for residential property/plot (RF-1618) Information form for holiday property/plot (RF-1619) Information form for other real property/plot (RF-1620) When real property that is covered by an immediate heir s right to retain possession of a paternal farm (agricultural and forestry property) is transferred to the donor s relative in direct line of descent, the property must be declared in the amount of three-quarters of the estimated sale value. If in connection with the division of an undivided estate, such a property is transferred to a relative of the first deceased spouse in a direct line of descent in accordance with the official valuation of the property of the decent estate, the full valuation amount must be declared. For a gift from the same donor, a gift recipient may not claim a valuation in accordance with these rules for more than one property or the shares he receives in a single property, i.e. a farm which has been run as a single operational entity. Important information The value which was used as a basis for the inheritance tax calculation will determine the initial value in connection with the taxable gain from any subsequent sale. The initial value cannot be set higher than the value that was assumed in the inheritance tax calculation. More information on how the gain is calculated can be found at under the rules concerning property purchases and sales. 2.4 Shares and unit trusts, etc. In the event of the transfer of stocks and shares, the recipient may be entitled to a deduction for any future tax gains in connection with the sale of such stocks and shares; see Section 14(5) of the Inheritance Tax Act. This applies to the transfer of listed and non-listed shares, shares in unit trusts, partnerships, savings banks and other self-owning financing enterprises, mutual insurance companies, cooperative enterprises and corresponding foreign companies. Form RF-1624 should therefore be used. This form is available at The total net value is transferred from item 5 in form RF-1624B to item 2.4 in the gift declaration form. 2.5 Collective investment funds, etc. Here, you should list shares in collective investment funds (not unit trusts), bonds and other securities which are not covered by Section 14(5) of the Inheritance Tax Act (see item 2.4 concerning who is covered). 2.6 Life assurance and annuity agreements Sums insured which under the agreement with the company are due for payment at the time the gift is given must be entered in the amount paid by the insurance company. If a life assurance policy is given as a gift before it falls due for payment, the surrender value must be declared. Enclose a statement of the surrender value from the insurance company. Annuities that have begun to run should be declared at the capital value of the annual payments that will be made from the time the gift is given. The capital value of the annuity, determined in accordance with Section 13 of the Inheritance Tax Act, may be declared, but this is not necessary. The tax office will in any case calculate the capital value on the basis of the information provided. Annuities that may be surrendered but which have not fallen due for payment when the gift is given must be set as equal to the surrender value. In addition, you must also state the value of any accrued free policies at the time the gift is given. Enclose statements of the surrender value and any free policies from the company. If you would like to find out more about this, you can read the chapter on insurance payments in the handbook for inheritance tax, which you can find at Interest-free or low-cost loans, surrender and obsolescence If a loan from a donor to a recipient has not been interestbearing or if agreed interest has been lower than the interest that would apply to an interest-free loan in an employment relationship, this is considered to be a gift/benefit which must be included in the basis for the tax. This interest corresponds to the standard interest rate and is determined by the Ministry of Finance for a period of two calendar months at a time. The interest rate is announced at under tables and rates. Information can also be obtained from the tax information helpline. The value of the gift/benefit will be determined by the tax office. The tax office takes into consideration the tax savings that the borrower would have made had he paid the standard interest rate and been able to claim a deduction against income tax. This will be deducted from the basis for the inheritance tax. See for information on the standard interest rate. NB: If the loan has been surrendered in part or in full, the surrendered amount must be entered in the right-hand column. The same applies if the loan has become obsolescent. If this only concerns an interest-free or low-cost loan, only the fields in item to inclusive must be completed, not the field in the right-hand column. If interest has accrued on the surrendered amount which has not been paid, this amount must be entered in item Page 2 of 5

3 2.8 Motor vehicles Cars, motorcycles, snowscooters, mopeds, motorised quadricycles and mobile homes must be declared under this item. These assets must be valued at list price as new, minus a standard deduction to take account of age. The deduction is calculated as a percentage and follows the table below. Age of vehicle Proportion of list price as new Year 0 (new) 75% Year 1 65% Year 2 55% Year 3 45% Year 4 40% Year 5 30% Year 6 20% Year 7 Year 15 15% Vehicle list prices can be found at Outstanding claims and other benefits Mortgage bonds and other outstanding claims (receivables) that are given as a gift must be valued at face value, unless it is documented that the estimated sale value is lower. Examples of other benefits are interior furnishings such as art, antiques and other movables and other movables, ships and other vessels, boats, nets, seine and longline fishing equipment and other fishing equipment, movables, etc. in trade, industrial and craftwork businesses, income benefits and expenses in connection with the transfer that are paid by the donor. These should be specified on a separate sheet. If works of art or antiques have been valued, a copy of the valuation must be enclosed. Valuation of stock Stock must be valued at its acquisition or manufacturing price upon acquisition. Goods which as a result of damage, obsolescence or similar must be sold at a reduced price must be valued at their estimated sale price minus a deduction for sales costs. Enclose a statement of the status and profit/loss account as of 1 January in the gift year (and at the time the gift was given if the accounts have been closed by that date). The tax office will notify you if additional information must be provided. If a written agreement concerning the transfer of the business (or a share therein) has been established, a copy of the agreement must be enclosed. 3 Deductions from the value of distributed assets The recipient may claim deductions from the tax basis for: a) obligations that are incumbent on the donor as a condition for the gift, and b) costs that are necessary in order for the recipient to come into possession of the assets. Deductions for the obligation may only be claimed when it is unconditional or when it has been documented that the obligation has been fulfilled. If the tax office considers it unlikely that the obligation will be fulfilled, the deduction may be refused; see Section 16 of the Inheritance Tax Act. Deductions in accordance with Section 14(5) of the Inheritance Tax Act for gains subject to a latent tax obligation in connection with the transfer of assets covered by the shareholder and partner model should be declared in form RF You will find more information concerning deductions at and the deductions chapter of the handbook on inheritance tax. 3.2 Mortgage bonds or promissory notes Deductions are given for the debt obligation that is established between a donor and a recipient in connection with the transfer of the gift. Any interest received by the recipient must be entered in item Cash fees Any cash fees paid by the recipient must be entered under item 3.3. Fees that have not yet been paid must be entered under item 3.2. Documentation of fees paid in cash must be enclosed with the gift declaration. 3.4 Income benefits Income benefits that the donor has reserved for himself or others may be claimed as a deduction in accordance with the provisions of Section 15 of the Inheritance Tax Act; see Section 13. Examples of income benefits are residential rights or usufructs, annuities, ongoing capital returns and basic charges. In connection with the assessment of income, the recipient will only be able to claim a deduction for the payment of income benefits in cash, e.g. a pension to the donor. Any deduction from the tax basis will limit the deduction that may be made when the tax is determined correspondingly. More information concerning residential rights or usufruct relating to real property If the donor has reserved a usufruct or residential right concerning real property in connection with the transfer of the property, it is important that this is declared in the information form for valuation of property. A deduction is given for the donor s usufruct concerning a holiday property when the usufruct does not exceed four weeks per year. If the donor s usufruct exceeds four weeks, the ownership is not normally considered to have been transferred to the recipient in connection with the determination of the inheritance tax. In connection with the transfer of ordinary residential property a deduction may be given for the donor's usufruct if it Page 3 of 5

4 encompasses more than half of the residential area. The donor s residential right must normally be clearly defined with respect to the part of the dwelling used by the recipient and should cover all the interior fittings that are normally necessary in order to use the area as a permanent residence. If the usufruct or residential right is too comprehensive, the gift may not be considered as having been given for the purposes of inheritance tax. The tax office will then defer the calculation of tax until the right of disposal over the assets has been transferred to the recipient. The right of disposal is deemed to have been transferred either upon cessation of the usufruct or upon waiving of the usufruct. If he so wishes, the recipient may nevertheless choose to have the tax calculated at the time the gift is given, but without any deduction for the usufruct. 3.5 Transfer costs If the recipient pays the costs attributable to the gift transfer, this must be entered under this item as a deduction. If the donor pays these costs, this will be considered as an additional gift and must then be entered under item In accordance with Section 20 of the Inheritance Tax Act, revenue stamps that an heir or gift recipient pays on commercial property may be deducted from the inheritance tax. Commercial property means a property that is being used for commercial purposes at the time of the transfer. If the property is partly being used for commercial activity and partly for private purposes, the deduction will be reduced proportionately. It is the taxpayer himself who must submit a claim for a deduction in accordance with Section 20. NB: The amount must not be entered in the form. Enclose the documentation on a separate sheet. 3.6 Other deductions Other deductions may for example be lawyer's fees, expenses for valuation, etc. 3.7 The annual tax-free amount With certain exceptions, the annual tax-free amount can be used as a deduction from the basis for inheritance tax. The donor and recipient have a choice here and can decide for themselves what proportion of the annual tax-free amount should be entered as a deduction in the gift declaration. The excess amount is then treated in accordance with the general tax rules. Read more about the annual tax-free amount and the exceptions that apply in item 7. 6 Signatures The declaration obligation is personal and both the donor and the recipient must sign the gift declaration. If an authorised representative is used who is not a lawyer, a power of attorney must be enclosed. If the donor or recipient is a minor, the guardian must sign as authorised representative. 7. General information 7.1 What is a taxable gift? Only gifts between certain persons trigger an obligation to pay inheritance tax. If the donor is related to the recipient, the gift will generally be considered as taxable. A gift is defined as any financial benefit that the recipient gains through the gift transfer. For example, benefits may be gained through obsolescence or the surrender of debt, purchases, exchanges, rental or loans or other agreements where the recipient has not paid the full fee. If the donor is to have a usufruct after the transfer, this must still be declared to the tax office. 7.2 Gifts that are exempt from inheritance tax You do not need to notify the tax office of gifts that are exempt from inheritance tax. The gifts that are exempt are listed below in items 7.3 to 7.6 inclusive. The statutory provisions can be found in Section 4 of the Inheritance Tax Act. You can also obtain further information at under the inheritance and gift pages. 7.3 The annual tax-free amount Gifts of up to half of the National Insurance scheme s basic amount (G) at the start of the year are exempt from inheritance tax. The maximum amount applies per donor for each recipient. It is a condition that the gift is given before the death of the donor. If the annual tax-free amount for one year has been fully utilised through gift transactions early in the year, all subsequent gifts must be declared to the tax office. The annual tax-free amount does not cover gifts in the form of: Real property Assets that are valued in accordance with Section 11A of the Inheritance Tax Act (non-listed stocks and shares in trading companies and limited partnerships, as well as other securities which are not listed on a stock exchange) Insurance policies and the payment of insurance premiums 7.4 Periodic payments for fostering or education Periodic payments for fostering or education, maintenance in the donor s home and payments for essential maintenance are exempt from inheritance tax provided that the assets are used before the death of the donor. Support for education may be given within the rates used by the Norwegian State Educational Loan Fund for education. 7.5 Gifts to spouses Gifts to spouses and certain cohabitants are exempt from inheritance tax. See item concerning which cohabitants are covered by the exemption. Page 4 of 5

5 7.6 Non-profit purposes Gifts to non-profit organisations/foundations are exempt from inheritance tax. 7.7 Calculation of inheritance tax Inheritance tax amounts to a certain percentage of what you receive in inheritance or as a gift. What you receive as a gift forms the basis for the inheritance tax. In order to determine the basis for the inheritance tax, the value of the assets concerned must be investigated and determined. The circumstances which give entitlement to deductions from the gross value of the gift must then be established. When the net value has been determined in this way and the tax-free amount has also been deducted, the tax is calculated in accordance with the rates that apply. If you have previously received a gift from the same donor or testator, you must be aware that you will not be entitled to another tax-free amount for the most recent gift and that all gifts are viewed collectively and inheritance tax is calculated on the basis of this. When the tax is calculated, the new gift is added to the old gift. Read more about this at under the inheritance and gift pages. 7.8 Payment of inheritance tax Inheritance tax falls due for payment three months after the gift was given, but no earlier than one month after the provisional or final decision has been sent to the taxpayer. If the tax is not paid by the relevant deadline, penalty interest will be payable. Interest may also accrue when the declaration obligation is not fulfilled, e.g. through failure to submit a gift declaration, with the result that the inheritance tax demand is not paid until after the ordinary payment deadline of three months. Unless agreed otherwise, it is the recipient of the assets that is obliged to pay the inheritance tax. A donor or survivor who distributes assets from an undivided estate is nevertheless jointly and severally liable with respect to the tax authority. The collection authority may demand that the tax be paid by the recipient first. 7.9 Instalment scheme for generational succession in family-owned enterprises In order to ease the liquidity problems that can arise when a family business is transferred to a new owner generation, the recipient is in some cases entitled to participate in an interestfree instalment scheme over a period of twelve years. Requests to participate in this scheme must be submitted to the tax office as soon as possible. In order to avoid payment default, such requests must be submitted before the due date. Even if the transfer falls outside the instalment-free scheme, the recipient may in certain cases still be entitled to be covered by an instalment scheme which is not interest-free. In order to avoid payment default, such applications must be submitted before the due date. Postal addresses for the regions Postal address P O Box 2060 N-6402 Molde P O Box 2412 N-3104 Tønsberg P O Box 9200, Grønland N-0134 Oslo Applies to Nord-Trøndelag, Sør-Trøndelag, Møre og Romsdal, Sogn og Fjordane, Hordaland, Rogaland, Finnmark, Troms and Nordland Vest-Agder, Aust- Agder, Telemark, Vestfold and Buskerud Oslo, Akershus, Østfold, Hedmark and Oppland Page 5 of 5

Helgeland Boligkreditt AS cover pool data

Helgeland Boligkreditt AS cover pool data Report date: 30.06.2017 Report currency: NOK 1. General cover pool information 1.1. Key chatacteristics Total cover pool, nominal balance 6.225.039.754 Nominal