Box 3 concerns your capital. This is the value of your assets minus the value of your liabilities. Assets may include savings, investments and valuable objects. Some assets are exempt or fall into a different box, e.g. your owner-occupied property that is your principal residence, or your shares that are part of a substantial interest. In general, liabilities that were not assumed for the purchase, maintenance or improvement of an owner-occupied property can be deducted from the capital in Box 3.
Examples of assets:
- properties that are not your principal residence, such as a second home or a building let out;
- shares and other securities, provided that these do not fall in Box 2;
- annuity insurance for which the premium cannot be deducted;
- capital sum insurance that is not linked to the owner-occupied property;
Examples of liabilities:
- personal loans;
- continuous credit, or a mortgage not used towards the owner-occupied property that is your principal residence;
In respect of liabilities, a threshold applies. The first € 2,800 in liabilities is not deductible from the capital in Box 3. For partners, this threshold is € 5,600. Certain assets and liabilities are disregarded for the purpose of Box 3. For more information, please refer to Assets and liabilities not falling in Box 3.
All taxpayers are entitled to a tax-free allowance in Box 3. This is a fixed amount that is exempt from taxation. The tax-free allowance is € 21,139 per taxpayer. In addition, the following rules apply:
- If your capital does not exceed € 21,139, it will be entirely free of tax;
- If you are 65 or older, the tax-free allowance may be increased by the elderly person’s allowance;
- If your capital exceeds the tax-free allowance, only the part in excess of the exemption will be taken into account in calculating the tax in Box 3;
Calculation of tax
The capital that does not fall within an exemption is the basis for the calculation of the income from savings and investments (Box 3). If you have a partner, you can apportion the capital between you at your own discretion (see Partners). The capital is determined twice a year: on 1 January and on 31 December. A notional yield of 4 per cent is calculated on the capital on the 1 January in a year minus the tax-free allowance (the so-called capital yield tax base): the income from capital assets. This income is taxed at a rate of 30 per cent.
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