People with savings up to €100,000 to pay less tax

tax envelopePeople with savings of up to €100,000 are to pay less tax on them than people with large amounts of private capital, the Financieele Dagblad says on Friday.

The paper says VVD ministers have agreed to change the way the tax on assets is calculated in exchange for allowing people to give more of their money to family members tax free.

The plans are due to be formally presented at the national budget next month.

The tax-free savings allowance will rise by €4,000 to €25,000, sources have told the paper. The basic tax rate will remain 30% but the interest rate that assets are assumed to generate will go down from 4% to 2.9%, the paper says. The rate will fluctuate with actual interest rate developments.

That rate will apply on assets of up to €100,000. Those with assets of between €100,000 and €1m will pay tax based on a return of 4.7% which will also fluctuate and those with higher assets, a fixed rate of 5.5%.

The paper says the VVD has agreed to the interest rate changes in return for Labour acceptance of a €100,000 tax-free gift system. This will allow parents to give their children up to €100,000 without them having to pay tax.

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