Replacement of a usufructuary right is not a sale

The redemption of a usufructuary right for consideration is not a disposal transaction that would meet the requirements of a taxable private disposal transaction.

The redemption of a usufructuary right against payment naturally leads to income, but the Münster Fiscal Court is convinced that this is not subject to tax on speculative gains from private sales transactions. It is true that a usufructuary right as a right of use in rem is an independent asset that can be contributed to and withdrawn from business assets. However, if, as in the case in dispute, the usufructuary right was withdrawn from a business asset and later redeemed in return for a one-off payment, this does not constitute a taxable sale. The court correctly determined that a usufructuary right is not transferable according to the express statutory provision. However, a change of legal entity would be the second mandatory requirement for a taxable sale transaction in addition to the payment. Instead, the redemption payment leads to the expiry of the usufructuary right and thus to the final relinquishment of an asset, which constitutes a sale-like transaction not covered by the Income Tax Act.