Pension equalization lump sum taxable?
Facts: As part of a notarial divorce agreement, my wife waives her entitlement to pension benefits in the event of retirement or receiving a pension. It has a value of approximately €200,000. In return (as compensation), my wife will receive a share of the common house equivalent to this value, or she will receive the value in cash.
Question 1: Should this compensation be considered as income for my wife and therefore subject to income tax once the process is implemented during the divorce?
Question 2: Are there any tax differences between a cash payment and the transfer of a share of a self-occupied property?
I have found the following information online:
"Compensation payments within the framework of pension equalization (para. 2, 3) are to be taxed as income for the recipient under § 22 number 1c Income Tax Act (EStG), to the extent that the contributions can be deducted as special expenses for the person obliged to make the equalization under § 10 paragraph 1 number 1b EStG."
"The Federal Fiscal Court has also made the taxation of the recipient of equalization payments dependent on whether the payments were made from taxable income by the person obliged to make the equalization. Overall, the tax treatment of payments within the framework of contractual pension equalization is based on a broad correspondence principle between the two parties of the equalization."
