Tax office has doubts Senior citizen bequeaths millions to ex-banker from Aargau - court dispute

Four million francs go into the account of an ex-banker from Aargau. Allegedly a gift - but the tax office has doubts. Now the court decides.

A former banker from the canton of Aargau received almost four million francs from an elderly woman whom he apparently only saw once a year. He declared the sum as a gift - but the tax office doubted this. A years-long legal dispute ensued, now the Supreme Court has ruled.

The story begins in 2016: the man from Aargau filed a voluntary declaration with the tax office and declared untaxed assets. He claims to have received a gift of almost four million francs in 2012 - from an elderly widow who died in 2014, as reported by the "Aargauer Zeitung" newspaper.

However, the tax office only accepts half of the sum as tax-free and demands income tax on the remaining two million francs. The reason given: The man had not been able to provide objective proof that it was indeed a tax-free gift.

Long-standing but rare meetings

The man from Aargau, who worked as a bank employee until 2010, stated that he had maintained a close friendship with the widow for many years. After her husband's death in 1997, contact had intensified - albeit almost exclusively by telephone. The two saw each other in person less than once a year, but they spoke on the phone almost every Sunday.

As early as 2000, the husband received power of attorney over the widow's securities account. He was able to dispose of her assets, carry out banking transactions and withdraw cash. As a rule, he gave her around 100,000 euros in cash every year, which she took across the border herself.

In October 2012, when the widow was 76 years old and seriously ill, she opened a new account and transferred almost four million francs into it. She closed her previous account, which they both had access to. Just a year and a half later, she died at the age of 78.

Tax office doubts the gift

The tax office considers it unlikely that the widow transferred her assets to her husband for no apparent reason. It points to the regular cash transfers, which were not made without consideration. As there was no written evidence or will, the two million francs were subject to income tax.

The man from Aargau lodged an appeal - and argued that the woman had no close relatives and had decided to make the gift because of their long-standing friendship.

However, the High Court rejected his appeal. It followed the tax office's argument that there was insufficient evidence of a tax-free gift. The ruling is therefore legally binding.

For the man from Aargau, this means that he must pay income tax on the two million francs. This case was also important for the state, as it involved several hundred thousand francs in tax revenue.