The section covers

• Rule
• Background
• The 1982 value is communicated in connection with the transfer of a plan

Rule

When a plan was taken out before the end of 1982, a transitional deduction is calculated. The transitional deduction exempts the part of the basis of taxation which concerns savings made before 31 December 1982 from taxation under PAL. See Section 10 of PAL.

This means that tax is only payable on the taxable yield which concerns savings made after 31 December 1982.

The transitional deduction has been fixed as a proportionate reduction of the basis of taxation.

It is a condition for a reduction of the basis of taxation that the plan is effective at the end of the year of taxation.

The purpose of the transitional deduction is to keep the part of the taxable yield which concerns savings made before 31 December 1982 exempt from taxation. The transitional deduction stems from the Danish Act on Tax on Yield of Pension Plan Assets (Realrenteafgiftsloven (RAL)), which was adopted in 1983.

The provision set out in Section 10 of PAL is a continuation of Section 7 of the Danish Pension Investment Return Act. See Consolidation Act no. 1075 of 5 November 2006. The provision has been adapted, however, to the tax liability provisions set out in Section 1 of PAL according to which the tax liability in relation to life insurance and pension fund plans has been transferred from the life insurance company and the pension fund to the individual policyholder or pension fund member. See the comments on Section 10 of PAL in L 10 of 28 November 2007.

When a plan is transferred under Section 41 of PBL, the ceding bank or pension provider must disclose a range of information to the receiving bank or pension provider, including the value of the pension savings at the end of 1982. Please refer to section D.1.6, Disclosure of information etc. in connection with transfers under Section 41 of PBL, for further details on the information to be disclosed.