Facts
The appellants, [A.A.] and [B.A.] , received two capital benefits from tied pension provision (pillar 3a) in 2011, totaling CHF 88,154.95, and used them to amortize mortgage loans on their self-occupied property. However, in December 2011, they increased a mortgage on the same property by CHF 40,000.--, which partially offset the previous amortization.
The tax office of the canton of Solothurn taxed the withdrawals with a special tax on capital benefits from pension provision and made an offset of CHF 40,000.--. The appellants filed a complaint and appeal with the tax court of the canton of Solothurn, which dismissed the remedies.
The appellants requested the Federal Court to overturn the decision of the cantonal tax court and to reassess the taxation for cantonal and direct federal tax 2011, waiving the offset of CHF 40,000.--.
Considerations
The Federal Court examined the application of harmonized cantonal tax law by the cantonal authorities and applied the law ex officio. It found that the lower court had not justified the offset with tax evasion, but had made it in direct application of the tax-motivated norms of pension law.
The court ruled that the amortization of a mortgage for self-used residential property with simultaneous or subsequent increase of another mortgage on the same property cannot be recognized as repayment of mortgage loans within the meaning of Art. 3 para. 3 lit. c OPO 3. The appellants had partially offset the amortization of the mortgage by the subsequent increase of a…