Taxation of latent tax substrate in intercantonal replacement acquisition

Facts

The spouses [X.] were owners of a property in [D.] /NW, which served them as a permanently and exclusively self-used residential property. On January 3, 2001, they sold the property and realized a taxable real estate gain of CHF 410,500.--. The canton of Nidwalden set a replacement acquisition share of 74 percent of the sale proceeds and deferred taxation of the amount of CHF 303,800.--. In 2010, the spouses [X.] sold their condominium in [C.] /LU and realized a gain of CHF 386,940.--. The municipality of [C.] /LU assessed the real estate gain and took into account the latent tax substrate of CHF 303,800.--. The spouses [X.] lodged an objection and appeal, which were unsuccessful.

The Federal Court has to deal with the appeal against the decision of the Administrative Court of the canton of LU from February 23, 2012. The taxpayers request that it be established that the statutory period for making the replacement acquisition was observed, and that the judgment of the Administrative Court of the canton of LU and the assessment decision of the Cantonal Tax Office of Nidwalden of July 14, 2011, be annulled.

Considerations

The Federal Court examines its jurisdiction and the admissibility of the appeal ex officio. It finds that the appeal against the decision of the Administrative Court of the canton of LU from February 23, 2012, is admissible.

The Federal Court addresses the question of whether another case of anticipated replacement acquisition is present, and, if this is not the case, which canton is competent to tax the partial gain of CHF 303,800.--, which was deferred by decision of June 5, 2001, in the canton of Nidwalden. It finds that the mutual claim of the latent tax substrate by the municipality of LU and the canton of Nidwalden constitutes current double taxation within the meaning of the Federal Court's case law on Art. 127 para. 3 Cst.

The Federal Court discusses the methodological question and finds that the question of tax sovereignty to capture value increases subject to intercantonal replacement acquisition…