Taxation of capital gains from the sale of agricultural land

Facts

The married couple [A.A.] and [B.A.] live in [U.] in the municipality of [V.] /AG. [A.A.] was self-employed as a farmer and ceased this activity as of 1 April 2009. The original parcel was parcellated on 21 September 2011 and divided into three partial plots. The 4'326 m² property was sold to [B.] for Fr. 461'880.--. The [A.] couple requested taxation of the capital gain according to § 27 Abs. 4 StA/AG and a separate annual tax according to § 45 Abs. 1 lit. f StA/AG.

The Administrative Court of the Canton of Aargau dismissed the appeal, as the three parcels that emerged from the original parcel in 2011 were not agricultural land according to § 27 Abs. 4 StA/AG. The [A.] couple lodged an appeal and requested the annulment of the judgment and the remittal of the case to the lower court.

Considerations

The Federal Court examined the application of harmonized cantonal tax law and found that the lower court had wrongly classified the three parcels as non-agricultural land. The Federal Court found that the original parcel was suitable for agricultural use until parcellation and that the parcellation and sale of the properties did not violate the provisions of the RLRA.

The Federal Court annulled the judgment of the Administrative Court and remitted the case to the lower court to clarify whether the original parcel had lost its suitability for agricultural use. If the three properties were not suitable for agricultural use at the time of sale and private withdrawal, pursuant to Art. 6 Abs. 1 RLRA, they…