EP395 · Economy · first published 2026-07-14
Inheritance tax, option taxation and due process in tax | Janne Juusela | Negotiator 395
Tax lawyer and Doctor of Laws Janne Juusela and Sami Miettinen work through the Orpo government’s tax decisions one by one: what was done well, what was left undone, and why. One principle runs through the hour — ability to pay, meaning tax falls only once money has actually arrived. It explains both the praise (contingent consideration, share exchanges, the reform of option taxation) and the sharpest criticism in the episode: inheritance tax falls due before a single euro has come out of the estate. It closes on due process in tax and on whether Finland needs a constitutional court, where guest and host end up on different sides.
Inheritance tax, option taxation and due process in tax | Janne Juusela | Negotiator 395
Summary: Tax lawyer and Doctor of Laws Janne Juusela and Sami Miettinen work through the Orpo government’s tax decisions one by one: what was done well, what was left undone, and why. One principle runs through the hour — ability to pay, meaning tax falls only once money has actually arrived. It explains both the praise (contingent consideration, share exchanges, the reform of option taxation) and the sharpest criticism in the episode: inheritance tax falls due before a single euro has come out of the estate. It closes on due process in tax and on whether Finland needs a constitutional court, where guest and host end up on different sides.
The guest, and what he is known for
Janne Juusela is a tax lawyer and a Doctor of Laws. He is known for the Juusela model, a proposal for reforming dividend taxation that he drafted in 2014 and that was cited the same year in the book Miten Suomi pelastetaan (“How to save Finland”).
Readers should know this at the outset: the guest is not an outside assessor but a party. He has a model bearing his own name that he would like adopted, and his observations about how taxpayers behave come from his own advisory practice. That makes the observations valuable; it does not make them measurements. This write-up keeps the two apart.
One principle that explains the whole hour
Every piece of praise and every criticism in the episode traces back to the same rule, and it is worth reading before the detail:
Ability to pay. Tax falls only once money has actually reached the taxpayer. Unrealised appreciation is not taxed.
Juusela states it as a professional principle rather than a political demand, and it can be checked against each reform separately: is the principle satisfied or not?
What the government did well
Progression in earned-income tax
The single most important measure, on Juusela’s account, is the cut in the top marginal rate — by his figures from 59 to 52 per cent. He calls it an achievement worth taking your hat off to, and still says the target should be below 50.
He draws a distinction here that matters and that usually disappears in public debate: Finland’s problem is not the taxation of low or middle incomes, which is ordinary by international comparison, but the taxation of additional work at the top rates.
Taxing contingent consideration
Company sales often include an earn-out paid only if conditions are met. Previously a transfer-tax-type charge was levied up front on the whole assumed purchase price, including the part that might never be paid.
After the reform the tax is determined only once it is clear whether the earn-out materialises. Juusela calls it a change that sounds like a small technical fix and nonetheless brings clarity and predictability — and follows ability to pay.
The practical consequence he draws is more interesting than the tax change itself: it encourages structures in which both parties’ interests continue to point the same way after completion, because the seller’s final price depends on how the business then performs.
Share exchanges
Under the old model the cash-consideration limit often forced breaking the chain of ownership: an entrepreneur had to realise, pay capital gains tax, and buy the new shares with a substantially smaller net sum.
There were two changes:
- The cash-consideration limit rose to 50 per cent — calculated on the share’s nominal value, which Juusela notes limits how much difference it makes in practice.
- The scope widened to parties and companies outside the EU.
The principle both serve is rollover: taxation is deferred as long as no cash moves. Sami Miettinen recalls this from his investment banking years, when under the old 10 per cent limit deals had to be computed to the cent to see whether the cash component covered the balancing payments.
The corporate tax cut
The reduction of corporate tax to 18 per cent gets Juusela’s approval, and his reasoning is a transmission channel rather than a position: it steers investment, growth and risk-taking. He adds two qualifications that matter:
- The rate is not the only component. How the base is defined and how it is interpreted decide as much.
- The risk of reversal. He says outright that reversing the cut has been floated in some quarters and that he finds it worrying. That is a prediction about the direction of politics, not an observation.
Reforming option taxation
The clearest illustration of ability to pay in the episode. The old model taxed a share subscribed under an option at the moment of subscription and as earned income — before any money had come out of the shares. The reform moves taxation to the point of sale: the portion accrued up to subscription is taxed as earned income, appreciation after that as capital income.
Miettinen adds a point of his own: the old model penalised exactly the person the incentive is meant to reward — a founder or inventor with no separate cash to pay tax on shares they have not sold.
The sharpest criticism: inheritance tax
Juusela’s verdict on the biggest minus in the government’s tax policy is unambiguous: it did not dare to abolish inheritance and gift tax.
The argument, which is structural
Inheritance tax falls due before any money has come out of the estate. The estate must be inventoried and the tax paid even if the assets are entirely tied up in a business or in property. It is the same ability-to-pay problem that every reform praised in this episode fixed elsewhere — and that was left in place here.
He also raises a consequence that is easy to miss: the person leaving the estate has to plan their own death for tax purposes, and in the case of an unlisted company’s owner both the ownership and the tax land simultaneously on heirs who may understand neither.
The Swedish model
The comparison is checkable: Sweden abolished inheritance and gift tax in 2004. In the Swedish model the transfer does not break the tax chain — the heir continues from the previous owner’s acquisition cost, and tax falls only on disposal, when cash is available.
Juusela attaches a claim about effects: Swedish research, he says, shows the reform increased long-term ownership, company growth and risk-taking. The claim is offered as a research reference without being identified, and is marked here as unverified.
A proposal that appears mid-episode
The most concrete moment in the hour. Miettinen puts forward, live, a compromise he says rests on an idea from Riku Asikainen and that he came up with in a conversation with a chamber of commerce chief executive:
Abolish inheritance tax and replace it with a gift tax of about 1.5 per cent on lifetime transfers to direct heirs.
His reasoning is political rather than legal: the change is small in revenue terms and brings the revenue forward, it is technically minor, and it would still fit inside this parliamentary term even though abolishing inheritance tax outright is politically locked.
Juusela thinks it is a good proposal. Neither offers a calculation of what it would do to revenue — that is the unverified part of the idea.
A claim to mark as professional observation
Juusela says his work shows wealthy individuals and families leaving Finland, and that inheritance and gift tax is in his assessment the single biggest reason for it.
This is the most consequential claim in the episode, and it is a professional observation rather than a statistic. He marks it himself — “I would venture to say”. It is in principle researchable: emigration and its stated reasons can be measured. No measurement is offered in the episode.
A figure also appears on the generational-handover reliefs: a calculation by the family business association putting the scale at around €5.5 billion. The figure has a source, but that source is an interested party.
One place where the public argument turns on itself
The episode notes that abolishing inheritance tax has been opposed publicly on the grounds that abolition would force assets to be sold. Juusela dismantles this in two sentences: nothing would have to be sold because of inheritance tax, since the tax would not exist — and if something is sold, the sale produces the cash with which the capital gains tax is paid.
The argument is logical and easy to check. It is worth taking away regardless of what one thinks of the tax.
Dividend taxation and the Juusela model
Under the current system, dividends from an unlisted company are taxed more lightly up to a return of eight per cent of net assets, subject to a cap. According to Juusela this creates an incentive to inflate net assets — which is precisely what the government’s new provision addresses.
His own position is that the symptom is treated while the cause remains:
The Juusela model: the total tax rate on distributed profit is always the same as the capital income rate — 30 per cent — and all companies are treated alike, listed or not.
The historical background is the avoir fiscal system, in which corporate and shareholder taxation formed a single pipe. The model aims to simulate the same result more simply.
Why has the reform not advanced? Juusela’s explanation is direct: those demanding a neutral model want the total rate where the total rate on listed dividends already sits — clearly above 40 per cent — while his model sits at 30. The reform does not fail on neutrality; it fails on the level. That is the most useful observation in the section, because it explains the deadlock.
International comparison, and inflation
Finland’s top rate on capital income is 34 per cent. Juusela cites a comparison putting it third highest in Europe and possibly in the world. The organisation is named; the specific publication is not.
With it comes an observation that holds arithmetically whatever the rate: capital gains are taxed in nominal terms. On a long-held asset part of the “gain” is inflation, so the real rate exceeds the nominal one — and in the extreme, tax is paid in real terms on an investment that returned nothing or lost money. Miettinen compares this with wages, where inflation adjustments are made regularly.
The tax base, interpretation and due process
This is the episode’s second substantial block, and it lies entirely outside the question of rates.
Juusela’s claim is that the Finnish system’s problem is not only the level but predictability:
- The participation exemption for shares held as fixed assets has been tightened through interpretation and case law to the point where the outcome is effectively binary: full exemption or full tax. The dividing line rests on concepts whose content is unclear, and the price of that uncertainty is paid in structures that end up benefiting nobody.
- The general anti-avoidance rule is, he argues, applied disproportionately widely, producing uncertainty and disputes.
- The burden of proof reverses in practice. Whatever the statute says, the prevailing practice on his account is that an unclear situation resolves against the taxpayer.
- Advance rulings therefore matter more — but they have become harder to obtain, and the administrative court stage runs one to two years or longer.
A recent think-tank report on due process in tax is cited in support. The report exists as a source, but its conclusions are not set out in the episode.
A constitutional court — where host and guest disagree
The best exchange in the episode, because neither gives way.
Juusela’s position: Finland lacks effective ex post review of fundamental rights. Ex ante scrutiny during legislation exists and matters, but in an individual taxpayer’s case the interpretation is done on technical provisions without proportionality and property protection carrying real weight. He calls this an institutional problem rather than a problem of individual decisions — which is the strongest part of the argument, because it does not depend on whether any particular ruling was right.
Miettinen’s objection: he says he supported the idea for a long time and then changed his mind. The objection is the risk of politicisation: the court is staffed by appointment, and the outcome depends on who sits there. He illustrates it with his own example — such a court could equally well end up defending an arrangement he himself considers unconstitutional.
Juusela’s answer is what makes the exchange worth reading: no institution guarantees correct outcomes, and every system produces bad individual rulings. The question is whether the control exists at all, or whether its application is a matter of chance.
The disagreement is left open.
Two side-paths in the same stretch should be marked as observations rather than claims: an example from a listed-company redemption dispute in which the redemption price differed from the price in the main transaction, and arbitration in commercial disputes — credited with speed, confidentiality and a specialist decision-maker, and charged with building binding practice outside public view.
To which Miettinen adds a broader point: commercial specialisation in Finland is concentrated in the private sector, whereas in some countries the equivalent expertise sits on the bench.
AI in a lawyer’s work
The closing stretch, and it contains three observations that are descriptions of the present rather than forecasts.
- The starting point was already good. Legal sources — statute, case law, commentary — have been searchable since before AI. Juusela makes the point himself, which reduces the size of the change being expected.
- The tools work; the supervision has not gone away. He describes trying an agent-based tool that marks up legal documents, and says plainly that he would not let an important document out without a lawyer’s eye — because the tool’s assumptions are invisible and the relationship between sources can be got wrong.
- The value of deep expertise rises rather than falls. The reasoning is operational: using the tool requires steering it and checking its output, and both require the overview the tool does not supply.
And finally the episode’s most original observation, one that is rarely made: AI lowers the cost of producing legal work, which makes it worth pursuing claims that were previously too improbable to pursue. The consequence is both more disputes and unnecessarily voluminous material that the other side has to process — so AI sometimes produces net additional work rather than less.
Claims presented as claims
- The assessment that inheritance and gift tax is the single biggest reason wealthy people leave (a professional observation, not a measurement).
- The research reference on the effects of the Swedish reform (source not identified).
- Finland’s international ranking on capital income tax (the organisation is named, the publication is not).
- The revenue effect of a 1.5 per cent gift tax (no calculation offered).
- The suggestion that the corporate tax cut may be reversed (a prediction).
- The scale of the generational-handover reliefs (one interest group’s calculation).
What survives the episode
- Ability to pay is a single test that works across the whole tax system. For every reform you can ask the same question: does the tax fall before or after the money arrived?
- The problem with inheritance tax is timing, not level — and the argument that abolition would force sales turns on itself, because without the tax there is no compulsion to sell.
- Dividend tax reform fails on the level, not on neutrality. That explains why everyone favours a simpler model and nothing moves.
- Alongside the rate there is a second variable: predictability. An open-ended tax base costs companies whatever the percentage happens to be.
- AI can increase legal work rather than reduce it — because cheaper law makes it worth pursuing matters that were not worth pursuing before.
How the episode runs
- 00:00 — The guest: tax lawyer Janne Juusela
- 01:10 — An overall verdict on the government’s tax decisions
- 02:11 — The top marginal rate fell from 59 to 52 per cent
- 03:06 — Transfer tax and the taxation of contingent consideration
- 04:36 — Earn-outs and sharing risk in company sales
- 06:09 — Share exchanges and the cash-consideration limit
- 07:50 — The anti-avoidance provision and inflating net assets
- 10:21 — Ability to pay as the cornerstone of taxation
- 11:04 — Dividend taxation in unlisted companies
- 13:22 — The Juusela model: a 30 per cent total rate
- 14:53 — Capital income tax and inflation in international comparison
- 16:34 — Sweden abolished inheritance tax in 2004
- 17:45 — The government’s biggest minus was keeping inheritance tax
- 18:19 — A 1.5 per cent gift tax, from Riku Asikainen’s idea
- 19:43 — The ability-to-pay problem with inheritance tax in practice
- 21:34 — Wealthy families leaving Finland over inheritance tax
- 24:33 — Generational handovers and the limits of the reliefs
- 26:47 — Corporate tax falls to 18 per cent
- 28:18 — Problems with the participation exemption
- 29:13 — The general anti-avoidance rule and predictability
- 31:11 — Option taxation reformed: tax only on sale
- 35:20 — Pension contributions and estimated assessment
- 36:10 — Due process in tax, and a think tank’s report
- 38:33 — Redemption disputes and the odd case of a golf share
- 40:14 — Case law and the role of precedent
- 43:01 — Does Finland need a constitutional court?
- 46:19 — Fundamental rights and property protection in tax
- 48:58 — Arbitration in commercial disputes
- 52:52 — AI is changing a lawyer’s work
- 57:04 — Legal spam in the age of AI
- 59:25 — Closing words