Law & Numbers - News Tax


17.05.2011 (France)

Main changes concern : Tax shield, Wealth tax, Inheritance and gift taxes and the Edit tax.

The bill for the private assets tax reform was adopted on May 11th at the Ministers' Council. It will be examined at the Parliament in June.

Main changes :

Tax shield


The tax bracket will start at 1,3 million

Starting 2011, would be submitted to the wealth tax, net taxable estates of at least 1 300 000 euros. The tax return proceedings would be partly simplified (suppression of some schedules annexed to the return) and the calculation of the wealth tax for 2011 would take place following the actual wealth tax schedule. The deadline for the filing and payment of the wealth tax for 2011 would be postponed from June 15th to September 30th 2011.

Starting 2012, the actual wealth tax schedule would be replaced by two rates :

. the taxpayers with net taxable private assets comprised between 1,3 and 3 million euros would be taxed at a rate of 0,25% on the whole of their private assets, with a rebate for estates comprised between 1,3 and 1,4 million euros.

. the taxpayers with net taxable private assets of more than 3 million euros would be taxed at a rate of 0,5% on the whole of their private assets with a rebate for estates comprised between 3 and 3,2 million euros.

The tax basis would not be modified. Art would still be exempted, and the main residence would still benefit from a 30% tax allowance. The conditions regarding the exmption of professionnal assets would however be adjusted. The 25% ownership theshold of company share would be reduced, should the taxpayer's participation find itself diluted following a capital increase.

Inheritance and gift taxes


. The tax rate of the two last brackets applicable to inheritances and donations made to direct ascendants or descendants, as well as donations made between spouses or partners bound by a PACS (with estates between 0,9 and 1,8 million euros and more) would increase by 5%, going from 35% to 40% and from 40% to 45%.

. The decrease of the gift taxes granted according to the age of the donor (for example, the 50% tax rebate applicable to donors under 70 years) would be abolished.

. The tax allowances up to 159 325 per child and per parent would be renewable only every 10 years (for the moment every 6 years).

Exit Tax


. Creation of a 19% exit tax, applicable to capital gains made on the disposal of substantial equities for taxpayers who choose to leave the country.

This list isn't exhaustive. Aside from the reform's key measures, other measures have been adopted, amongst which :

- the simplification of the tax regime applicable to shareholder agreements, called "pactes Dutreil"
- tax on non-residents' secondary residence
- taxation of the goods or benefits as part of a trust to the wealth tax and gratuituous transfer taxes...

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