Equity engineering: What investments to transfer without deprivation?

Break a capitalization contract

If the amounts paid in life insurance before the insured’s age 70 are transferred tax-free up to €152,500 per beneficiary, this is no longer the case for higher amounts (20% tax on the following €700,000, 31.25% beyond) and for premiums paid from the age of 70, subject to inheritance tax (after a global bonus of €30,500). In addition, a life insurance contract cannot be donated, preventing its early and progressive transmission. The capitalization contract, another envelope of financial savings signed with insurance companies, makes it possible to transfer your life, including significant assets, and often with a tax cost of less than 20%. The capitalization contract and life insurance are similar in terms of operation, investment universe (funds in euros, financial and real estate units of account), taxation in the event of withdrawal, but they are separated by a difference in size: inheritance tax . Upon the death of the subscriber, the capitalization contract passes to the heirs as is, with a triple advantage: they keep the investment vehicles, without having to disinvest them at an inopportune moment due to their low liquidity (structured products, private equity) or market disturbances. market, they benefit from the fiscal primacy of the contract in the event of withdrawal and latent capital gains are eliminated.

“Finding the right balance between optimizing streaming and preserving lifestyle”

It is possible to start the transmission while maintaining a source of income by giving bare ownership of the contract. During its life, the beneficial parent receives withdrawal income up to the increments (principal gains and interest) of the contract. At the same time, transmission is optimized: the value of the usufruct is reduced from the tax base, which depends on a scale linked to the age of the usufructuary on the day of the donation. If the donor is between 61 and 71 years old, the tax value of his usufruct is set at 40% of the value of the freehold contract. Using this discount and the applicable €100,000 allowance, a parent can pass €166,000 to each child without any tax, and more than €1,080,000 at a 20% marginal rate. Upon the death of the donor, the usufruct is extinguished and the children of the bare owner automatically receive full ownership of the contract without inheritance tax.

Invest in “paper-rock” through a civil society

To obtain additional income and diversify your assets without worrying about management, acquiring SCPI shares is ideal: they allow you to collect income from the attractive returns of the residential or tertiary real estate market (offices, shops, warehouses, health establishments) pooling risks thanks to the multitude of properties, tenants and geographical sectors. The limit is due to the fiscal burden that weighs on this property income, subject to the progressive income tax scale whose marginal rate is 45%, to which social security contributions are added at the rate of 17, 2%, that is, a global tax rate of 62.2%. Households that are already heavily taxed should therefore avoid this placement directly or through a civil partnership for income tax.

The alternative is that these SCPIs are acquired by a civil society constituted for the occasion, either through funds borrowed from a bank, or through cash contributed by the partners, in capital (subscription of shares) or in a partner current account. (loan from the partner to the company). The option for Corporation Tax (IS) grants reduced tax rates within the company (15% up to a result of €38,120, 25% beyond) and the absence of taxes and social security contributions of its partners while they are not cause the distribution of dividends. place.

Even better, partners can access the company’s cash flow from SCPI income, tax-free for many years, through partial refunds from their partner’s checking account. As it is not a question of distributed dividends but of the repayment of a debt of the company, these liquidities do not constitute taxable income for the partner. Subsequently, the parents can stagger the donations of shares to the children to use the €100,000 subsidy renewed every 15 years, retaining control of the company, through their management powers, and the income if they reserve the usufruct of the shares. Actions. These donations of shares are all the less expensive when the company is highly indebted because the amount of the debts (member’s current account or bank loan) reduces the value of the shares delivered.

Upon the death of the lending partner, any unreimbursed balance in the partner’s checking account is a taxable asset of his or her estate. For this reason, it is advisable to balance from the beginning the amount of the capital contribution and that of the advance in the member’s current account, depending on the income needs and the planned transmission effort.

Diversify your assets through Forest Investment Groups (GFI)

As groups whose objective is the acquisition and exploitation of wood and forests, MFIs benefit, subject to conditions, from a 75% exemption from wealth tax and gift and inheritance tax, limited to the fraction of the value of the shares invested in French forestry. assets. MFIs therefore allow wealth to be diversified and transferred at a lower cost, especially in inheritances with a high marginal tax rate, due to the amount transferred (up to 45% between parents and children) or the degree of kinship (45% between Fathers and sons). brothers and sisters, 55% between uncle/aunt and nephews/nieces, 60% between third parties). For example, the tax is €275,000 on an inheritance of €500,000 between an uncle and his niece. The same amount in GFI shares invested 80% in French forestry assets is transferred with a tax of €99,000, ie a gain of €176,000. If the uncle transfers the bare ownership of the GFI shares to his niece before the age of 81, he retains the GFI returns and the tax is reduced to €69,300, i.e. €205,700 transferred in addition to his heiress, who may during estate, hold or sell these GFI shares to recover cash.

Guillaume Pinelli, Wealth Engineer, Astoria Finance

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