Optimise your personal tax situation

The tax advantages of holding shares in an Agricultural Land Consortium (or Groupement Foncier Agricole - GFA) are:

1 - Income tax

Farming rents (fermages) are officially land revenue of an agricultural nature.
Charges relating to the acquisition of goods can be deducted (as is the case with loan interest payments).
When faced with low-level revenues, one may generate a land deficit which can then be offset against other positive land revenues.

2 - Wealth tax (ISF)

The value to be declared will be lower than the value invested under certain conditions.
The tax administration generally allows a 40% allowance (30% due on long term lease and then 10% by minority shareholding of a GFA), with the allowance being reduced in a linear fashion as the end of the lease approaches.
However, by virtue of the provisions of article 793-1-4° of the CGI, this value is only taxable up to 25% up to 101,897 Euros (2011), and half above this.

3 - Inheritance tax

In terms of inheritance, the same rules of evaluation apply as for wealth tax (ISF).
Moreover, the shares can be the subject of a settlement or donation with usufruct, in which case specific allowance will be added. In order to do this, however, the shares need to be held for a minimum of two years.

The above is a summary of certain tax considerations for investors domiciled in France. This summary is based upon the Code General des Impôts, judicial decisions, Regulations and rulings in existence on the dates hereof, all of which are subject to change. In making an investment decision, prospective investors must rely on their own examination of the offering, including the merits and risks involved. Prospective investors should not construe the contents of this website as investment, tax or legal advice. Each prospective investor is urged to consult with, and must rely upon the advice of his or her investment, tax and legal advisors with respect to the suitability of an investment in shares.

 


 

 

 

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