How to devise new tax planning strategies

Modification of the ISF, abandonment of the tax shield, tightening on gifts and estates, tax increases on important life insurance contracts, setting up an Exit Tax : before leaving for recess , deputies and senators adopted the bill amending the taxation of wealth. While some cogitate on new tax planning strategies that will reach their full potential next year, especially for the TFR-there are some decisions to make this year. For the ISF, 2011 was a year of transition.The new tax schedule consists of two slices (0.25% for assets from 1.3 to 3 million euros and 0.5% thereafter) only comes into effect next year. Only assets of less than 1.3 million are exempt this year. Those who exceed this amount are taxed on the basis of the old system: from 800,000 euros with six tax ​​brackets ranging from 0.55 to 1.8%. Statement and check are due September 30. Under these conditions, a heritage display 1.3 million less than the fateful order to escape this year-to-ISF seems tempting. But beware of the sub-rough estimates especially for those who already pay. It is therefore necessary to use other techniques to reduce their taxable assets.

One possibility is to sell its shares and build up a collection of works of art: they are exempt from wealth tax. Alternatively, investment in the woods and forests: it has a 75% reduction in ISF. Quite sophisticated, the dismemberment of property is, more and more popular. This legal mechanism is to make a temporary usufruct donation of a property to a third party and keep the bare ownership. This will leave the property under the ISF.

More conventional capitalization contracts are used to reduce taxable assets to tax on capital.” Unlike a life insurance included in the calculation of the ISF on the basis of its cash value, interest and capital gains included, only the amount of the payments is taken into account for an endowment contract, no gains.Finally, once the tax base reduced, it is possible to reduce the ISF through investment in SMEs either directly or via the FCIC, or FIP . It is better to choose products 100% invested in eligible SMEs to maximize the tax cut.

Tax shield
Although its deletion is programmed, it is possible to play this year as revenue in 2009 and next year for those of 2010. Instead of collecting a check, the recipient must calculate the amount due under the tax shield and deduct from the ISF, a process called “reverse charge”.

Estate and gift
For transmissions in direct line, taxation on the penultimate tranche (from 902,838 to 1,805,677 euros) to 40% and that on the last (more than 1,805,677 euros), 45%. Added to this is the end of the 50% reduction of inheritance tax for donors younger than 70 years. The device is maintained for corporate donations granted in full ownership as part of a pact Dutreil.The period between two donations to provide 159,325 euros in tax-free to his children from six to ten years.

Life insurance
The new provisions are not as severe than expected. Although the new laws put an end to a trick used in recent years by professional tax planning. This was the dismemberment of the beneficiary clause of a contract of life insurance. The technique was to designate the spouse as usufructuary to evade death duties. While children (bare owners) had a claim corresponding to the usufruct consumed by the surviving parent of the second series, which reduced even the tax base.

The holders of these contracts must consider amending this clause beneficiary is no longer the same interest. And taxation of life insurance contracts in excess of 902,838 euros from 20 to 25%. Despite this change, life insurance is a good tool for transmission. For a heritage. 159,325 euros, the cost of an online donation directly to a reduction of 159,325 euros is 252,678 euros. In the case of a contract of life insurance taken out by the same amount a father younger than 70 years in favor of his only son, the tax amounts to 206,565 euros, according to calculations.

Exit Tax
Repealed in 2004 due to incompatibility with the EU tax free, this created five years ago by a Socialist government is back. The goal is the same: prevent people escape the tax on capital gains by transferring their tax residence outside France before the transfer of shares of their company for entrepreneurs. Taxation (31.3%) in total, will be based on unrealized capital gains calculated the day before departure. Taxpayers who migrate to a country outside Europe will have to pay or offer payment guarantees for a reprieve. Retroactive to March 3, 2011, this measure would prove incompatible, according to some jurists, with the tax treaties signed by France, in particular Belgium, mainland migration tax for entrepreneurs