ISF / IFI / Wealth tax, what changes

What's changing with the IFI:


· Tax Plate

o All real estate of the IFI taxable person is included in its taxable wealth (with a 30% rebate on the main residence), as are real estate companies (SCI), civil real estate investment trusts (REITs) ) or real estate collective investment schemes (OPCIs). The rule applies even when these shares are encapsulated in life insurance accounts.
 With respect to the indirect holding of real estate, only the value of the assets of the representative corporation of the taxable immovables is subject to the IFI, without any notion of real estate dominance. It should be noted, however, that taxpayers do not have to take into account indirectly owned real estate when they hold less than 10% of the company's capital (ceiling assessed at the level of the taxable household of the taxpayer).

o Are excluded from the taxable base real estate assigned to the business activity of the taxable person, to a professional furnished rental activity, shares of listed property provided that the subject to the IFI holds less than 5 % of the capital.

· Reporting procedures

o No more specific ISF tax return: taxpayers will have to mention the gross value and the taxable net value of their assets on the IR declaration and then complete the annexes to be attached to this declaration.

· The deduction of 50% of the SME investment is eliminated, as well as the Dutreil pact exemptions and corporate officers.

· Limitation of the deductible liability:

o Until now, the loans in fine made it possible to deduct the entire amount borrowed from the taxable base for the duration of the loan. From now on, the deduction applies as if the loan were ammortiizable.

o Real estate assets over 5 million euros: beyond 60% debt, debts will be retained for only 50% of their values.

o Loans made with the family are not deductible, except debts contracted with a relative who is not part of the tax household within the meaning of the IFI and provided that the taxpayer justifies the normal nature of the loan.

 

What does not change:

· Calendar: the same as that of the ISF - dates are to be confirmed; statement to be made in the spring of 2018 on revenue 2017 / market value on January 1

· Reduction of donations to works

    Tax deduction of 75% of the amount of the donation maintained, up to a reduction of 50 000 € per year (a donation of 66 666 €)

· The tax threshold, set at 1.3 million euros, remains the same, with a discount for assets under 1.4 million

· Scale and cap

o Like the ISF, the IFI is an annual tax. Its scale remains identical to that of the ISF

o The revenue cap is maintained: the tax does not exceed 75% of the total worldwide net income of professional expenses of the previous year

o The tax rate varies between 0.5% and 1.50% with 6 tranches

· Partial exemptions for woods and forests as well as shares of forest groups, agricultural land and agricultural landholding shares under ISF are maintained

· Control procedures remain unchanged
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