Question 17325 — taxes and duties

Summary

Mr. Patrick Hetzel questions the Minister of Action and Public Accounts on the tax situation of donations in dismemberment of property. At a time when there is much talk about the reform of inheritance tax, a provision of the 2019 finance law worries many wealth management professionals. Indeed, the finance law for 2019 modifies the rules regarding abuse of rights, by creating “a mini abuse of rights”. That is to say a system which allows the tax administration to exclude certain acts by making them unenforceable. It concerns acts of a fictitious nature or those inspired by the sole motive of evading or mitigating the tax charges of the person concerned. In the latter situation, only operations with an exclusively tax purpose were punishable. By extending the abuse of rights to mainly fiscal operations (in addition exclusively fiscal), the law changes paradigm but does not specify what is meant by “primarily fiscal”. As a result, many wealth management professionals have sounded the alarm fearing that this text targets donations in the dismemberment of property. This type of operation, which makes it possible to reduce the inheritance tax by not taxing the usufruct, risked being considered as for “mainly fiscal” and therefore to be concerned by the new definition of abuse of rights. The ministry issued a reassuring press release, specifying that "the tax law itself encourages early transfers of assets between generations because they make it possible to properly prepare successions, particularly of businesses, and because they are a means of facilitating intergenerational solidarity." This being said, even if the ministry's clarification was considered reassuring, some however question the legal value of a simple press release and believe that a clarification in the Official Journal would be welcome. He therefore wishes the press release to be confirmed by a response to this question, which will be published in the Official Journal, so that legally it becomes enforceable against the tax administration.

Machine translation from French. The official text remains authoritative.

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