Our client was able to rationalize his properties by refinancing professional property assets (rented to a company that he owned and for which he was the head), held through a family-owned SCI whose partners were subjected to rental income tax, while limiting tax on shares.
A retired corporate executive who owned with his children a group of plastic companies.
Our client was the owner of several property assets owned through two SCI (civil societies) and rented to companies of the group.
One of which was subjected to corporate income tax, and for the other one, each partner was individually subjected to income tax.
The project consisted in:
- Estimating financial, fiscal and assets impact of the tenement’s sale from the fiscally transparent civil society to the civil society subjected to corporate income tax.(capacity to fund the operation, consequences on tax-free income for partners, distribution of family-owned property assets between children and parents at the end of the refinancing process, financial and assets relevance of such a refinancing).
- Analyzing the opportunity to fund the operation with bank loan or vendor-credit (comparative analysis of these two financing plans and their consequences for partners).
- Assisting our client through the refinancing process: relationship with the lending bank and the notary public, legal implementation of the refinancing (transfer’s authorization and liquidation of the seller civil society).
Our added value consisted in demonstrating to our client refinancing relevance by comparing net income at the moment and in case of refinancing, and by identifying fund terms for tenement’s part acquisition (partial bank loan and vendor-credit for balance).
Our intervention made it possible for our client to reach expected results:
- Professional property assets streamlining
- Reducing rental income tax for tenement refinanced part
- Saving real estate capital gain recorded for the tenement part held by the transparent civil society (tax exemption benefit after 15-year-ownership before a new tax regime less favorable for taxpayers entered into force).