The 2019 Finance Act introduced a new form of “mainly” tax abuse. By the time it comes into force in 2020, taxpayers and their councils will have to navigate by sight in the murky waters of the Tax Code!
The Finance Act for 2019 introduced a new form of abuse of tax law, the abuse of tax law on mainly tax grounds (L. 2018-1317, 28 Dec. 2018, Article 109).
The tax administration has the possibility “to exclude, as not being opposable against it, the acts which, seeking the benefit of a literal application of the texts or of decisions against the objectives pursued by their authors, have for motive principal to avoid or mitigate the tax burden that the person concerned, if these acts had not been made or realized, would normally be borne in view of his actual situation or activities “(LPF, new section L. 64 A).
“Donating property to his children could, in the future, be considered an abuse of law by the tax administration,” responded immediately Bernard Monassier, president of BM Family Office, in a chronicle entitled ” The donation of real estate in the viseur of the fisc? On his blog bmfamilyoffice.blogspot.com. An analysis that has been associated with the Circle of Tax Professionals.
Dean Jean Aulagnier also reacted by calling on Bénédicte Peyrol, rapporteur for this reform. This one declared itself very surprised, in a personal email, by this interpretation. “I confess to having fallen from my chair when I saw the notaries stand up against this amendment without taking any step back from the object of the fight against tax evasion, without any deep legal argument, if it ‘is to defend the well-known scheme of separation usufruct / naked property,’ comments the parliamentarian.
“In any case I did not aim at this type of scheme. It seems to me that if the taxpayer demonstrates that the objective is to organize the estate and simplify the management of the estate, then taxation is only an accessory, “she explains.
In our opinion, obviously remains the way the administration will interpret this text which requires the taxpayer, as Ms. Peyrol writes, to demonstrate that the objective is to organize his estate more than to reduce the taxation of it ! Between fiscal, economic and family considerations … it is easy to imagine how well the notaries, lawyers and wealth management advisors will be required to determine the purpose of the act in a declaration of intent clause and thus avoid that the administration estimates that the motivation is more than 50% tax! Admittedly the abuse of rights committee could be seized to protect the taxpayer but this text creates a fragility in the effectiveness of the act and places a heavy responsibility on its editor.
Dean Aulagnier, founder of Aurep, just asked Senator Claude Malhuret to question the Minister of Budget, Gérarld Darmanin, on the consequences of this new provision of art. 109 of the Finance Law. “When and how can we know that an act is” mainly “motivated by tax considerations? “, he asks.
At the very least, and without waiting for the application of this provision to acts carried out from 1 January 2020, he would like to confirm that, as many practitioners (notaries, wealth management advisers) believe, any donation containing a reserve usufruct for the benefit of the donor – a reserve which contributes to the reduction of the tax base – does not constitute an act primarily motivated by tax considerations.
Similarly, for an operation of bringing bare ownership to a civil society formed by the donor followed by the donation of full ownership shares to his children. investissement défiscalisant
It should also be asked whether this reform, which is not subject to the control of the Constitutional Council (!), Does or does not violate the Constitution because “this notion of mainly fiscal motive is a notion with variable geometry”, emphasizes Professor Frédéric Douet (he dedicated to it in the February issue of Wealth Management). The Constitutional objective of accessibility and intelligibility of the law requires the legislator to adopt sufficiently precise provisions and unambiguous formulas to protect the legal subjects against an interpretation contrary to the Constitution or against the risk of arbitrary, without referring to administrative or jurisdictional authorities the task of setting rules whose determination has been entrusted by the Constitution only to the law (Cons Const., 29 Dec. 2013, No. 2013-685 DC , § 112). comment défiscaliser en immobilier
It is therefore possible, concludes the professor of taxation at the University of Rouen, to argue that the abuse of law for mainly tax reasons is contrary to the principle of legality of the offenses insofar as its vagueness exposes the taxpayers to heavy penalties pecuniary.