Taxation of an Scpi: How Does It Work?
Real estate is a field of activity that is very promoter. To better invest in this sector, many people choose to buy shares in Civil Real Estate Investment Companies (SCPI).
If you also wish to do so, you should know that like most sources of income, those distributed by SCPIs are taxed. Thus, to better understand the functioning of an SCPI, you must have a good understanding of its taxation. So how does it work?
TAXATION ON PROPERTY INCOME
In accordance with the legislation in force, each SCPI has the duty to transfer to each of its members the income or the products of the rental . The amount of this share is of course based on the contribution of the member who will receive it. In fact, if the beneficiary of this share is a natural person and is subject to income tax, this sum received will therefore also be taxed. So to speak, this taxation will be exactly applied by following the principle of taxation of property income.
However, it should be noted here that the amount that will be deducted depends on the overall amount of taxable income that this person will receive. Thus, if your gross land income does not exceed 15,000 euros/year (micro-land regime), you will see a reduction of 30% on your income.
Otherwise, that is to say that if your gross income is greater than 15,000 euros/year (actual regime), the beneficiary will then depend on the actual tax regime. This gives him the possibility of subtracting from his taxable property income some expenses having been used for the maintenance of buildings held by his SCPI.
These charges include: management fees, expenses incurred to improve the appearance of professional offices, insurance premiums, etc. However, it is important to emphasize here that this deductible amount cannot exceed 10,700 euros.
TAXATION ON CAPITAL GAINS ON THE RESALE OF SCPI SHARES
When a member of a Real Estate Investment Company decides to sell its shares, the profits made by this operation will be subject to capital gains tax . A rule that does not only apply to individuals. Indeed, even companies that are members of an SCPI will also be subject to this tax if they decide to sell one of their properties or one of their shares.
However, to maintain the traceability of the taxation of an SCPI Company, this financial maneuver is carried out in the two which will be presented below.
IN THE EVENT OF TRANSFER OF SHARES
In the event of the sale of shares, the tributary will be subject to capital gains tax if he acquired his assets less than 22 years ago. Moreover, if this transfer takes place before 30 years of ownership, the taxpayer will also be subject to income on the social security levy tax.
Thus, when a transfer of shares takes place after the durations mentioned above, the dependent person will have to pay an exemption which will be linked to the two forms of tax mentioned above. Logically, before carrying out such an operation, you must prepare yourself well.
IN THE EVENT OF TRANSFER OF BUILDINGS
When it comes to the sale of buildings, the profits from this operation will be taxed according to the principle of capital gains on real estate . With regard to the calculation of the amounts to be withdrawn, it will be identical to that which will be carried out within the framework of a transfer of shares. This will involve taking into account all the taxes to which the taxpayer will be subject.
IN THE EVENT OF DISPOSAL OF FINANCIAL ASSETS
When it is rather a sale of financial assets , the capital gains that will be realized will be subject to two types of taxes. These include the progressive income tax and the tax on social contributions.
As regards the calculation of the amount of taxes linked to the tax on social levies, it must be said that it will be made up to 17.2%. However, it is important to specify that these charges can only be applied if the parties involved are natural persons.
OTHER TYPES OF TAXATION (INCOME GENERATED BY CASH AND ON LIFE INSURANCE)
Apart from the taxation mentioned in the previous cases, some SCPIs also impose taxes on income generated by cash. It is a tax that has been applied on a flat-rate basis since January 1 , 2018 and does not exceed 30%. It takes place on investment funds placed on hold or on sums acquired through the sale of certain financial products.
In the case of life insurance, the taxation applied depends solely on the unit purchase operation. The income earned by your SCPI will not be returned to you, but will be directly calculated and placed on your life insurance contract.