If the holding company resells the titles provided within three years, The holding company must reinvest 60 % of the sale price. But beware, this reinvestment is very supervised. The most important thing to remember is that the holding company must reinvest the relevant part of the sale price in a commercial activity, industrial, artisanal, agricole, liberal or financial. The objective of the legislator is to nourish economic activity, movable or real estate management activities are therefore excluded.
This exclusion is likely to be reinforced in the near future, an amendment to the bill for 2025 has been tabled to this effect, clearly stating : “The management activities of any real estate or real estate company or hotel service within the meaning of article 251 D of the general tax code are also excluded from the benefit of this exemption. (…). » Reinvestment must take place within two years, and must last a minimum of one year, or even five years for units or shares of FCPR-type funds (risk mutual fund or FPCI (professional investment capital fund). It is possible to reinvest in an animating holding company but be careful, here again, to carefully check that it has a real commercial activity.
How to reinvest ?
The holding company can :
• finance permanent operating resources allocated to its activity (materials…) ;
• acquire shares in an operating company or an animating holding company. This acquisition must confer control of the operating company by allowing it to either hold the majority of voting rights or rights to profits., or to exercise decision-making power ;
• subscribe to the capital of an operational company or an animating holding company in cash in the initial capital or during a capital increase, without conditions linked to the control of this company ;
• subscribe to investment capital shares (FCPR, FPCI, SCR, SLP), provided that the fund holds at least 75% of operating companies.
In what medium to reinvest ?
It is permitted and even advisable to invest your money in several distinct vehicles in order to limit the risks.. The manager can reinvest :
• in a commercial company of a third party, respecting the conditions described above. Attention, because if the eligibility conditions are not met, the capital gain carryover falls. A duration of ten years is recommended, and returns are very fluctuating ;
• by taking a stake in unlisted companies via specialized private equity funds (FCPR, FPCI) to finance their growth or restructuring. In this case, a management company manages the funds and avoids spending time on them. You generally have to wait five to ten years before recovering capital at the end. It is possible to choose the sector in which you can reinvest. The return can go as far as being greater than 10% per year. Attention, it is mandatory that the FCPR invest at least 75% in unlisted companies, otherwise the capital gain deferral falls and the manager loses the benefit of the contribution-transfer ;
• in a Real Estate Deal Club (5-6 ans), often through an FCPI, which can yield around 7% per year. Several investors take part in the project and buy a rare good together (a hotel, a building…) to renovate it then resell it, For example.
The consequences of changes in situation
Several scenarios can arise.
• If the manager moves outside France, the added value is immediately due.
• If he dies, the capital gain carried forward is definitively purged. The heirs will never have to pay it.
• If he transfers the holding company as part of a donation, the capital gain carried forward is purged if the donees keep the securities five or even ten years after the donation. Otherwise, the donees (children) will have to pay 100% of the capital gain carried forward in place of the donor.
• If he exchanges the securities of the holding company : maintaining the initial postponement and, if applicable, successive postponements, regardless of the number of operations carried out within the framework of the provisions of article 150-0 B are you CGI (which regulates the contribution-transfer system).
• If he sells the holding company which owns the investment company (by transfer, redemption, cancellation of securities by capital reduction, etc.) : the added value is immediately due.
• In the event of sale of the operating company by the holding company, it all depends on whether the sale takes place before or after a period of three years. Before the end of the third year of the contribution, the deferral is maintained if 60% of the sale price is reinvested in an “economic activity”. The tax deferral is only ended in proportion to the securities sold, redeemed, refunded or canceled. After the end of the third year of the contribution, the postponement is maintained as long as the preceding events do not intervene (cession holding, donation, death, expatriation). If the holding company only sells part of its operating company, it is only on this part that he must reinvest. for example, if he sells 60%, the remaining 40% will always remain tax deferred.
If the conditions are not respected, you have to pay the added value
If the manager does not respect the 60% reinvestment conditions, the added value is immediately due, with late payment interest (0,2% per month) counted from the day of the contribution of the securities. If the FCPR or FPCI in which he invested does not meet the condition of 75% eligible investments, the capital gain is due if this condition is not met at the end of the five years of investment. Particular attention must be paid to reporting obligations. They are numerous, at all stages : the year of the contribution (constitution de la holding), during the carryover and the year the carryover ends. They must be carried out, according to the obligations, by the donor and by the donee. In case of non-compliance, they risk a fine of 150 euros per declaration not made, and above all the loss of the benefit of tax deferral.
An example of recommendation
Still assuming a valuation of the operating company at one million euros, a good solution may be, for the manager, to keep 20% of this company directly and to contribute 80% to the holding company. The 20% (200 000 euros) allow you to obtain 140,000 euros (after payment of the 30% flat tax) free of reinvestment, in his personal bank account. The 80% (800 000 euros) make it possible to reduce the amount of 60% reinvestment in an “economic activity” (480,000 euros instead of 600,000 euros) and optimize the added value on the 40% free for reinvestment (320,000 euros instead of 400,000 euros). This solution allows you to pay off your personal debts and/or realize a personal project while avoiding the frustration of not being able to use the fruits of this sale.. It also allows you to create additional income directly (dividends) and not within the holding company so as not to encapsulate everything.
ADVANTAGES AND DISADVANTAGES OF THE CONTRIBUTION : KEY POINTS TO REMEMBER
• Obligation to reuse 60% of the transfer price in the event of transfer within the first three years after the contribution.
• The sale proceeds are encapsulated within the holding company at the IS : tax will be due in the event of distribution of dividends or reduction of capital (30 %).
• Loss of benefit from the 500,000 euro allowance for retirement.
• Administrative : management of two accounts, two approvals of accounts with the costs that this entails.
MORE :
• The manager keeps 100% of the sale price and can reinvest the entire amount, without taxation, in order to create additional income.
• He can start his inheritance transfer and prepare for his retirement.
• The investments eligible for reinvestment are very diversified and profitable, although they should not represent the entire heritage placed.
