Estate & investments income tax reform as from 2018

On July 12, 2017, the French Prime Minister, Edouard Philippe, confirmed the entry into force, as from 2018, of the tax reforms awaited by the investors notably since their announcement during the campaign of the new French President, Emmanuel Macron.

The French wealth tax replaced by a real estate tax

The French wealth tax (i.e. Impôt de Solidarité sur la Fortune – ISF) will be replaced by a real estate tax. Then, as from 2018, only real estate assets will be taxed.

The brackets and rates applicable for the new real estate tax will be the same as the one provided for the cur-rent French wealth tax. Furthermore, the relief of 30% applicable on the main residence will remain applicable.

Investments income subject to a flat tax of 30%

The Prime Minister has confirmed that the implementation of a flat tax of approximatively 30%, social surtaxes included, applicable on investments income will enter into force as from 2018.

He also specified that the current tax-free products, as the livret A, will remain exempted from taxes.

Furthermore, the Prime Minister pointed out that the life-insurance contracts will not be impacted by this reform. Indeed, only the new investment flows higher than EUR 150,000 would be subject to the new flat tax.

Christina Melady

Christina Melady, Partner, has over 23 years’ experience practicing tax law in France and advises both companies and managers on personal tax matters. Christina created the specialized practice in France […]

Alexis Fillinger

Alexis Fillinger has more than 16 years of practicing. He advises both companies and individuals on personal tax related matters. He has developed his expertise in management, carried interest, co-investments, […]

Nicolas Meurant

Nicolas Meurant, Partner, has over 23 years’ experience providing advice to corporations and individuals in individual tax and Global equity area, in the structuring of shareholding schemes, as well as […]