Taxable on Fortune (ISF) if your assets exceed a certain threshold on January 1? Thesecuritiesand must be accurately assessed. This article guides you through assessment methods, exemptions and reporting procedures.
Securities valuation for ISF
You will explore different methods to evaluate your securities under the ISF and optimize your reporting.
Methods of valuation of listed securities
To evaluate your securities, you have two options: the closing price of December 31 of the previous year or the average of the last 30 stock exchanges last year. Choose the most advantageous option for each line in your portfolio. For example, if Action A displays a closing price of 50 euros and an average of the last 30 days of 48 euros, take the lowest method reduces the taxable base.
These choices reduce the tax base, but it is imperative to keep supporting documents to prove the valuations chosen.
Valuation of unlisted and foreign exchange securities
Foreign values should be assessed as French values. The amount obtained in foreign currency shall be converted into euro at the exchange rate at 31 December of the previous year or the average of the last 30 days of the exchange. For example, if a share is valued at $100 with an exchange rate of €1.2 per dollar at December 31, the value in euros will be €120.
Special features of SICAV and FCP shares
The shares of SICAV and FCP must be reported for their last known value as at 31 December of the previous year. These products require special attention because their value can fluctuate rapidly.
Specific exemptions for securities and other assets for ISF
Some assets benefit from specific exemptions that may reduce your taxable base. Discover them in detail.
Totally exempt goods
Professional property satisfying the conditions, objects over 100 years old, art objects, collectible vehicles, industrial, literary or artistic property rights for the author or inventor, and certain financial investments made in France by non-residents are completely exempt. For example, a painting over 100 years of age will be completely exempt from the ISF, thus significantly reducing the tax base of the work.
Partially exempt property
Timber and forests, shares of forest groups, rural property leased by long-term leases, and shares of non-residents' property-based corporations benefit from partial exemptions. Wood and forest owners can benefit from a reduction of the ISF at 75% of their value.
Exemptions for personal injury and persecution
Life annuities and compensation for personal injury are specifically exempted.
Debt deduction
The deduction of debts is necessary to calculate your net assets taxable to the ISF. Find out the terms and types of deductible debts.
General conditions of deductible debts
The debts must exist on 1 January, be borne by a member of the tax home, and be justified by evidence compatible with the written procedure.
Types of deductible debt
Types of deductible debt include bank loans, tax debts, and those relating to the acquisition of partially exempt property. For example, a debt related to the purchase of real estate can be deducted in full if it is used for business purposes.
Comparison ISF vs IFI
Understanding the differences between ISF and IFI can help you manage your heritage effectively. Here is a detailed comparison.
Taxable net wealth
The ISF and IFI have tax thresholds of EUR 1.3 million, but the ISF taxes all assets while the IFI is limited to real estate assets.
Types of taxable property
ISF includes all movable and immovable property while IFI includes only real property. Movable assets such as shares or bonds are not included in the IFI.
Exemptions and deductions
Exemptions and deductions remain similar for both taxes, with reductions on principal residence and professional property. For example, the 30% discount on the principal residence applies in both cases.
To better understand the subtleties of securities valuation within the framework of the ISF, discover these tips on thetax and income tax: effective strategies to reduce your expenses.
To better understand the impact of securities on your taxable assets, see our guide onTax on unproductive wealth: understanding reform and its heritage issues.
| Criteria | ISF | IFI |
|---|---|---|
| Taxable net wealth | 1.3 million € for all assets | 1.3 million € for real estate assets |
| Types of taxable property | Real estate and movable property | Real property only |
| Exemptions: | Professional property, art objects | Professional property, art objects |
Securities FAQ and ISF
Responses to current securities issues under the ISF.
What valuation method do I choose for my securities?
You can choose between the last known price on 31 December of the previous year or the average of the last 30 last year prices for each line in your portfolio. If the average of the last 30 prices is more favourable than the last known price, use this method to reduce your taxable base.
Which securities are exempt from ISF?
Certain securities such as anonymous vouchers, art objects, and non-resident investments are exempt. Exemptions for art objects over 100 years of age can significantly reduce the ISF.
How are foreign currency claims valued?
Foreign currency receivables must be valued at the exchange rate at 31 December of the previous year or the average of the last 30 trading days of the previous year.
Evidence and case studies
Look at testimonials and case studies on securities valuation and exemptions for ISF.
Practical example of an evaluation of actions
Mr. Dupont assessed his shares with the closing price and the average of the last 30 days, thus optimizing his taxable base. By systematically choosing the lowest method, he managed to reduce his taxable base by 5%.
Case study on exemptions from goods
Mrs Martin was able to benefit from exemptions for her works of art exceeding 100 years, considerably reducing her ISF. By correctly declaring the market value of her works, she was able to reduce her tax by half.