Published by: Elise Caradec — Editor specializing in consulting
Revealing SCPI shares is possible, but the disbursement of funds is not always immediate. The procedure depends first on the type of capital, variable or fixed, and then on the mode of holding, particularly in life insurance. Before issuing an order, you must identify the sales channel, estimate the net price and verify the liquidity of the SCPI.
The SCPI resale starts with the type of capital
A SCPI is a long-term real estate investment, usually considered over 8 to 10 years. Subscription fees, often between 7 and 12 % for traditional SCPIs, as well as the lack of a liquidity guarantee can make a quick exit costly. Legally, the partner may apply to transfer his shares. In practice, execution depends on the presence of new subscriptions or buyers.
variable capital SCPI: a request for withdrawal
For a variable capital SCPI, the partner shall address a request for withdrawal the management company, using the form provided. When new subscriptions offset withdrawals, shares are cancelled and the seller generally collects the withdrawal value. This corresponds in principle to the subscription price minus the subscription fee applicable to the SCPI.
If withdrawal requests exceed new subscriptions, they join a queue. The chronological order can then become decisive. The request for withdrawal therefore does not guarantee a payment on a fixed date. A less dynamic collection or a large stock of pending shares may extend the time.
SCPI fixed capital: a secondary market order
In a fixed capital SCPI, the sale usually involves a order book administered by the management company. The seller shall indicate the number of shares and the minimum price desired. The confrontation between buying and selling orders then determines a execution price. This may be lower or higher than the last known price. An abundant supply favours haircut, while a strong demand can create a surge.
| Output mode | Senior Interlocutor | Reference price | Point of vigilance |
|---|---|---|---|
| Withdrawal, variable capital | Management company | Withdrawal value | Waiting file and new subscriptions |
| Secondary market, fixed capital | Management company | Executing price | Balance between buyer and seller orders |
| OTC transfer | Buyer and management company | Negotiated price | Payment formalities, entitlements and security |
| SCPI in Life Insurance | Insurer | Value of support according to contract | Envelope-specific rules |
Prepare order and verify liquidity before selling
The first reflex is to consult the last quarterly bulletin, the articles of association and the documents published by the management company. They shall specify the terms of withdrawal or sale, any costs, the number of shares pending and the volume of trade. These data are more useful than a general estimate of the timeframe.
Documents and information to be gathered
The collective society or insurer usually requests a dated and signed form, identification, BIR and associated account references. In the case of indivision, succession, proxy or dismemberment, additional evidence may be required. For shares held in bare ownership and usufruct, the agreement of the rightholders and the conditions laid down by the dismemberment must be verified before any transfer.
- The number of shares to be disposed of, with the possibility of a partial sale;
- The acceptable minimum price or the applicable withdrawal value;
- The date of enjoyment and its possible impact on future income;
- The acquisition price and the costs of origin necessary for the calculation of any surplus value;
- The conditions for changing or cancelling the order.
The share price is not enough to measure the interest of a sale. It is also necessary to look at the queue, the income to which the sale terminates, the discount, if any, necessary to find a buyer and future tax. This overview helps to choose between a total sale, a partial sale to meet a specific cash requirement or the maintenance of shares where the urgency is limited.
Estimate the time and amount actually collected
The resale period may range from a few weeks to several months, or even longer when liquidity deteriorates. There is no universal duration. For a variable capital SCPI, the delay depends primarily on the ability of new subscriptions to absorb withdrawal requests. For a fixed capital SCPI, it depends on the number of buyers and the price charged.
Understanding CIPS: Operation, Disposal and Liquidity Risks · An official AMF guide to understand the functioning of SCPIs, their terms of sale and liquidity risks.
A simple estimate based on published data
Where data are available, an order of magnitude can be obtained using the following formula: Shares on hold. For example, 12,000 outstanding shares divided by 4,000 shares traded in the quarter and then multiplied by 3 give an estimate of 9 months. This calculation does not constitute a guarantee. Future exchanges, new orders and collection can evolve.
The net amount receivable does not necessarily correspond to the price displayed. For a sale at the negotiated price, the calculation can follow this logic: gross selling price - possible transfer or brokerage costs - administrative costs - possible capital gain tax. Registration rights, often around 5% in a secondary assignment, must also be taken into account in the intended distribution between the parties.
Taxation, life insurance and blocking solutions
Without life insurance, the surplus value realized on shares of SCPI is in principle governed by the system of real estate gains. The rate announced is 19 per cent for income tax, plus 17.2 per cent of social contributions, or 36.2 per cent before deductions. The length of detention counts: the income tax exemption comes after 22 years and the social tax exemption comes after 30 years. A loss of value does not generate this tax, but it does not automatically offset other distributed revenues.
The special case of life insurance units
In a life insurance contract, the investor does not sell its shares directly on the market. He asks for a buyback from the insurer, which applies the rules of the contract and returns the funds after processing. The tax system is then life insurance, not a direct real estate transfer. After 8 years, an annual reduction of EUR 4,600 per person is quoted on earnings, subject to the savings situation and the terms of the contract.
What to do when the exit delays?
If the queue becomes long, it is better to avoid a hasty decision. An over-the-counter assignment may be considered with an identified buyer, provided that the management company is informed and the required formalities are followed. A specialized platform or intermediary can also facilitate networking. However, a discount, fee or transfer fee may reduce the net seller amount. The use of a notary secures the identity of the parties, the origin of the funds and the transfer. It is not always mandatory.
When the liquidity of a SCPI deteriorates, it is more appropriate to compare the waiting time, the discount and the actual need for cash than to seek immediate sale at any price. An asset management advisor or financial investment advisor can help reread the documents, encrypt the net seller and verify the consistency of the decision with the entire asset.