Wealth Taxation: How to Structure Your Assets Without Tax Risk

Wealth taxation plays a central role in the management and transfer of assets, whether real estate, financial, or professional. It concerns individuals with multiple assets, as well as business owners, investors, or individuals with international situations.

If not properly anticipated, it can lead to excessive tax burdens, tax reassessments, or the challenging of strategies implemented in good faith. When well managed, it allows, on the contrary, to secure asset choices, in compliance with the legal framework.

In Toulouse, many taxpayers wonder about the best way to structure their assets, optimize their taxation, and avoid the risks of reclassification by the tax authorities.

1. What is meant by wealth taxation?

Wealth taxation encompasses all tax rules applicable to:

• the holding of assets,

• their management,

• their transfer,

• and their disposal.

It notably concerns:

• real estate (primary residence, rental investment, SCI),

• financial investments,

• company shares,

• gratuitous transfers (donations, inheritances),

• international situations.

Contrary to a common misconception, wealth taxation is not limited to inheritance: it is part of a long-term approach, from the moment assets are constituted.

2. Why asset structuring has become a major challenge

The tax environment evolves regularly. Asset strategies that worked yesterday can today:

• become unsuitable,

• be fiscally penalized,

• or be challenged by the tax authorities.

The main current challenges are:

• real estate taxation,

• the challenging of arrangements deemed artificial,

• the fight against tax abuse,

• the taxation of assets with an international dimension.

A coherent asset structuring relies on a comprehensive legal and tax analysis, and not on the accumulation of isolated provisions.

3. Real Estate Wealth Taxation: A Central Point of Vigilance

Real estate assets often constitute the most significant part of individuals’ wealth.

It raises major questions:

• taxation of rental income,

• capital gains taxation,

• direct ownership or via an SCI,

• interplay between private and professional assets.

We assist you with your wealth taxation.

Poor structuring can lead to:

• heavier taxation than necessary,

• difficulties during resale,

• conflicts during transfer.

4. SCI and Wealth Taxation: Tool or Trap?

The SCI is often presented as an essential asset management tool. In practice, it can be:

• an effective tool,

• or a real tax trap if misused.

The main questions concern:

• the choice between income tax (IR) and corporate tax (IS),

• income taxation,

• capital gains taxation,

• the transfer of company shares.

The choice of tax regime must be made according to actual asset objectives, and not automatically.

5. Wealth Tax Optimization: What is Legal… and What is Not

Tax optimization consists of using legal provisions to reduce the tax burden. It is clearly distinct from tax fraud.

However, certain strategies may be reclassified as tax abuse / artificial arrangement, when the exclusively tax-related purpose is demonstrated.

Legal assistance allows for securing choices and avoiding risky schemes.

6. Asset Transfer: Anticipate to Limit Taxation

Asset transfer constitutes a pillar of wealth taxation.

Without anticipation:

• taxation can be heavy,

• heirs may find themselves in difficulty,

• family conflicts may arise.

Commonly used tools:

• donations,

• dismemberment of ownership,

• progressive transfer,

• structuring via companies.

Each situation must be analyzed taking into account the assets, family composition, and long-term objectives.

7. Wealth Taxation and Expatriation: Increased Vigilance

International situations significantly complicate wealth taxation.

Contrary to certain common misconceptions:

• expatriation does not eliminate all taxation in France,

• certain assets remain taxable,

• tax treaties must be analyzed with precision.

Cross-border assets are particularly monitored by the tax authorities.

8. When the Tax Authorities Challenge an Asset Strategy

The tax authorities have extensive means to control and challenge asset strategies:

• documentary checks,

• demandes de renseignements,

• accounting audit for a business or personal tax situation review for an individual.

The consequences can be severe:

• tax reassessments,

• penalties,

• late payment interest.