Special cases on share exchanges
Tax system governing deferred taxation applicable to the operations carried out in 1999 for information purposes only
Share exchange operations are treated in the same way as the sale of securities by French tax law. As a result, they are included in the calculation of the threshold of disposals and lead to the taxation of capital gains in the event the transfer threshold is exceeded. This threshold was fixed at FRF50,000 (gross) for 1999 and 2000.
Exchange operations entitle investors to defer taxation. If you decide to opt for this facility, we would like to remind you that the deferment request must concern all the shares exchanged, even if all or part of these securities were sold between the moment of the exchange and the date at which the income tax return is filed.
Characteristics of the deferment of taxation
for the shareholder, the request for deferred taxation has the following consequences:
- the exchange operation is not included in the calculation of the annual threshold of sales,
- the taxation of the capital gains is deferred until the securities received in the exchange operation are effectivly sold.
Termination of the deferment and possible taxation of capital gains
The deferred taxation ceases the year in which the securities received in exchange are effectively sold if the annual threshold of disposals is exceeded, the taxation is based on the rate in force during that same year. The deferred capital gains will be added to any other capital gains realized that same year, the sum of these capital gains being reduced by the total capital losses incurred that year and any capital losses carried over from previous years.
When the securities for which deferment was requested, are transferred free of charge (donation, succession), the deferred capital gains are then definitively exonerated.
How to request deferment of taxation
To ask for deferred taxation, you should obtain a copy of the tax declaration Form 2074 from your local tax office, complete it and join it to your income tax return.
Share exchange operations are treated in the same way as the sale of securities by French tax law. As a result, they are included in the calculation of the threshold of disposals and lead to the taxation of capital gains in the event the transfer threshold is exceeded. This threshold was fixed at FRF50,000 (gross) for 1999 and 2000.
Exchange operations entitle investors to defer taxation. If you decide to opt for this facility, we would like to remind you that the deferment request must concern all the shares exchanged, even if all or part of these securities were sold between the moment of the exchange and the date at which the income tax return is filed.
for the shareholder, the request for deferred taxation has the following consequences:
- the exchange operation is not included in the calculation of the annual threshold of sales,
- the taxation of the capital gains is deferred until the securities received in the exchange operation are effectivly sold.
Termination of the deferment and possible taxation of capital gains
The deferred taxation ceases the year in which the securities received in exchange are effectively sold if the annual threshold of disposals is exceeded, the taxation is based on the rate in force during that same year. The deferred capital gains will be added to any other capital gains realized that same year, the sum of these capital gains being reduced by the total capital losses incurred that year and any capital losses carried over from previous years.
When the securities for which deferment was requested, are transferred free of charge (donation, succession), the deferred capital gains are then definitively exonerated.
How to request deferment of taxation
To ask for deferred taxation, you should obtain a copy of the tax declaration Form 2074 from your local tax office, complete it and join it to your income tax return.
The deferred taxation ceases the year in which the securities received in exchange are effectively sold if the annual threshold of disposals is exceeded, the taxation is based on the rate in force during that same year. The deferred capital gains will be added to any other capital gains realized that same year, the sum of these capital gains being reduced by the total capital losses incurred that year and any capital losses carried over from previous years.
When the securities for which deferment was requested, are transferred free of charge (donation, succession), the deferred capital gains are then definitively exonerated.
To ask for deferred taxation, you should obtain a copy of the tax declaration Form 2074 from your local tax office, complete it and join it to your income tax return.