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How will FCPRs be taxed in 2023?

In this image, a table is adorned with a variety of items essential to financial management and taxation. A calculator, coins, banknotes, tax forms, a notebook, a pen and annotations.

Exemption from capital gains tax

Getting a good return on investment from a well-managed FCPR is good enough, but avoiding having that return cut by the tax cut is even better!

The FCPR tax system allows you to benefit from a tax exemption on capital gains. To qualify, you must meet certain conditions. In this case, the sale or redemption of your shares must occur after the minimum 5-year holding period.

If you sell your shares during the holding period, any capital gains realized will be taxed as capital gains on the sale of securities.

Moreover, capital gains realized on the sale of shares are not exempt from the 17.2% social security levy.

No tax reduction on subscription of shares

Unlike FIPs, FCPIs, and SOFICAs, subscribing to FCPR units does not entitle you to any tax breaks when you subscribe. In other words, you don't get a tax break on entry, but rather on exit.

How are FCPRs taxed in special situations?

FCPR tax treatment of exceptional redemptions

In the event of an exceptional buyback during the 5-year holding period, the income tax exemption is maintained. However, the repurchase must be due to a family event such as :

  • Death of the policyholder or his/her spouse,

  • Disability of the policyholder or his/her spouse,

  • Retirement of the policyholder or his/her spouse,

  • Dismissal of the policyholder or his/her spouse,

However, you are still liable for 17.2% of social security contributions.

Tax treatment of venture capital funds in other financial products

Tax treatment of FCPR units held in another financial product. There is an exception for FCPR units subscribed via another financial product, such as a PEA-PME contract or a life insurance policy. In this case, the tax treatment is specific to the tax envelope in question.

For example, if your shares are included in a life insurance policy, life insurance taxation applies to your FCPR shares.

We're coming to the end of our series on FCPRs, but it's not yet time to turn the last page. The next article will be our final installment, bringing together the key points you need to know in order to manage your FCPRs in the best possible way. To keep you informed and make informed decisions about FCPRs, we invite you to consult Capital Conseils², your trusted financial and tax management resource. #Investment #Innovation #FCPR

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