INCREASED VALUES FROM ALIENATION OF BUILDING LAND
LexInter | November 28, 2002 | 0 Comments

INCREASED VALUES FROM ALIENATION OF BUILDING LAND

Article 238h
(Edition of July 1, 1979)) (Law n ° 98-1266 of December 30, 1998 art. 39 I 23 finances for 1999 Official Journal of December 31, 1998)
When the purchaser is a public authority, the capital gain realized on the occasion of the alienation of an undeveloped land or of an assimilated property within the meaning of A of article 1594-0 G may, for the Establishment of income tax or corporation tax, be related, at the request of the taxpayer, to the income for the year during which the allowance was actually received.
Article 238i
(Edition of July 1, 1979)) (Law n ° 98-1266 of December 30, 1998 art. 39 I 23 finances for 1999 Official Journal of December 31, 1998)
I. 1 In the event of a contribution of unbuilt land or an asset assimilated within the meaning of A of article 1594-0 G to a civil construction company meeting the conditions defined in article 239 ter, the capital gain generated is, for the establishment of income tax or corporate tax, taxed for the year of the last sale by the company of the buildings or fractions of buildings built by it on land subject to the contribution.
However, in the event of the death of the contributor, taxation is established for the year of death.
In any case, the tax must be established, at the latest,2 In the event of transfer by the person liable for the rights received in consideration for his contribution or of buildings or parts of buildings received in representation of his rights, the capital gain generated by the contribution of the land is, for the establishment of the Income tax or corporate tax, imposed for the year of the last transfer if it has not already been taxed under 1.3 (Repealed)II. When an undeveloped land or an asset assimilated within the meaning ((of A of article 1594-0 G)) (M) is brought to a co-ownership company defined in article 1655 ter, the transfer is deemed to relate to the entire land or property for the determination of the corresponding capital gain.
This capital gain is, for the establishment of income tax or corporation tax, taxed for the year of the last sale by the person liable for the rights received in remuneration of his contribution or of the buildings or parts of buildings received in representation of their rights.
However, in the event of the death of the contributor, taxation is established for the year of death.
In any case, the tax must be established, at the latest, for the fifth year following that of the completion of the constructions.

III. When it becomes taxable under the conditions defined in I and II, the capital gain generated during the contribution of the land is determined according to the rules applicable when the contribution is made.

Article 238 undecies
(Edition of July 1, 1979)) (Law n ° 98-1266 of December 30, 1998 art. 39 I 23 finances for 1999 Official Journal of December 31, 1998)
When the transfer of an undeveloped land or of an assimilated property within the meaning of A of article 1594-0 G is remunerated by the handing over of buildings or parts of buildings to be erected on this land, the taxation of the capital gain generated on the occasion of this transaction is, for the establishment of income tax or corporation tax, established for the fifth year following that of the completion of the constructions.
However, in the event of the transfer of buildings or parts of buildings or of the taxpayer’s death before the expiry of this period, the tax is established for the year of the last transfer of buildings or parts of buildings or of death.
In either case, the capital gain resulting from the sale of the land is determined according to the rules applicable when the sale is made.
Article 238 duodecies
(inserted by Edition of July 1, 1979))
The provisions of articles 238 decies and 238 undecies are applicable to contributions and exchanges made after the promulgation of the land orientation law n ° 67-1253 of December 30, 1967.
Article 238 terdecies
Article 238 terdecies

(Law n ° 82-1126 of December 29, 1982 art. 7 II a finances for 1983 Official Journal of December 30, 1982 date of entry into force JANUARY 1, 1983)
(Decree nº 88-1001 of October 20, 1988 art. 1 Official Journal of October 22, 1988)
(Law n ° 2003-1311 of December 30, 2003 art. 10 II s finances for 2004 Official Journal of December 31, 2003)
Articles 238h to 238th apply when the transfer occurs at least two years after the acquisition.
However, the tax deferral cannot exceed five years. Articles 238h to 238th do not apply to capital gains taxed in accordance with article 150 U.
Article 238 quaterdecies

(Law n ° 2004-804 of August 9, 2004 art. 13 Official Journal of August 11, 2004)
(Law n ° 2004-1485 of December 30, 2004 art. 52 amending finance for 2004 Official Journal of December 31, 2004)
(Decree n ° 2005-330 of April 6, 2005 art. 1 Official Journal of April 8, 2005)
I. – Capital gains subject to the regime of articles 39 duodecies to 39 quindecies and realized within the framework of a commercial, industrial, artisanal or liberal activity are exempt when the following conditions are simultaneously satisfied:
1 ° The transferor is either:
a ) A company whose results are subject to income tax;
b) A non-profit organization;
c) A local authority or a public establishment of intermunicipal cooperation or one of their public establishments;
d) A company whose capital is fully paid up and continuously held, for at least 75%, by natural persons or by companies whose capital is held for at least 75% by natural persons;
2 ° The transfer is carried out against payment and relates to a complete branch of activity;
3 ° The value of the elements of this complete branch of activity serving as the basis for the registration fees payable under articles 719, 720 or 724 does not exceed 300,000 euros.
4 ° The assignor must not be in at least one of the following situations:
a) The assignor, his spouse, the partner to whom he is bound by a civil solidarity pact defined in article 515-1 of the Civil Code, their ascendants and descendants, their brothers and sisters together, directly or indirectly, hold more than 50% of the voting rights or rights in the social benefits of the company, the legal person or the transferee group;
b) The assignor exercises in law or in fact, directly or indirectly, the effective management of the assignee company, legal person or group.
I bis. – The exemption provided for in I is called into question if the transferor finds himself in one or other of the situations referred to in 4 ° of I at any time during the three years following the completion of the transfer.
II. – By way of derogation from the provisions of I, the capital gains realized on the occasion of the sale of built or non-built real estate, included, where applicable, in the complete branch of activity sold, remain taxable under the conditions of law common.
III. – The provisions of 1º, 2º, 3º of I and II apply to transfers made between June 16, 2004 and December 31, 2005.
Article 238 quindecies

(Law n ° 2005-1720 of December 30, 2005 art. 34 amending finance for 2005 Official Journal of December 31, 2005)
I. – Capital gains subject to the regime of articles 39 duodecies to 39 quindecies and realized within the framework of a commercial, industrial, artisanal, liberal or agricultural activity on the occasion of the transfer of a sole proprietorship or of a complete branch of activity other than those mentioned in V are exempt for:
1 ° The entire amount when the value of the elements transmitted serving as the basis for the registration fees mentioned in articles 719, 720 or 724 or similar elements used in the context of a farming operation is less than or equal to 300,000 euros;
2 ° A part of their amount when the value of the elements transmitted serving as the basis for the registration fees mentioned in articles 719, 720 or 724 or similar elements used in the context of an agricultural operation is greater than 300,000 euros and less to 500,000 euros.
For the application of 2 °, the exempt amount of capital gains is determined by applying a rate equal to the ratio between, in the numerator, the difference between the amount of 500,000 euros and the value of the elements transmitted and, in the denominator, the amount of 200,000 euros.

II. – The exemption provided for in I is subject to the following conditions:
1 The activity must have been carried out for at least five years;
2 The person at the origin of the transfer is:
a) A company whose results are subject to income tax or a taxpayer who carries out his professional activity within the framework of a company whose profits are, in application of Articles 8 and 8 ter, subject in its name to income tax;
b) A non-profit organization;
c) A local authority, a public establishment of intermunicipal cooperation or one of their public establishments;
d) A company subject to corporation tax which cumulatively meets the following conditions:
1 ° it employs less than two hundred and fifty employees and either achieved an annual turnover of less than 50 million euros during the year. financial year, or has a balance sheet total of less than 43 million euros;
2 ° 25% or more of its capital or voting rights are not held by a company or by several companies that do not meet the conditions of the previous paragraph continuously during the financial year. To determine this percentage, the holdings of venture capital companies, risk mutual funds, regional development companies, innovation finance companies and one-person risk investment companies are not taken into account. account on the condition that there is no arm’s length relationship within the meaning of 12 of Article 39 between the company in question and these latter companies or funds.
3 In the event of transmission for consideration, the transferor or, in the case of a company, one of its partners who directly or indirectly holds at least 50% of the voting rights or rights in the corporate profits or exercises the effective management there does not exercise, in law or in fact, the effective management of the transferee company or does not hold, directly or indirectly, more than 50% of the voting rights or of the rights in the corporate profits of this company.

III. – Are assimilated to a complete branch of activity all the rights or shares held by a taxpayer who exercises his professional activity within the framework of a company whose profits are, in application of articles 8 and 8 ter, subject to it. name for income tax and which are considered as assets allocated to the exercise of the profession within the meaning of I of article 151h.
When the conditions provided for in 1 to 3 of II are met, the capital gains realized on the occasion of the transmission of rights or shares mentioned in the first paragraph of this III are exempt for:
1 ° The full amount when the market value of the rights or shares transferred is less than or equal to 300,000 euros;
2 ° A part of their amount when the market value of the rights or shares transferred is greater than 300,000 euros and less than 500,000 euros.
For the application of 2 °, the exempt amount of capital gains is determined by applying a rate equal to the ratio between, in the numerator, the difference between the amount of 500,000 euros and the value of the securities transferred and, in the denominator, the amount of 200,000 euros.
For the determination of the thresholds mentioned in 1 ° and 2 °, account shall be taken of the transfer of all the rights or shares defined in the first paragraph as well as of the transfers carried out during the previous five years.
By way of derogation from V, the provisions of this III apply to capital gains realized on the rights or shares of companies whose assets mainly consist of built or unbuilt real estate assigned by the company to its own exploitation or of rights or shares in companies whose assets mainly consist of the same property, rights or shares.
In the event of the transfer for payment of rights or shares giving rise to the exemption provided for in the second paragraph, the transferor must not directly or indirectly hold voting rights or rights in the corporate profits of the transferee company.

IV. – The exemption provided for in I and III is called into question if the transferor falls within one of the situations mentioned in 3 of II and in the last paragraph of III at any time during the three years following the completion of the operation having benefited from the regime provided for in this article.

V. – Are taxed under the conditions of common law the capital gains realized on the occasion of the transfer of the sole proprietorship or of the complete branch of activity relating to:
1 ° Real estate, whether built or not;
2 ° Rights or shares in companies whose assets mainly consist of built or unbuilt real estate or rights or shares in companies whose assets mainly consist of the same goods, rights or shares.

VI. – For the application of the provisions provided for in III and V, the rights relating to a leasing contract concluded under the conditions provided for in 2 of Article L. 313-7 of the Monetary and Financial Code are assimilated to elements of the asset.
For the application of the provisions provided for in III, the goods mentioned in I of A of article 1594-0 G are not considered to be used for the operation of the activity.
VII. – The transfer of an activity which is the subject of a lease-management contract or a comparable contract can benefit from the regime defined in I if the following conditions are simultaneously satisfied:
1 ° The activity has been carried out for at least five years at the time of rental;
2 ° The transmission is made for the benefit of the tenant.
For the assessment of the thresholds mentioned in 1 ° and 2 ° of I, the value of the elements of the rented activity serving as the basis for the registration fees mentioned in articles 719, 720 or 724 or of the value of similar items used in the context of a leased agricultural operation.
VIII. – The option for the benefit of the regime defined in this article is exclusive of that of the regimes provided for in I of article 41, I ter of article 93 quater, in articles 151 septies, 151g and 151g A, in II of article 151h and in articles 210 A to 210 C and 210 E.
IX. – The provisions of this article apply to transmissions made from January 1, 2006.

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