Under the Finance Act 2022, the system for capital gains on the sale of a business was modified and made more flexible in favor of two major changes. Back to these updates.
Increase in thresholds by transfer rate
Some regulations allow for exemption from professional capital gains from the sale of securities or assets (excluding real estate assets) resulting from the transfer of a sole proprietorship or an entire branch of business. Until then, in accordance with Article 238 of the CGI, capital gains from the sale of professional assets benefited from total exemption from income tax (up to 300,000 euros) or partially (from 300,000 euros to 500,000 euros), within the framework of the activity was carried out for 5 years.
” This update of the scales comes as a boost from legislators for the self-employed in an economic context unfavorable with the health crisis, especially because it has not been reviewed for a long time either, which necessarily and ultimately means an increase. »
New for 2022
The Finance Act 2022 increases the ceilings for the exemption scheme, ie income tax and CSG/CRDS, with a reassessment of the minimum from €300,000 to €500,000 (total) and from €500,000 to €1 million (partial).
” If the mechanics are simple for the total exemption, they are subtle for the partial exemption which is based on a descending account that includes a descending exemption, and in fact less important, as one approaches 1 million euros. This raises legitimate questions for managers: Is it better to sell for a million and pay income tax, or sell at a lower price and aim for capital gains exemption? »
Increase in retirement
Prior to the revision of the statutory material, the director (the natural person) had a period of two years (24 months), before or after the activity ceased, to ensure the transfer of his company from the moment Where the latter was confirming his pension rights and entering into the capital gains exemption system that relates only to income tax and not social security contributions.
” Same observation as before, the Covid-19 crisis led to early retirements with managers finding themselves frustrated with their projects, with difficulty finding a buyer. »
New for 2022
The period extends from 24 to 36 months for an entrepreneur who wants to retire. On the other hand, it is a very delicate arrangement that must be observed from now on. Retirement must precede conversion, It is necessary that he asserted his rights between January 1, 2019 and December 31, 2021. May be sold between 2022 and 2024.
Anticipation as a cornerstone
Nowadays, the status of sole proprietorship is becoming less popular in favor of the more advantageous society. In fact, the portion of customers affected by these exemption mechanisms is smaller and the margin and therefore…often less vigil due to the complexity and ignorance of the regulatory environment.
As such, using a chartered accountant is essential to understand the features of the different income tax systems and adopt the best solutions according to your profile. Added to this are pool exemptions or other mechanisms such as contribution waiver (consisting of a director contributing his shares to a holding company in order to improve his company’s resale) which can also be taken into consideration.
Therefore the chartered accountant presents himself as a decoder but above all as a consultant to avoid the disappointments of his clients that they may encounter upon conversion. However, this does mean anticipation because some systems sometimes require several years. Depending on the positions offered, the chartered accountant will be able to recommend what is most suitable for the manager according to criteria such as: the size of future capital gains; The selling price of the company; Transfer deadlines desired by the seller, etc.
Anticipating, supporting and advising…are all assets of the accountant who will guide the manager and demonstrate possible alternatives. Purchase, transfer, reorganization are not exceptions in the life of an entrepreneur but are events that permeate his projects. So it is necessary to be an escort.