The French Revenue has now issued the habitual CERFA forms n° 2725 and the deadline for declaring and paying your ISF is 15 July 2015.

ISF will apply again this year to individuals whose net wealth was above EUR 1.3 million as on 1 January 2015.

As previously, non-residents will only be taxed on their French-situated assets (French residents are taxed on their worldwide assets). Since 1 January 2012, these include settled assets regarded as forming part of the settlor’s wealth even held through a discretionary trust.

The taxable base comprises the fair market value of the assets as owned by the foyer fiscal (‘taxpaying household’) i.e. spouses/civil partners or even cohabiting couples.

The declaration is made on a self-assessed basis.

Certain assets, such as financial investments (held by non-residents), works of art or business assets (for residents or non-residents) are exempt or subject to a rebate (agricultural property).

Debts outstanding on 1 January 2015 may be deducted with supporting evidence.

However since 1 January 2012, the market value of a property predominant company (e.g. SCI) held by a non-resident individual must be assessed with no reference to debts held directly or indirectly by its shareholders (director’s loans). External debts such as loans granted on commercial basis (mortgages) remain fully deductible.

If your net wealth happens to be less than EUR 1.3 million at the result of the deduction of a debt, you are advised to submit a declaration together with supporting evidence (outstanding position on 1 January 2015).

Investments in small to medium EU businesses may benefit from a rebate corresponding to:

  • 50 percent of the amount subscribed (directly or through holding companies) in the capital of certain small to medium EU based companies (as defined) with a maximum of EUR 45,000;
  •  50 percent of the amount subscribed in the capital of qualifying French hedge funds (or other EU countries equivalent): fonds d’investissement de proximité (‘FIP’), fonds communs de placement dans l’innovation (“FCPI”) or fonds communs de placement à risques (“FCPR”) with a maximum of EUR 18,000.

To be taken into account, these investments must have been made between 15 July 2014 and 15 July 2015 (for non-residents). The rebate is subject to the retention of the subscribed shares over a period of five years.

ISF 2015 will be calculated as follows (‘clawing back’ to EUR 800,000 once the EUR 1.3 million threshold has been reached):

Net wealth (€)

rate

Not exceeding 800,000

0.00%

Between 800,000 and 1,300,000

0.50%

Between 1,300,000 and 2,570,000

0.70%

Between 2,570,000 and 5,000,000

1.00%

Between 5,000,000 and 10,000,000

1.25%

Above 10,000,000

1.50%

ISF cannot exceed 75% of the household’s income. However this ‘cap’ is only available to French residents.

Declaration and payment should be sent to Centre des Impôts des non-résidents, 10 rue du Centre, 93463 Noisy le Grand Cedex.

Download French wealth tax (IFS) 2015 - time to declare.

Patrick Delas