The holiday season is traditionally an opportunity to show generosity to family or loved ones, or to foster some charities that are close to your heart. The end of the year also rhymes with tax exemption, given that there is until December 31st to lower income tax for 2022. Two apparently distant objectives but which can however be achieved simultaneously using the right strategies. Christmas obliges, it is impossible, for example, not to talk about the fate of the gifts you intend to offer your loved ones. “Gifts, which are legally called customary gifts, do not have to be declared to the tax authorities because they are not taxable”, André Percheron, tax advisor at TZA Avocats and first guest at the “Grand rendez-vous de l’épargne” (Capital / Heritage Radio). The expert recalls that these offers must be made at “specific times, such as Christmas, a birthday or a wedding”, the value of the gift having to be considered modest in relation to one’s income. Different characteristics from those of the manual donation, which does not even have to be declared to the tax authorities, but for which, advises André Percheron, it may be important to be transparent with the tax authorities in order to carry out the tax reminder and avoid further taxes at the time of your succession.
While it is obviously impossible to reduce income tax by giving a gift to a loved one, you can then benefit them without seeing this generosity cause additional taxation. However, it is possible to reduce the taxation by resorting to the tax exemption. But not anyway. “Tax exemption is not an end in itself, but a means of investing. If the only criterion is to want to reduce taxes by investing, the strategy is not the right one”, warns Thaïs Castang, partner of the asset management consultancy L&A Finance and second guest of our show. Above all, it is the asset in which one invests that prevails, the tax exemption should only be considered as “the icing on the cake”. A reflection that must be yours, whatever the product chosen, whether it is a pension savings plan (PER) or riskier investments, such as the FIP-FCPI. To invest in these funds, Thaïs Castang also recommends getting “accompanied by professionals who will select the organization that offers this type of product and will follow their clients over time”. The best way to limit the risk according to the expert.
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The tax deduction for donations
If the risk – and the possibility of losing part of your bet – discourages you, you have one main solution available: donate to a charity. A gesture of philanthropy rewarded by a tax relief, “generally 66% of the amount of the donation within the limit of 20% of taxable income”, explains André Percheron. For some organizations that help people in difficulty or victims of domestic violence, this percentage is even increased to 75% for the first 1,000 euros donated. These donations are also totally tax-free for the recipients, i.e. the beneficiary associations.
If donating to associations remains a relatively unknown solution to the general public, it is gradually catching on with the French, according to Laurence Lepetit, general delegate of France generosities, the union of associations and foundations that appeal to the kindness of the public. In our “Reportage” sequence, the leader points out that generosity is not an empty word in France, given that 8.5 billion euros are given every year in France, 5 billion of which by individuals alone. . Use of the funds raised, control of the organizations, communication around the actions carried out… Laurence Lepetit takes stock of the best practices implemented in the sector.
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Life insurance, an instrument of generosity
And if the philanthropy of the French does not seem destined to run out, it is also because the means to support the causes dear to them are ever more numerous. Therefore, from 1 October 2020, holders of a Booklet for Sustainable and Solidarity Development (LDDS) can donate their interests or part of their capital to actors in the social and solidarity economy. An important lever for associations, but still limited compared to life insurance, which is gradually becoming a real instrument of generosity in France. “You can take out life insurance and make a legacy or put a non-profit association as a beneficiary,” recalls Thaïs Castang. An option unknown to most savers, and which should develop in the coming years given its advantages, including a possible absence of taxation for the organization thus benefited. “When you designate a charity as the beneficiary of your life insurance contract, you need to find out if it is free of charge transfer taxes,” warns Maître Percheron, inheritance treatments differ according to associations. .
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Finally, if you don’t have enough money to donate to an organization, be aware that sponsorship (for a business), rent waiver, or asset donation, with a key tax break, is possible.
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“Coup de coeur / rant” by Pierre Sabatier
In his monthly column “Coup de coeur/coup de gueule”, the economist Pierre Sabatier gives gold a very good point for all his work in 2022. The course of the barbarian relic has in fact proved to be more than admirable, according to the president and founder of PrimeView, “at a time when all other assets ended up losing ground – between 10% and 20%”. “The data speak for themselves, with an increase of almost 8% in euros”, continues the expert, for whom gold will continue to play its role of monetary insurance in the years to come.
Our commentator’s final rant is aimed at investors with short memories. If they are rightly convinced that inflation is behind us, the recession awaits, warns Pierre Sabatier. A risk that has not yet been integrated by investors. And the latter could quickly become disillusioned in early 2023.
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Our experts’ answers to your questions
Finally, like every month, our experts answer your questions in the sequence “It concerns you”. Charlotte Thameur, consulting director of Yomoni, helps a reader who wants to save for the future of her newborn nephew and explains the advantages of intergenerational life insurance contracts for her. Nathalie Couzigou-Suhas, notary in Paris, explains on her behalf to François how she can benefit her grandchildren by limiting the donation fees to be paid. Finally, Stéphane Absolu, associate director of Pyxis Conseil, explains to Faïza how to guarantee the right to housing for her PACS partner if she were to die.
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