Love of Money
It is still called “3F: Friends, Family and Fools”, for “Friends, Family and enthusiasts”.
It qualifies as a loan to family or friends, and people who tend to finance a young start-up business.
This loan or donation model for entrepreneurs is widely used and will soon be subject to tax exemption.
On July 2, 2020, a change intended to improve intergenerational transmissions was adopted.
This amendment, with the number 1325, is part of the vote on the third amendment of the financial law for 2020.
This tool makes it possible to exclude donations made for the benefit of a loved one, and whose purpose is to serve the development of a company.
What is this? ¶
It is an exemption from transfer duties free of charge for donations of monetary value up to 100,000 euros “on the condition that this amount is allocated to the creation or development of a company with no 50 employees, managed by the beneficiary of the donation.”
Donations are made for the benefit of a third party, a relative or a close entrepreneur, with a business creation project. This value corresponds to relational savings.
This step promotes the transfer of assets between generations, against the backdrop of assistance for entrepreneurship, a way to revive the economic situation of businesses.
A favorable measure ¶
The recipient of the donation may or may not be related to the donor. He must be an individual entrepreneur or a shareholder in a company.
Currently, donations are subject to an allowance of 100,000 euros between parent and child and an allowance of 31,865 euros between grandparent and grandchild, every period of 15 years.
Outside this family circle, a gift to a close relative (nephew, niece or friend) is subject to a 60% gift tax.
This is a unique move, and its duration is limited in time, as the donation must be made between June 1, 2020 and June 30, 2021.
Note that the finance bill has not yet been submitted to the Senate.