SCPIs (civil real estate investment companies) allow you to collect income on a regular basis. The only catch is that these dividends are subject to property income tax, which is not at all good for large taxpayers.
Fortunately, it is possible to invest in SCPI shares via a life insurance contract.. This will allow investors to take advantage of more favorable taxation and gain indirect access to corporate real estate. What are the benefits of such an investment?
Invest in a SCPI
Tax exemption for property income
Investing in SCPI shares via life insurance allows you to access corporate real estate and benefit from attractive taxation. SCPIs housed in life insurance automatically benefit from its taxation.
In other words, the rents received by the shareholder will no longer be subject to the taxation of property income. This is great news for large taxpayers.
It’s by the way the management company of the SCPI which is responsible for declaring them to the tax authorities. Technically, the life insurance contract provides a tax benefit after 8 years of ownership.
You must remember that all life insurance contracts do not allow access to SCPIs and that they are affected by the “Flat tax” or the single standard levy (PFU).
Capital gain tax reduction
It is entirely possible to avoid the taxation of capital gains when reselling SCPI units. To do this, you should sell them in life insurance, invest again in another SCPI and most importantly, keep the funds of the contract taken out.
After 8 years of ownership, taxation on the scale on the taxation of capital gains and the 17.2% social security contributions apply to income received. In the event of the death of the insured, the tax advantages are even more notable, but the capital invested will be paid back to the beneficiaries (children, spouse, friends, grandchildren, nieces, association, etc.).
Strong liquidity of the units
Buying fixed capital SCPI units via life insurance can be interesting, because such an investment provides better liquidity.
Indeed, the income received is reinvested in SCPI shares. According to articles L 214-59 and L 214-62 of the Monetary and Financial Code resulting from the law of July 9, 2001, the real sale price of SCPI shares can be taken into account by a life insurance company if they cannot sell at the transfer price recommended by the manager.
In other words, the insurance company cannot guarantee the liquidity of the SCPI units subscribed via a life insurance contract. In any case, the subscription price remains reasonable and the period of enjoyment is shortened, unlike that of a live SCPI where it will be necessary to wait between 4 to 5 months before the period of enjoyment of the units applies.
In any case, an investor who has chosen to buy SCPI units via a life insurance contract must pay management fees (0.5 to 1% per year). If the saver decides to go headlong, investment returns may be reduced. The advice of a CGP (wealth management advisor) will be very useful especially for novice investors.