Indeed the gift is serving unrealised gains

You hold a portfolio of securities that you intend to give to your children No problem, but have you checked whether it was preferable to portfolio or selling the securities that make it up to then proceed with the donation of the transfer price Will the solution to retain of course objectives but also depend on other elements.

If the securities of the portfolio are in high added value, it is preferable to give securities instead of selling, pay the tax on capital gains and then give the transfer price. Indeed, the gift is serving unrealised gains.

On the other hand, if the portfolio shows of losses, the donor has an interest in assign titles directly to identify these writedowns, which will be chargeable on the gains that he could make. The donation will then focus on the transfer price.

Fee or not

Will the gift bring on the full property or the only nue-propriété, the donor then reserving the usufruct of the given property If the proposed donation covers the full ownership, the donor's interest to sell securities to give the transfer price to take advantage of the discount specific gifts of money. Must the gift meet the legal requirements (age of the donor and donee, relationship between them).

If the gift is on the nue-propriété, the question does not arise, but precautions are necessary. It is necessary to determine which of the sub-lessees or of the life tenant shall have the right to manage the portfolio of selling the securities to securities and reinvestment. Normally neither the sub-lessees nor usufructuary can dispose only of full ownership. However, the Court of cassation, in November 12, 1998 Baylet, considered that a portfolio of securities was a "universality", allowing the life tenant to dispose of the securities subject to replace within the portfolio, in order to retain the substance and to inform the sub-lessees.

Apparent freedom

This decision gave freedom of apparent management the life tenant, although everything is not so simple. How to analyze the obligation to retain the substance The life tenant should observe the same management direction or have total freedom These issues are not resolved, it is preferable to resolve conventionally at the time of the gift.

And if the life tenant and the sub-lessees together conveyed full ownership of securities, in which the sale price will be given If nothing has been provided, the transfer price will, in application of the civil Code, distributed between the life tenant and the sub-lessees in proportion to their respective rights. But conventionally may decide otherwise.

Thus the transfer price can be re-employed in the acquisition of other property (real estate, for example) to be itself dismembered. It may also decide to leave the whole of the transfer price to the usufructuary, who then has a quasi-usufruit capital. The life tenant becomes, somehow, full owner of the capital which he may freely dispose. There again, it is preferable that the hypothesis of a joint assignment was considered at the time of the gift and the fate of the fixed transfer price, especially since, from a tax point of view, the choice is not neutral, as the person liable to tax differs according to the option.