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Capital gains

A user’s manual for French fiscal residents only

The gain on the sale of your securities is called a “capital gain”. It is the difference between their sale amount and their purchase amount.

Your capital gain is equal to:

SHARE SALE AMOUNT
(Unit sale price
x Number of shares)

Sale transaction fees and taxes

SHARE PURCHASE AMOUNT
(Unit purchase price
x Number of shares)
+
Purchase transaction fees and taxes

=

CAPITAL GAIN OR LOSS
net of broker fees

Capital gains tax
Applicable to French residents for tax purposes

In accordance with French Finance Law, capital gains on sales realized in 2014 are subject to income tax based on a progressive scale. They may be reduced by capital losses on your portfolio incurred during the same year or capital losses that have not been deducted but were realized in the previous 10 years.

The social contributions rate remains unchanged at 15.5%. It is applied to the capital gain before deduction.

Capital gains and losses are subject to a tax deduction based on how long the shares have been held since their acquisition date:

  • 50% for a holding period from two until eight years;
  • 65% for a holding period of eight years or more.

For instance, a capital gain recorded on securities held for nine years will benefit from a 65% deduction. A capital loss recorded on securities held for five years will be subject to a deduction of 50% of its amount.

The taxpayer is responsible for calculating and declaring the net amount of the tax deduction for the holding period and the net amount after the tax deduction on French tax form 2042.