Lawyer specialized in taxation of wine transactions

Are you considering acquiring or selling a vineyard? Are you wondering about the tax implications of transferring, donating, or restructuring your wine-growing operation? Whether you are a winegrower looking to sell your operation or an investor wishing to acquire an estate, taxation can impact your transaction. Contact our team of lawyers specialized in taxation of wine transactions for advice.

Our lawyers will guide you in analyzing your tax situation and advise you on the best practices to adopt to minimize your tax burden. We take into account the nature of the transaction (sale, acquisition, donation), the type of asset (operation, estate, shares), or the parties involved (individual, legal entity).

Lawyer specialized in taxation applicable to wine transactions for the purchase or sale of an estate

When selling a wine estate, the capital gain realized (difference between the sale price and the acquisition price) is subject to tax on real estate capital gains. The calculation of this capital gain takes into account various elements, such as acquisition costs, work carried out, and the duration of ownership of the property.

The acquisition of a vineyard estate also involves the payment of registration fees, the rate of which varies depending on the nature of the property and the region. These fees are calculated on the market value of the property and must be paid by the buyer.

In some cases, the sale of a wine estate may be subject to VAT, particularly if the seller is a VAT taxpayer and the sale is considered an economic transaction. The applicable VAT rate depends on the type of property and the seller's activities. If the net value of the seller's or buyer's real estate assets exceeds a certain threshold, they may be subject to the IFI.

Viticultural property is included in the IFI calculation, and exemptions or reductions may apply depending on the taxpayer's situation. From structuring the transaction to optimizing applicable taxes, our lawyers specialized in taxation related to viticultural transactions guide you through each step.

We intervene to analyze the applicable tax regimes (VAT, registration fees, capital gains tax) and assess the financial impacts. We also study the various possible legal structures to arrange the transaction advantageously. Whether through a sale in one's own name, via an agricultural operating company (SCEA) or a viticultural land group (GFV), we offer solutions tailored to your needs.

Lawyer specialized in taxation related to wine transactions to implement the Dutreil pact

The Dutreil pact is a favorable tax mechanism designed to facilitate the transfer and preservation of professional assets within a family, thanks to a significant reduction in transfer duties. It is particularly useful for family businesses, including vineyards, that wish to ensure their continuity while optimizing their tax situation.

The Dutreil pact: a favorable mechanism for transferring a wine-growing estate

Concretely, the Dutreil pact allows a 75% reduction in transfer taxes (donation or inheritance) on company shares or sole proprietorships. An additional 50% reduction may apply in the case of a donation of full ownership shares, provided the donor is under 70 years of age.

This favorable scheme also applies to transfers and transmissions of shares, whether carried out in full ownership or bare ownership. However, to benefit from these tax advantages, certain strict conditions must be met to avoid any dispute with the tax authorities.

What conditions must be met to benefit from the Dutreil pact?

First, a collective commitment is required: one or more partners must undertake to keep all or part of the shares they hold for a minimum period of 2 years. The donor, who must imperatively be among the signatories of this commitment, can then transfer their shares to their children. The latter must in turn undertake to keep the shares received for 4 years after the initial 2 years.

Furthermore, one of the signatory partners of the collective commitment or one of the beneficiaries of the donation must undertake to hold management functions within the company for the entire duration of the collective commitment, as well as for 3 years after the donation. It should be noted that this commitment can be put in place after the death of the manager if no anticipation was made during his lifetime.

What are the risks and pitfalls to avoid?

Despite its advantages, the Dutreil pact carries risks that must be managed. For example, if the collective retention commitment is renewed by tacit renewal beyond 2 years without being terminated, the individual retention commitment of the shares by the donee does not begin to run. In this case, the donee might mistakenly believe they can resell the shares after 4 or 6 years, whereas the individual commitment has in fact never started.

Moreover, any error in meeting deadlines or commitment conditions can lead to the loss of tax benefits and expose the parties to tax adjustments. This is why it is essential to be assisted by our lawyers specialized in taxation of wine-growing transactions to ensure their implementation.

What are the possible arrangements to optimize the Dutreil pact?

Subject to compliance with legal conditions, certain arrangements may be considered to optimize the application of the Dutreil pact. For example, the donor may be exempted from the collective holding commitment if they hold, alone or with their spouse, partner or acknowledged cohabitant, a certain number of shares for more than 2 years.

In this case, the donee must take over the management of the company after the transfer transaction. These arrangements require a fine expertise in tax rules and rigorous planning. That is why we recommend that you contact our team of lawyers specialized in the taxation of wine transactions.

Thanks to our expertise in rural law and inheritance law, we will assist you in drafting commitments and managing obligations related to management functions. In addition, we can advise you on other complementary tax mechanisms, particularly long-term rural leases, to maximize benefits for your wine business.

Specialist lawyer in taxation of wine transactions to advise you on long-term rural leases

The long-term agricultural lease is a rental contract whereby an owner makes agricultural assets (land, buildings, etc.) available to a farmer in exchange for payment of rent. The latter undertakes to operate these assets for a fixed period. Applicable to wine-growing businesses, this scheme offers significant tax advantages, particularly in terms of estate transmission.

What are the tax advantages in the event of a gift or inheritance?

With a minimum duration of 18 years, the long-term rural lease offers interesting tax optimization. Since January 1, 2019, the legislator grants the owner a substantial reduction in transfer duties (donation or inheritance) on the leased land and buildings. Thus, the value of this professional asset is exempt up to 75% up to €300,000, and 50% beyond that amount.

In the case of a simple gift, a gift-partition or an inheritance, rural property leased under a long-term lease (in full ownership or bare ownership) benefits from a 75% reduction on transfer duties up to €300,000, and 50% beyond this threshold. This reduction applies to the share received by each child and each parent, regardless of the degree of kinship between the donor and the beneficiary.

In addition, an additional allowance of €100,000 per parent and per child is applicable, renewable every 15 years. These tax advantages make long-term rural leases particularly attractive for owners of wine-growing estates wishing to transfer their assets while minimizing transfer duties.

What obligations must be fulfilled to benefit from the tax advantages?

To implement this system, it is essential to have the lease drafted before a notary. It is then renewed by tacit agreement for periods of 9 years, under the same conditions as the initial lease. Although the assistance of a competent tax lawyer is recommended, notarial drafting remains mandatory.

A period of 2 years must elapse between the conclusion of the contract and the transfer of the property, if the lease is granted:

• to the beneficiary of the transfer;
• to their spouse;
• to a descendant;
• or to a company controlled by one of these persons.

This period is calculated from the date of signing of the lease before the notary. Furthermore, the donee (the beneficiary of the transfer) must undertake to keep the leased land for 5 years after the transfer. This condition aims to guarantee the stability of the farm and prevent abuse.

What are the advantages regarding the real estate wealth tax?

In addition to the advantages related to gift and inheritance rights, long-term rural leases offer benefits in terms of real estate wealth tax (IFI). Properties leased under this type of lease are considered professional assets and therefore benefit from full or partial exemption from IFI. If the lease is granted to very close family members (spouse, ascendant, descendant, brothers and sisters), the leased rural properties are fully exempt from IFI.

This exemption reinforces the attractiveness of the scheme for families owning wine-growing operations. In case of non-compliance with the legal conditions (for example, the sale of plots before the end of the 5 years following the transfer), the tax advantages may be challenged. Our lawyers specialized in taxation related to wine-growing transactions assist you in setting up a long-term agricultural lease to secure your approach.