Even if it was not the main motivation of Mr

In these times of income tax or of heritage, donations to the general interest organizations appear to be an obvious solution. But to make rimer generosity with efficiency, there may be a relevant solution. Our expert CGPC (1) of this month, Philippe de Cholet, Cholet-Dupont, an associate suggested the alternative of the temporary gift of usufruct.

Without the orphans of Auteuil, Louis Gaveau would never become successful founding CEO of the SMEs of packaging from reselling a US group. When he lost his parents at the age of nine years the institution served his second family. It put him on the rails of its adult free and responsible life. Values he received allowed him to create his own business, through hard work and obsession of the product without failure. At the age of sixty-five, he converted his fortune working tool. Financially, it can afford many things. Already, as it feeds a passion for history since childhood, he took a majority stake in a company for the production of documentaries for television. But he much liquidity to place. In addition, his new situation him discover the reality of subject to wealth tax. But, above all, it does not forget moral debt which he owes to adults who have restored taste to life when the destiny had smashed it. He would therefore like to send a cheque to the orphans. The period for reporting to the ISF comes to timely its re-launch.

It has not escaped him that Act Tepa on August 21, 2007 authorizes it to allocate 75 of his gift, in the limit of 50,000 euros. But is it the only solution, or at least the most relevant

Tax benefits

Not sure, seen our earlier this month, CGPC Philippe de Cholet expert, Cholet-Dupont as an associate. For him, a little-known solution would be to apply perfectly here, is the temporary gift of usufruct. As its name indicates, it is for a limited time. Its duration is fixed in advance. During the time that it is in effect, it allows the donee of the usufruct of a well designed to provide income. The most natural illustration is that of a rental property, the beneficiary will collect rents. But a portfolio of shares can also be the case. In this case, the donor will retain ownership of the securities, but the dividends go to the cause he wants to encourage. As the gift is temporary, "the arrival of the term chosen by the two parties, the donor, says Philippe de Cholet, will find the full ownership of his property and therefore total availability".

"But, in the meantime, he continues, the tax benefits are substantial." Indeed, as a source of profit disappears, the donor reduced its taxable income. But it reduces also the base of the ISF, to the extent where, for the duration of effect of the gift, the property concerned has to be included in its Declaration of heritage.

Of course, in the form, several conditions must be met. They were set by the Act of August 1, 2003, supplemented by the tax statement on 6 November of that year. It was to contain the temptations to abuse that could be found. As the ISF is due by the tenant for life, and only him, the nus-propriétaires could take advantage of a gift of convenience, in the simple goal of making escape property to the base of the ISF. Parliament has therefore asked for border facilities. But, overall, the safeguards are not very binding.

In any event, in the case which concerns us, there is nothing wrong. The first condition is that the gift takes the form of a notarial deed. On the importance it attaches to his action, Mr. Gaveau to fold to this formality.

Three years minimum

Then, according to the texts, the gift must be made for the benefit of an organization belonging to one of the following categories: Foundation, recognized public utility association, cultural association charitable authorized to receive donations and legacies, or higher or artistic educational non-profit institution chartered. The d'Auteuil orphans are a recognized public utility Foundation. The gift will raise no difficulty.

Third, the donation must be made for a period of at least three years, period which can then be extended for a shorter period. "Moreover, says Philippe de Cholet, the gift must be on assets contributing to the achievement of the purpose of the recipient organization, either by a financial contribution or by a material contribution. Finally, it must safeguard the rights of the usufructuary.

Tax plan, the temporary gift of usufruct has therefore two benefits:

-given revenues temporarily only through more sheet of return of the person who gives; Therefore, the basis of calculation of the income tax and the tax shield is lowered so;

-the property that is the source of these revenues out of the base of taxation in respect of the ISF.

Even if it was not the main motivation of Mr. Gaveau, this argument the won't not indifferent.

FRANCOIS BROWN