Thursday, 3 February, 2011

Jersey Companies Now Exempt from Real Estate Tax in France.

In March 2009 Jersey and France signed a Tax Information Exchange Agreement ("TIEA"), since then negotiations have developed bringing significant advantages to Jersey-based real estate owning structures.

One of the key benefits of the TIEA with France is that Jersey investment funds and other real estate holding structures will qualify for exemption from the French 3% real estate tax, which is assessed annually on the fair market value of the real property situated in France.

The exemption also extends to interests, share and units in certain intermediate structures holding French real estate assets.

The agreement results in the following vehicles being exempted from the 3% French tax in respect of real estate interests in France:

  • Jersey limited partnerships owning property in France where the General Partner is a Jersey Company
  • Jersey companies directly owning real estate in France, including those companies which are trustees of Jersey or other trusts, as well as unit trust structures
  • Non-Jersey companies where it is possible for the registered office address to be in Jersey
  • Other Jersey vehicles such as the Foundation with a registered office presence in Jersey

To obtain the 3% relief it is still a requirement to file an annual return noting the residence of the investors and the current fair market value of the property.

Jersey has TIEA's and/or comprehensive Double Taxation Agreements in place with over a dozen countries including the USA, Canada, the UK, Netherlands, Denmark, Finland, Greenland, Iceland, Norway, Sweden, Germany, Ireland, Australia, New Zealand, Portugal, Estonia, Turkey, Malta, Indonesia and Mexico. Discussions are underway with Spain and Italy, amongst others.

If you require any further information about this topic please contact Rob Lucas  in Jersey on +44 (0) 1534 504742.

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