Usufruct & Bare Ownership

The distinction between usufruct and bare ownership is a cornerstone of French estate law, enriching the options for asset management and transfer. This legal separation grants one person, called the usufructuary, the right to use a property, while the formal ownership, or bare ownership, belongs to another, the bare owner. Apex Capital delves into the benefits, fiscal implications, and strategic approaches related to these concepts.

 

Essential Concepts

•Usufruct: Grants the right to use a property or derive income from it (such as living in it or receiving rental income), while the ownership is held by another person.

•Bare Ownership: Represents the right of ownership over a property, excluding usufruct. The bare owner has full ownership but cannot enjoy the property or receive its direct income.

 

Benefits of Usufruct and Bare Ownership

 

Usufructuary

•Use of the Property: Possibility to live in a property or benefit from rental income without full ownership.

•Tax Advantages: Favorable valuation for IFI (wealth tax), often lower than full ownership.

 

Bare Owner

•Estate Transfer: Facilitates passing on a property to heirs while retaining temporary usufruct.

•Tax Optimization: The reconstitution of full ownership upon the extinction of usufruct avoids additional inheritance taxes for donations or succession transfers.

 

Fiscal Implications

•IFI (Wealth Tax): The usufructuary is taxed on the value of the property in usufruct for IFI.

•Donation and Inheritance Taxes: The calculation of taxes is based on the age of the usufructuary, impacting the value split between usufruct and bare ownership.

•Income Tax: Income from the property, such as rent, is taxable to the usufructuary.

 

Strategic Approaches to Estate Management

•Succession Planning: Using usufruct to ensure income for the surviving spouse while ultimately directing ownership to descendants.

•Donation with Retained Usufruct: Transferring bare ownership of assets while retaining usage or income rights to minimize donation taxes.

Why Choose Apex Capital?

•Tailored Support: Advice and strategies adapted to your family and financial needs for enlightened estate management.

•Personalized Solutions: An individualized approach precisely addressing your aspirations and situation.

 

To conclude

Usufruct and bare ownership are valuable tools for effective asset management and transfer, offering opportunities for tax optimization and succession planning. Apex Capital, with its expertise, guides you in the strategic use of these concepts, ensuring an integrated and advantageous estate approach.

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