The company that is not taxed

Two partners hold, in a property partnership, a commercial unit let for 24 000 € a year. The company files a return but pays no tax at all: they pay it, each on their own share. Before you read on: which of the two will have to fill in an extra schedule, and which will only have a box to tick?

The company files, the partners pay

For an unfurnished letting, the property partnership must file a 2072 return, but it is the partner who owes the tax on the profits, according to their share of the company's result.

The official wording speaks of translucency. Where they are not subject to corporation tax, the companies referred to in article 8 of the general tax code are treated as translucent: they file without being taxed.

The return is filed each year, for the rents received the previous year, on the same spring deadline as the other returns: the second working day following 1 May. It takes the form of a full 2072-C or a simplified 2072-S depending on the case.

The result is then split between the partners, in proportion to their shares. Each carries it into their own property income, and the tax applies at their personal rate, without the company paying any of it.

When the partner fills in a 2044

A partner who holds nothing but shares in property companies not subject to corporation tax does not have to fill in a 2044 return. They report their share directly on their income tax return, under property income.

Holding an unfurnished let dwelling directly does the opposite: it opens the micro-foncier regime, which excuses the 2044 and has the combined rents entered in box 4BE. It is outside the micro-foncier regime — threshold passed, or a special scheme — that a 2044, or a special 2044, becomes necessary, in the paragraph provided for it.

The micro-foncier regime is not open to a partner as a matter of principle. It applies as of right where three conditions are met: the partner also owns at least one unfurnished let dwelling directly, no dwelling falls under a special scheme, and their gross income, share included, does not exceed 15 000 €.

The micro-foncier regime excuses the 2044 filing and applies a 30 % allowance, representing expenses. The two regimes, micro-foncier and actual, are mutually exclusive: they cannot be mixed.

Losses, and the capital gain on resale

A loss-making year passes through to the partner. They deduct from their overall income, within an annual limit of 10 700 €, their share of the loss arising from the property partnership, with higher ceilings existing for certain schemes.

On resale, the property belonging to the company, the capital gain is computed from the dates on which the company acquired and sold it. It stays taxable in the name of each partner present at the sale, in proportion to their shares.

The regime is the one for private individuals. The gain is subject to income tax at 19 % and to the social levies on investment income at 17.2 %, and benefits from the allowances tied to the length of ownership.

Full exemption comes at the end of the road. A property held for more than twenty-two years is exempt from income tax on the property capital gain, the social levies following a longer allowance timetable of their own.