The first of the measures, which take the form of amendments to the 2009 French budget law, is aimed at facilitating the creation of partnerships between listed real estate investment trusts (SIICs - Société d'Investissements Immobiliers Cotée) and OPCI non-listed open-end funds (Organismes de Placement Collectif Immobilier).
Jointly held subsidiaries are entitled to opt for the tax treatment applied to SIICs, which are exempted from corporation tax providing they distribute a high percentage of income as dividends to investors.Laurent Modave, of lawyers Gide Loyrette Nouel, said the change allows a SIIC to transfer property assets to a subsidiary in which it and a non-listed fund together hold at least 95%.
It will also foster partnerships between several funds, whose jointly-held subsidiaries will also be able to opt for the SIIC tax regime. Dorian Kelberg, Executive Director of the FSIF listed real estate federation (Fédération des Sociétés Immobilières et Foncières), said the move will make it easier for listed companies to carry out industrial projects.
The second measure concerns mergers between OCPIs and their older counterpart funds SCPI (Sociétés Civiles de Placement Immobilier). In such cases the acquirer will be allowed to take over any commitments by the acquired company to retain property assets for a period of five years. Such commitments are a condition for a reduced rate of corporation tax. Modave said this move will remove tax disincentives to restructuring by non-listed funds.
Allan Saundersonis a managing editor of Property Finance Europe and a contributor to GlobeSt.com.Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
