French General Tax Code
In forceI. - The purchase price is the price actually paid by the seller, as stipulated in the deed, it being specified that this price includes the existing property and the works in the case of a purchase made under the legal system for the sale of a building to be renovated. Where it is established that the price has been concealed, the price stated in the deed must be increased by the amount of the concealment. In the case of an acquisition free of charge, the acquisition price is the value used to determine the transfer tax. In the absence, as the case may be, of a price stipulated in the deed or of a value retained for the determination of gratuitous transfer duties, the acquisition price means the actual market value on the date of entry into the assets of the transferor based on a detailed and estimated declaration by the parties.
Where an asset has been acquired in return for the payment of a life annuity, the acquisition price used for that asset is the capital value of the annuity, excluding interest.
In the event of a subsequent sale of securities received on the occasion of a transaction mentioned in article 150-0 B, in the fourth paragraph of article 150 A bis in force prior to the date of enactment of the Finance Act for 2004 (no. 2003-1311 of 30 December 2003) or to II of l'article 150 UB, the capital gain taxable under I of article 150 UB is calculated by reference, where applicable, to the acquisition price or value of the securities exchanged, less the amount of the balancing payment received, which has not been subject to taxation in respect of the year of the exchange, or increased by the balancing payment made at the time of this exchange.
In the event of the transfer of an asset or a right mentioned in articles 150 U to 150 UD, the ownership of which is dismembered following an inheritance occurring before 1 January 2004, the acquisition price is determined by applying the scale provided for in article 669, assessed on the date of the transfer.
In the event of the transfer of an asset or right mentioned in articles 150 U to 150 UC by a trust, the acquisition price is equal to the acquisition price of that asset or right by the trust, or, where it is an asset or right transferred into the trust estate under the conditions of article 238 quater N, to the acquisition price or value thereof by the settlor.
In the event of the transfer of an asset or right mentioned in articles 150 U to 150 UC, received at the time of the transfer of the trust assets to the beneficiaries at the end of the trust transaction, the acquisition price is determined under the conditions provided for, depending on the case, in 1° or 2° of article 238 quater Q.
II. - The purchase price is, on production of supporting documents, increased by:
1° All charges and indemnities mentioned in the second paragraph of I of article 683 ;
2° Expenses relating to the acquisition free of charge defined by decree ;
3° Expenses relating to the acquisition for valuable consideration defined by decree, which the transferor may set at a flat rate of 7.5% of the acquisition price in the case of properties other than those held directly or indirectly by a property investment fund mentioned in l'article 239 nonies ;
4° Expenditure on construction, reconstruction, extension or improvement, borne by the vendor and carried out by a company since the completion of the property or its acquisition if this is later, where this has not already been taken into account for the purposes of determining income tax and is not in the nature of rental expenditure. If a taxpayer who disposes of a built property more than five years after its acquisition is unable to provide proof of these expenses, a surcharge equal to 15% of the purchase price is applied. This increase does not apply to disposals of buildings held directly or indirectly by a real estate investment fund mentioned in article 239 nonies;
5° Road, network and distribution costs in respect of building land;
6° Costs paid for the restoration and refurbishment of movable property.
