Groupement Foncier Viticole [Vineyard Group]

Asset diversification
Wealth tax optimisation and transfer
Vineyard operation by a wine-maker

viticole-en

GFV: A TRIPARTITE RELATIONSHIP

  • Investors
  • Wine-maker
  • Manager

Our approach

Select independent wine estates located in large wine-growing regions, located on renowned terroirs.

Favour tenants, who are experts in their business, developing a genuine production and distribution strategy.

Groupement Foncier Viticole [Vineyard Group]

A GFV investor is a non-operating agricultural land group involved in wine making.

It connects 3 players over the long term: Investors, Wine-maker, Manager.

A limited number of investors (149 max) subscribe to the capital of a civil company.

The sole purpose of the group is to invest in vineyard assets and lease them under a long-term lease to a wine-maker.

Any direct claim is prohibited.

The wine-maker is the farmer who works the land. The company enters into a long lease with the winegrower to develop the holding in a sustainable manner.

 Wine-makers must be chosen for their technical and commercial know-how.

Collection of the rent gives rise to the distribution of income to the shareholders in cash or sometimes, by option, in bottles (conversion in kind).

Management of the company and the real estate assets is fully delegated to the manager, in return for annual management fees.

The manager is appointed in the By-Laws and deals with everything.

The shareholders are kept regularly informed of the life of their grouping and developments in their assets. They take part in all collective decisions at General Meetings, notably for the appropriation of results.

GFV partner: a long-term commitment in a civil partnership

A long-term investment

  • The investor is committed over the long term, generally over the term of the lease (18 to 25 years)
  • Resale of the shares is possible but remains subject to the existence of a consideration
  • The company does not guarantee the resale of shares

Subscribing to and being a partner of a civil partnership

  • GFVs are constituted in the form of a civil partnership. Consequently, the liability of the partners is indefinite but not joint and several
  • Pursuant to the AIFM Directive, GFVs meet the definition of FIAs. However, in application of French law – whose provisions regarding the “marketing” of shares in a civil partnership are more restrictive: any listing, canvassing, advertising, or any other form of public solicitation is expressly prohibited for a GFV

Tax treatment of GFVs

Tax provisions currently in force

Reduction in the taxable base for any free transfer (793 and 793 bis of the CGI [French General Tax Code])

Value of the exempt shares:

  • 75% up to a limit of €300,000
  • 50% above this threshold

Conditions : held for more than 2 years and retained by the beneficiary for 5 years

Donations (made before a notary) prior to 10 years will no longer have to be reported to the estate and will not be taken into account for the assessment of the exemption.

Reduction in the taxable basis (Article 885 H of the General Tax Code)

Value of shares exempt in the amounts of

  • 75% up to the limit of €101,897
  • 50% above this threshold

Effective date of the exemption:  : after 2 years of holding

Micro-regime for small real estate holdings

  • Taxpayers whose real estate income does not exceed €15k.
  • Subject to conditions, application of a fixed deduction of 30%

Standard tax regime

  • Real estate income taxable in the category of real estate income with the possibility of deducting tax-deductible charges, as well as interest on borrowings if the shares are acquired on credit.
  • Tax option irrevocable for 3 years.

Welfare contributions: 15.5%

Taxed at 19% + welfare contributions (15.5%) + specific tax if capital gains > €50k

Real estate capital gains: Deduction for length of the holding period

Total exemption after 22 years

  • 6%/year from the 5th to the 21st year
  • 4% for the 22nd year

Welfare contributions: Deduction for length of the holding period

Total exemption after 30 years

  • 1.65% /year from the 5th to the 21st year
  • 1.60% for the 22nd year

9% /year over and above 22 years.

THE RISKS ASSOCIATED WITH A GFV

A long-term investment, with no capital guarantee, with reduced liquidity

Risk of capital loss

Liquidity risk

Risks associated with partner liability

Risks associated with the wine-growing land market

Asset concentration risks

Natural and health risks