OUR ADVICE – The technique to transfer income from the estate to a child or association also allows you to reduce taxes. Here’s how to do it.
Unlike classic donation, where the donor gives up his property immediately, temporary donation of usufruct enables its transfer for a pre-agreed limited period. The usufructuary has the right to use, rent and receive income from the property without being the owner. At the expected end, the donor regains full ownership. This operation brings a number of tax advantages.
Income security for a loved one
It is not uncommon for parents (or grandparents) to regularly help their grown children (or grandchildren) make ends meet. This support, which is in the nature of alimony, is deductible from their taxable income up to EUR 6,368 per child per year (ie approximately EUR 530 per month). If the assistance provided exceeds this amount, it may be more appropriate to provide them with a temporary gift of a usufruct in respect of an income-producing asset such as a rental flat or a portfolio of securities. This will be a source of income…