Good news and questions
The provisions of the 2022 finance law in terms of adjusting the exemption of capital gains from the sale of companies are very good news for lawyers. All the main devices are concerned, namely those of article 238, quideciesthe general tax code, article 151, septiesA, for professional capital gains and that of article 150-0, D, ter, for the capital gains of individuals. Even if all lawyers do not have the chance to sell or transfer their practices, those who are affected by these measures will be numerous.
Also included in the 2022 finance law is the possibility of tax deducting the accounting depreciation of business assets acquired between 1er January 2022 and December 31, 2025. This measure is intended to be temporary and is part of the context of the end of the health crisis. Does it apply to the lawyer’s liberal fund? We will try to provide some answers.
In the wake of the finance law, the law in favor of independent professional activity was promulgated on February 14, 2022. The flagship measure of this text is the new status proposed for individual entrepreneurs. The main objective of the text is to simplify the procedures for protecting the personal assets of the individual entrepreneur and to erase the relative failure of the EIRL. Article 7 of the law gives the government one year to take the ordinances necessary to adapt these measures to the particular context of the regulated liberal professions. We will be able to wonder about the interest of this device for the lawyers whereas those are more and more followers of the passage in company.
Capital gains: a tangible improvement for lawyers
Among the new provisions, it is undoubtedly the raising of the thresholds of article 238 quidecies which will most improve the fate of assigning lawyers and transmitters of their firms.
The finance law for 20223 therefore provides for the raising of the exemption thresholds in terms of capital gains realized on the sale of a business or a complete branch of activity. The threshold for benefiting from total exemption, which was €300,000, increases to €500,000 and the threshold for benefiting from partial exemption increases from €500,000 to €1,000,000. The exemption covers both tax (12.8%) and social security contributions (17.2%).
A look at the Interfimo study4 (even if the latest dates back to 2017) confirms the impact that raising this threshold will have for law firms. Indeed, the Interfimo statistics relate to the last 100 operations financed by this establishment. If we assume that this sample has representative value and that the transferors meet the conditions required for the application of Article 238 quidecies, we observe that 71% of the transactions financed would be affected by the total exemption and that 40% of these transactions would have benefited from the increase in the total exemption from €300,000 to €500,000. This observation is based on the turnover of the firms sold and on the fact that the average sale value is between 50 and 60% of the annual turnover.
Unlike professions whose…