The French tax authorities have updated their guidelines of the new rules arising from the Amending Finance Bill for 2012 (Article 20 of Law n°2012- 1510 dated 29 December 2012), regarding the taxation of capital gains on disposal of securities distributed by a FCP.

As a reminder, the tax deferral regime provided by the Article 38, 5-1° of the French Tax Code can no longer apply to capital gains on the disposal of securities when distributed by a FCP as from 1 January 2013.

Now, capital gains on the disposal of securities distributed by a FCP are taxed under the common law system in the hands of the professional shareholders. They are included in the taxable income of the year in which they are distributed and are excluded of the long term capital gains tax treatment (BOI-BIC-PVMN-10-10-30-20130516 n°305 and BOI-BIC-PVMN-30-30-40-20130516 n°55 dated 16 May 2013).

This change is the result of the new definition of distributable income provided by the Article L.214-17-2 of the French Monetary and Financial Code.