To buy and hold their shares, investors have the choice between two vehicles: the ordinary securities account and the share savings plan (PEA).
The PEA has a significant advantage: as long as you do not make a withdrawal, no gain (capital gains realized on the sale of a security as dividends received) is not taxed. And if the withdrawals are made when the plan is at least five years old, they will be exempt from income tax. Only social security contributions, up to 17.2%, will be due.
With a securities account, a change of scene: regardless of its age, dividends and capital gains are subject over time to the single flat-rate deduction of 30%, including 12.8% tax on income (with, however, the possibility of opting for taxation at the classic scale) and 17.2% social security contributions.
On a practical level, the securities account remains more flexible because you can include any listed share, anywhere in the world. The share savings plan can only accommodate European shares (or funds).
A ceiling of 225,000 euros
A limit that can be easily exceeded through ETFs (“Exchange Traded Funds”, or “trackers”), these index funds which replicate the performance of an index: several of them, issued in Europe, are eligible for the PEA, even when they are replicating indices from other regions of the world (United States, Japan, China, etc.), or global indices.
Another limit of the PEA: its ceilings. Payments are in fact limited to 150,000 euros. But it is possible to go further with its little brother, the PEA-PME, up to 225,000 euros. This is a variation of the PEA specializing in small and medium-sized businesses. These two formulas can be combined, provided that the total of the payments does not exceed 225,000 euros.
PEA: how much are the fees capped?
Since 1er July 2020, the various costs relating to the share savings plan (PEA) and its little brother the PEA-PME are limited:
- The opening costs are capped at 10 euros.
- Transfer costs to another establishment and closing costs may no longer exceed 15 to 50 euros per line of securities transferred, depending on their nature (15 euros for listed securities, 50 euros for unlisted securities), and 150 euros in total.
- Custody fees (account maintenance fees) are a maximum of 0.4% of the value of the plan, to which may be added fixed fees per line of securities limited to 5 euros or 25 euros, depending on their nature.
- Brokerage fees (transaction fees) amount to a maximum of 0.5% of the amount of the online purchase or sale. It is 1.20% if the transaction is not carried out online.
In addition, the PEA, which is a regulated savings product, can only be opened by French tax residents, provided that they are of legal age, while the securities account is not subject to any constraint.
You should know that if it is after five years of detention that the PEA offers optimal tax conditions (exemption from income tax on earnings), it is possible to recover your money before this deadline.
But in this case, the PEA will be fully closed (except in the event of takeover or creation of a business, dismissal, disability, early retirement of the holder, his spouse or PACS partner). As soon as the PEA celebrated its fifth anniversary, partial withdrawals are however possible.
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