Capital gain on disposal
For the vendor, the operation results in the disposal of one of its assets at a value that usually differs from the Net Book Value (NBV).
reminder // the net book value of real estate asset corresponds to:
Transferring the real estate asset out of the vendor’s ownership means determining the taxable capital gain on disposal. This capital gain corresponds to the difference between the selling price and the above-mentioned net book value.
This transfer is subject to corporation tax (CT) under ordinary law.
A real estate asset purchased on 1 July 2001
Net Book Value (NBV): ?
= € 10 M - [(€ 270 K x 180 / 360) + € 270 K x 12 + (€ 270 K x 345 / 360)]
= €10 M - (€135 K + €3,240 K + €258.75 K)
= €3,633.75 K
In the case of an insured loss or a compulsory purchase, the capital gain is determined not in relation to the selling price, but to the compensation received. In order to take account of the specific environment of the operation, the capital gain can be spread over the average depreciation term already applied to the asset that has been destroyed or compulsorily purchased, over a maximum period of 15 years (Article 39 quaterdecies 1 ter of the FTC).
This applies solely to compulsory purchases as such, and to amicable disposals occuring after a declaration of public interest.