PEA and Capital Increase: Be Aware of the Payment Condition

In 2001, a taxpayer acquired 392 shares of a company. On the same day, a capital increase took place, resulting in the issuance of 12,000 shares, of which 1,176 were acquired by the taxpayer in accordance with his preemptive subscription right. A further capital increase took place one month later, allowing him to acquire an additional 4,505 shares. Finally, he purchased 774 shares from a third party in 2003.

He sold his shares in 2015, believing that the capital gain realized on the shares acquired during capital increases—which had been invested in his PEA—should be tax-exempt.

Following a tax audit,administration this interpretation, arguing that the taxpayer had not made a contribution to the PEA used to acquire the shares.

The Administrative Court of Appeals, to which the dispute was referred, first notes that it is undisputed that the shares acquired as part of the first capital increase were purchased through a transfer from the taxpayer’s PEA cash account. It finds that the acquisition of these shares through a preemptive right arising from the holding of shares not registered in the PEA has no bearing on the tax exemption regime.

She will nevertheless note that the shares acquired as part of the second capital increase—which had also been registered in the PEA—were allocated to the taxpayer free of charge.

The Court finds that the inclusion of an issuance premium, which made this capital increase possible, does not establish that a payment was made in connection with the acquisition of these shares.

It then determines that this failure to make a payment constitutes a breach that results in the closure of the PEA as of the date of the breach.

Since the PEA had been closed since 2001, the taxpayer could not claim an exemption from capital gains tax on the sale of the securities that he mistakenly believed were held in the PEA.

The Court therefore upholds the tax assessment.

CAA Toulouse, June 25, 2026, No. 24TL00845

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