Tax on what you own: You pay when you cash in, not before

You buy a share for one hundred euros. A year later, it is worth one hundred and fifty.

You have gained fifty euros. And for now, you owe nobody anything.

As long as you do not sell, the gain only exists on the screen. It is called unrealised.

The day you sell, it becomes real. And that is the day the tax arrives.

Say thirty per cent. On fifty euros of gain, fifteen go to tax.

Note what that means: holding for a long time pushes tax back. And tax pushed back keeps working for you.

Dividends do not give you the choice. They are taxed in the year you receive them.

One thousand euros of dividends, thirty per cent: three hundred euros of tax, straight away.

It is one of the reasons many funds reinvest dividends instead of paying them out.

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In France, this investment income has a single rate: the flat tax, around thirty per cent.

Part of it is income tax. The rest is social charges. Both change with the law.

You can also choose the opposite option: add these gains to your other income, on the tax scale.

It only makes sense if your tax rate is low. And the choice applies to the whole year, not line by line.

With a rate of zero or eleven per cent, the scale can cost less. Above that, almost never.

One last idea: some taxes reward patience.

For a property that is not your main home, the tax on the gain falls with each year you hold it.

After twenty-two years, income tax disappears. After thirty years, social charges do too.

And the main home is exempt from day one. It is the biggest tax gift in the country.

Three ideas to keep. You are taxed when you cash in, not when you get richer on paper.

Dividends are taxed straight away, capital gains only when you sell.

And time often brings the bill down. One more reason not to sell for nothing.