An ordinary family group. A trading company, and a property subsidiary which owns the house occupied by the plant manager and lets it to the trading company. For thirty years, no one questioned that the house served the business. Since 21 February 2026, an allocation test applies, and it is assessed at the level of the company that owns the asset, not at the level of the group. A property subsidiary carries on no eligible activity.
The Finance Act for 2026 amended the Dutreil pact, the regime which exempts 75% of the value of shares transferred by gift or on death from French inheritance and gift duties, on two points. The 75% rate is untouched. The family buy out and the deemed collective undertaking have been preserved.
Those two amendments nevertheless require, ahead of every transfer, that the assets of the transferred company and of every company it controls be broken down. The fraction of value that falls outside does not benefit from the exemption. It remains liable to inheritance and gift duties under the general rules.
This is the provision with the heaviest consequences, and the one least commented upon.
The exclusion catches the assets listed in the statute where they appear on the balance sheet of the company being transferred. It also catches them where they are held by a company which that company controls, directly or indirectly, within the meaning of article 150-0 B ter, III, 2° of the French Tax Code. A house, a wine cellar or a yacht held by a subsidiary therefore does not escape the exclusion merely because it does not appear on the balance sheet of the company whose shares are transferred.
And the exclusive allocation test is assessed by reference to the activity of the controlled company which owns the asset, not that of the group.
This point decides everything. Is a house held by a property subsidiary, and let to a sister trading company, exclusively allocated to the eligible activity of the company that owns it, when that company carries on no industrial, commercial, craft, agricultural or professional activity at all? The question is not theoretical. It describes the most ordinary structure of family groups, the one that ring-fences real estate in a separate property company.
No group can know its exposure without having worked back, company by company, through the composition of its assets and the nature of its activity.
The list set out in article 787 B of the French Tax Code is exhaustive. It covers assets used for hunting, assets used for fishing, passenger vehicles, yachts, sailing and motor pleasure craft and aircraft, jewellery, precious metals and works of art, collectors' items and antiques, save for those benefiting from the regime of article 238 bis AB of the same code, racehorses and competition horses, wines and spirits, and finally dwellings and residences.
Two of the assets caught, the passenger vehicle and the dwelling, are in no sense luxuries in most family companies. The statute draws no distinction according to their value.
Since the list is exhaustive, whatever is absent from it remains within the exempt base: cash, securities, shareholdings, office premises, digital assets. That observation calls at once for a caveat. Cash escapes the new exclusion, but a company whose assets consist largely of investments risks no longer carrying on an eligible activity as its principal activity, since a company's management of its own securities or property portfolio is not an eligible activity. In that event it is no longer a fraction of the exemption that falls away, but the regime in its entirety.
The exclusion is not automatic. It applies only where the asset is not exclusively allocated to the eligible activity.
But allocation is not assessed on the day of the transfer. The statute requires it to be established for at least three years before the transfer, or since the asset was acquired if more recent, and then maintained until the end of the individual retention undertaking, or until the asset is sold.
A balance sheet is therefore not tidied up before the gift. It is tidied up three years beforehand, or not at all.
There remains the question of what happens if allocation ceases after the transfer, while the individual undertaking is still running. The duties have been assessed and the exemption granted. The statute does not state the sanction for such a breach. The general mechanism by which the regime is called into question, a reassessment of duties together with late payment interest, is apt to apply to the corresponding fraction. No administrative commentary has confirmed this to date.
The statute excludes a fraction of the market value of the shares, representative of the value of the assets concerned. It does not say how that fraction is to be determined.
Is the value of the assets to be set against the gross value of the company's assets? Must the company's liabilities be broken down and allocated to the excluded assets? Do a yacht bought on credit and a yacht paid for outright produce the same effect on the duties?
In the absence of any statutory rule, commentators contemplate transposing the method used for interposed companies, which is based on the true value of gross assets. They observe at the same time that such a transposition leaves unresolved the treatment of the debts attaching to the excluded assets.
The exercise must nevertheless be carried out now, for every transfer occurring since 21 February 2026, and the burden of proof lies on the taxpayer.
The individual retention undertaking increases from four years to six.
The extension is not merely a liquidity constraint for the recipients. The eligible activity must be maintained throughout the undertakings. That means two further years during which the company must remain what it was, and two further years during which that must be capable of proof. The certificate to be sent to the French tax authorities at the end of the undertaking is deferred by the same period.
For a group contemplating a partial disposal, a change of activity or a reorganisation, the horizon changes in nature.
Which of the listed assets appear on the balance sheet of the company being transferred, and on that of each company it controls. What activity, precisely, each of those companies carries on. For how long each asset has been exclusively allocated to that activity. What can be proved, and by what documents. What fraction of the value of the shares will fall outside the exempt base, and on what method.
These five answers determine the amount of duty. None of them is to be found in the statute.
Since February 2026, a Dutreil transfer calls for an audit of the assets of every company in the group, begun three years before the deed.
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