Since the termination of the French-Swiss inheritance and gift tax treaty took effect on January 1, 2015, transfers of assets involving France and Switzerland require particular vigilance. Without proper planning, the tax burden can be considerable, with transfer duties on gifts reaching up to 45% between parents and children and 60% between third parties.
However, a transfer may be subject to French taxation even when the company or its shareholding structure has strong Swiss ties. This is particularly the case when a business owner residing in Switzerland transfers a French or Swiss company, whilst one or more heirs, legatees or donees reside in France, or when a French resident transfers a Swiss company.
In this context, the scheme set out in Article 787 B of the French General Tax Code remains, to date, the best tool for business succession planning. Its significance remains considerable: subject to compliance with strict conditions, it allows for a 75% exemption on the value of the shares transferred.
The reform introduced by the 2026 Finance Act has not called this framework into question. It has, however, tightened the conditions and made the scheme more technically complex.
The first change is that the reform excludes certain assets from the scope of the scheme. Until now, provided that the company was primarily engaged in an eligible activity, the partial exemption was intended to cover the full value of the transferred shares, even where certain assets were not directly allocated to the operational activity (provided that such assets were not predominant). Going forward, certain assets may be excluded from the scheme if they are not exclusively used for the eligible activity.
The conclusion is clear: the Dutreil scheme is now stricter, more technical and more demanding in terms of compliance monitoring. However, when properly prepared and structured, it has lost none of its effectiveness.
Fortunately, the legislation sets out an exhaustive list of the assets concerned: assets dedicated to hunting or fishing, passenger vehicles, yachts, pleasure boats and aircraft, jewellery, precious metals, works of art, collectors’ items and antiques, racehorses or competition horses, wines and spirits, as well as dwellings and residential properties. Other assets are therefore not affected. However, when an asset falls within one of these categories, the assessment becomes more rigorous, particularly as the law itself does not specify the method for calculating the applicable pro rata share.
Above all, this new requirement is not assessed solely on the date of the transfer. The exclusive allocation of these assets to the eligible activity must be demonstrated throughout a prior period – in principle, three years – and must then continue after the transfer until the end of the individual holding commitment or until the disposal of the asset. In practice, this requires a more detailed review of the composition of the assets and their allocation, including, where applicable, at the level of controlled subsidiaries and sub-subsidiaries.
Second change: the duration of the individual holding commitment is extended from four to six years for transfers carried out on or after 21 February 2026. As a result, the minimum overall commitment period now effectively extends to eight years. This change lengthens both the constraints imposed on beneficiaries and the period during which compliance with the scheme’s conditions must be demonstrated. Since 2022, the eligible business activity must be maintained throughout the entire holding period. This requirement is particularly significant when the company is an active holding company (“holding animatrice”).
The conclusion is clear: the Dutreil scheme is now stricter, more technical and more demanding in terms of compliance monitoring. However, when properly prepared and structured, it has lost none of its effectiveness.
This is precisely why the period extending roughly until the end of the first half of 2027 represents a key moment: with the presidential election approaching, followed potentially by a post-election budget bill, it is not unreasonable to expect that business succession planning and preferential tax regimes could once again become subjects of political debate.
In these circumstances, the right approach is neither haste nor delay. It is anticipation. Business owners and families concerned should now verify whether the company or group is eligible for the scheme, identify the assets that could affect the exemption, compile the necessary documentation and, where the conditions are met, consider implementing a Dutreil gift transfer before the end of the year and, in any event, before any potential legislation in 2027 that might alter the rules.
Ultimately, although the conditions of the Dutreil scheme have become more restrictive, it remains the most effective tool for transferring a business, whether in a purely domestic French context, a French-Swiss context or an international one. It is precisely because it remains unrivalled that it must be implemented rigorously and without delay.
Jérôme Bissardon
Partner, Paris
Member of FBT’s Tax Law & Corporate and Commercial Law groups
