Art collections and the French IFI: outside the base, except through real estate

A company holding works and real estate: the ratio

A collection held through a company (French civil company, real estate company or SCI, holding company, foreign company) does not change in nature: the works remain outside the base. But the company's shares become taxable as soon as it also holds, directly or through subsidiaries, real estate that is not used in an industrial, commercial, craft, agricultural or professional activity.

• The calculation. The value of the shares, determined under article 973, is multiplied by a ratio equal to the market value of the taxable real estate divided by the market value of all the company's assets (CGI, art. 965, 2°; BOI-PAT-IFI-20-20-20-10, § 80 and 90). The works therefore sit in the denominator: the more the collection weighs in the assets, the lower the ratio.
• What the ratio cannot do. The taxable value of the shares may not exceed either their market value or the value of the company's taxable real estate less the related debts, in proportion to the taxpayer's rights (CGI, art. 973, IV). The collection dilutes the ratio; it does not make the property disappear.
• Entities without legal personality. Real estate held through an entity without legal personality, such as a French joint venture (société en participation), is treated as held directly (BOI-PAT-IFI-20-20-10, § 70). A registered civil company falls under article 965, 2°.
• Minority holdings. Shares in companies carrying on an industrial, commercial, craft, agricultural or professional activity held at less than 10% of the capital and voting rights are, as a rule, excluded, unless in particular the taxpayer controls the company holding the property or the household reserves its use (art. 965, 2°). This does not apply to a private collection company, which has no operating activity.

Debts and current accounts: what the tax authority takes into account

• A debt that financed works of art is not deductible. For an individual, only debts relating to taxable assets are deductible: acquisition, works, taxes on the property and acquisition of taxable shares (CGI, art. 974, I). A loan taken out to buy a painting therefore does not reduce the IFI, any more than buying the painting increases it. A company's liabilities are governed by article 973, dealt with below.
• In a company, debts unrelated to real estate are disregarded. When valuing the shares, the company's debts that do not relate to a taxable asset are not taken into account (CGI, art. 973, IV, introduced by the 2024 finance law). The shareholder current account that financed the purchase of the works is thus added back to the value of the shares before the ratio is applied, subject to the caps described above (BOI-PAT-IFI-20-20-20-10, § 90 to 105).
• Family loans are neutralised. Debts owed by the company to the taxpayer or the household for the acquisition of a taxable asset are also disregarded when valuing the shares, as are, under conditions, debts owed to relatives or to companies they control (CGI, art. 973, II). For loans from the taxpayer or a company the taxpayer controls, it remains possible to show that the loan was not taken out mainly for tax reasons; for loans from relatives, the taxpayer must show that the terms were normal. See deductible debts for the IFI.
• Above EUR 5 million of taxable assets. Where taxable assets exceed EUR 5 million and deducted debts exceed 60% of that value, the excess is only deductible up to 50%, unless the debts were not taken out mainly for tax reasons (CGI, art. 974, IV).

Home, storage, SCI, foundation: where the tax lies

• The home. The house or flat where the collection is displayed is taxable like any property. If it is the main residence held directly, its market value is reduced by 30% (CGI, art. 973, I). This allowance does not apply to shares in a civil company managing or investing in real estate, even where the company's property is the taxpayer's main residence; the only exception concerns companies under article 1655 ter of the Tax Code, whose members are deemed to own their dwelling directly (BOI-PAT-IFI-20-30-20, § 50).
• Storage. Premises bought to store and conserve the works are taxable real estate if owned by the household or by a company in which it holds shares. Renting storage space, in France or in a free port, creates no real estate asset.
• Galleries and business use. A building used in a dealer's or gallery owner's main business may be exempt as a business asset, under the conditions of article 975: see business assets and the IFI. A private collector who displays a collection does not, for that reason alone, carry on a business.
• Foundations and endowment funds. A building transferred to a public-interest foundation or an endowment fund leaves the household's estate and therefore the IFI, since only individuals are liable. The transfer is irrevocable and the entity must pursue a public-interest purpose: family occupation is only conceivable on normal terms consistent with that purpose, and if the donor keeps the usufruct or a right of use, the property remains taxable in the donor's hands as a rule, subject to the exceptions of article 968 CGI. See foundation or endowment fund.

Frescoes, panelling, statues in niches: when the work follows the building

For the IFI, the tax authorities treat as real estate the property that is immovable by nature within the meaning of articles 518 et seq. of the French Civil Code, including fittings that form part of the buildings (BOI-PAT-IFI-20-20-10, § 10 and 30). A mural, a painted ceiling or panelling built into the structure forms part of the building: its value is included in that of the house.

The Civil Code goes further. Movable items that the owner has attached to the property permanently are immovable by destination (art. 524). They are deemed so when sealed with plaster, lime or cement, or when they cannot be removed without being broken or damaged; paintings and other ornaments are deemed so when the panel on which they are fixed forms part of the woodwork, and statues when placed in a niche made specifically to receive them, even if they can be removed without damage (art. 525).

No IFI-specific text or administrative guidance expressly deals with property immovable by destination. Prudence suggests assuming that a work attached in this way will be included in the market value of the building, since a buyer of the house would acquire it with the house. To our knowledge, there is no IFI-specific case law on the point, which is assessed case by case. In practice: document that fixings are removable, avoid sealing a valuable work without planning for it, and list such items separately in the inventory and in the deed when the house is sold or transferred.

Lending a work: no effect on the IFI, effects elsewhere

A work lent or deposited with a museum remains the lender's property and remains outside the IFI base, as it was at home. The loan therefore has no effect of its own on this tax. It does have effects elsewhere, which should be organised in the loan agreement. For a work held by a company, its value remains in the denominator of the ratio, lent or not.

• Insurance and value on death. For French inheritance tax, the value of works of art may not, absent proof to the contrary, be lower than that stated in theft or fire insurance policies in force on the date of death, taken out by the deceased, the spouse or their predecessors less than ten years before (CGI, art. 764, II). The agreed value in a loan agreement is not a policy of the deceased within the meaning of that text, but it may in practice be compared with other valuations: it is better kept consistent with the owner's inventory and policies.
• Payment in kind (dation). The IFI, like gift and inheritance tax, may be paid by handing over works of high artistic or historic value, subject to approval, where the amount offered in this way is at least EUR 10,000. The offer is inadmissible for property held for less than five years, unless received by gift or inheritance (CGI, art. 1716 bis). See payment in kind with works of art.
• Donating a work to a museum or public-interest body. An individual who donates a work to an eligible body may benefit from the income tax reduction of article 200 of the Tax Code, equal to 66% of the gift up to 20% of taxable income, without consideration in return and on production of supporting documents; gifts of works of art are accepted where ownership is transferred, at their actual value when handed over (BOI-IR-RICI-250-20, § 40 and 50). The IFI reduction of article 978 only covers gifts of cash and of shares admitted to trading on a regulated market: donating a work does not qualify.
• Donation by a company. Where the work belongs to a company subject to tax, the corporate sponsorship reduction applies, and a gift in kind is valued at the cost price of the item given, not at its market value (CGI, art. 238 bis, 1).

The wealth-holding company tax and the collection

The 2026 finance law created an annual 20% tax on certain luxury assets held by wealth-holding companies (CGI, art. 235 ter C). It is only due where three conditions are met: assets of at least EUR 5 million, control of at least 50% of the voting or financial rights by an individual, alone or with the family circle, or de facto decision-making power, and passive income exceeding 50% of the year's income. It only applies to the assets on the statutory list, for financial years ending on or after 31 December 2026. For a collection held through a holding company, the firm's answer is as follows: "In principle, no. Works of art and collectors' items are not targeted as such by the list in section II of article 235 ter C. An object that by its nature qualifies as jewellery or precious metal (antique jewellery, a gold piece of silverware, for example) remains taxable, unless displayed in a place open to the public or to employees. Works of art also count towards the EUR 5 million total-asset threshold."

On the IFI side, article 975, VII exempts the shares referred to in article 965, 2° where the company was subject to that tax for the financial year ended in the year before 1 January, that is, at the earliest, for the 2027 IFI. Since such shares are only taxable for the IFI in proportion to their real estate fraction, the exemption only operates on that fraction: it brings nothing to works of art, which are not in the base. Details on the holding company tax page and on the interaction between the tax and the IFI.

Two decisions that bear on collections and the IFI

Court of Cassation, plenary assembly, 15 April 1988, no. 85-10.262. Frescoes detached from the disused church of Casenoves had been sold. The Court holds that only movables placed by the owner for the service and operation of the land, or attached to it permanently, are immovables by destination, and that frescoes torn from their support, immovables by nature while they adhered to it, became movables through their removal. It quashes the judgment that had treated them as immovables by destination. The decision is not a tax ruling, but it draws the line the IFI follows: while the decoration adheres to the building, it is part of the property; once detached, it is a movable outside the tax base. Text of the judgment (Court of Cassation, in French).

Court of Cassation, commercial chamber, 26 November 2025, no. 23-23.086. A managing partner of a family SCI, usufructuary of its shares, had a debit current account in the company when he died; his heirs had deducted it from the estate and from the 2015 ISF (the former wealth tax). The Court upholds the tax authority's refusal of the deduction: the debt had been granted by the deceased to his heirs through the company, which could be treated as an intermediary under article 773, 2° of the CGI. The ruling concerns the ISF and the deceased's debt, not the current IFI, but it is a reminder that a current account in a family company is read through the company. Text of the judgment (Court of Cassation, in French).

Six situations where the collection effectively ends up in the IFI

• The SCI holding both the house and the collection. The shares are taxable on the real estate fraction; if the house is the main residence, the 30% allowance is, as a rule, lost; and the current account that financed the works no longer reduces the value of the shares. The structure was often chosen for succession or management reasons: it should be reviewed against article 973 as currently worded.
• The mixed holding company. A holding company combining securities, cash, a collection and a property made available to the family is taxable on the real estate fraction; the property occupied by the family is not used in an operating activity and benefits from no exclusion. The holding company tax may be added for a dwelling reserved for the family.
• Life insurance invested in real estate units. The surrender value of redeemable life insurance policies and of capitalisation bonds or contracts in units of account is taxable up to the fraction representing taxable real estate assets (CGI, art. 972). A policy invested in art funds or non-real-estate securities is not; a policy invested in real estate funds is, even if taken out to "diversify" a collection.
• Works sealed or built into the decoration. Frescoes, fixed decoration, statues in niches: see above. Fittings designed to display a work may make it part of the building.
• Refinancing a current account through the building. Having an SCI repay the current account that financed the works with a bank loan presented as a "real estate" loan does not reduce the value of the shares: a company debt that does not relate to a taxable asset is disregarded (CGI, art. 973, IV), related debts being those for the acquisition, works or taxes of the property (art. 974, I).
• Moving to France. A person who was not tax-resident in France in the five calendar years before moving there is only taxable on real estate located in France, until 31 December of the fifth year following the year of arrival (CGI, art. 964, 1°). A collection is not concerned in any case, but a foreign property housing it enters the base at the end of that period.