Business succession · French Tax Code (CGI) art. 787 B and 787 C

The Dutreil pact: passing on the family business in 2026

The Dutreil pact exempts from gift or inheritance duties 75% of the value of the shares of an operating company, or of a sole proprietorship, transferred under holding commitments. Since the 2026 Finance Act, the individual commitment lasts six years and certain assets not used in the business are excluded. The 2027 Finance Bill does not touch the pact. The firm has set out its position on the pact’s future in an op-ed published by Le Monde (in French); estimate your transfer with the Dutreil simulator (in French).

Have my Dutreil pact reviewed Dutreil simulator
Op-ed by the firm in Le Monde, 15 September 2026 · Paris · Geneva · Marseille · Cannes · Lisbon

What is the Dutreil pact?

The Dutreil pact is the regime of article 787 B of the French Tax Code (CGI): the shares of a company whose main activity is industrial, commercial, craft, agricultural or professional (liberal), or of an active (animating) holding company of such a group, are exempt from gift and inheritance duties up to 75% of their value, when they are transferred by gift or on death under holding commitments. Article 787 C provides the same exemption for a sole proprietorship.

Three conditions lie at its core: a collective commitment to hold the shares for at least two years, still running on the day of the transfer; an individual commitment by each heir or donee to keep the shares for six years after the end of the collective commitment (four years before 21 February 2026); and the exercise of a management function by a signatory or a beneficiary during the collective commitment and the three years following the transfer. A gift in full ownership by a donor under 70 also gives entitlement to a 50% reduction of the duties (article 790).

CGI art. 787 B (Légifrance); CGI art. 787 C; CGI art. 790; BOI-ENR-DMTG-10-20-40-10 (BOFiP). Checked on 5 October 2026.

— In brief
Benefit
Exemption of 75% of the value of the shares transferred (CGI art. 787 B), sole proprietorships included (art. 787 C)
Commitments
Collective: at least 2 years, still running at the transfer; individual: 6 years thereafter, i.e. at least 8 years from the signature of an ordinary pact
Management
A signatory or a beneficiary manages the company during the collective commitment and for 3 years after the transfer
2026 reform
The fraction of the value of the shares that represents so-called « luxury » assets not used in the business is excluded, and the individual commitment is extended to 6 years, for transfers since 21 February 2026
Gift
50% reduction of the duties for a gift in full ownership before age 70 (art. 790)
2027 budget
The Finance Bill does not amend the pact; it targets the contribution-and-disposal regime
01

The conditions of the Dutreil pact

The exemption applies to the shares of a company whose main activity is industrial, commercial, craft, agricultural or professional (liberal). The management by the company of its own movable or real estate assets is not an eligible activity: unfurnished letting, furnished residential letting and the management of a securities portfolio are excluded, for transfers made since 17 October 2023. This activity condition must be met from the signature of the collective commitment until the end of the individual commitment; where the pact is concluded after a death, from the transfer, and where the commitment is deemed to exist, for at least two years at the date of the transfer.

  • Collective holding commitment of at least two years, entered into by the donor or the deceased with other shareholders, or alone (unilateral commitment), and still running on the day of the transfer. It covers at least 17% of the financial rights and 34% of the voting rights of an unlisted company (10% and 20% for a listed company), thresholds to be met throughout its term;
  • Commitment deemed to exist where the manager holds, alone or with their spouse, civil partner (PACS) or recognised cohabiting partner, for at least two years, shares reaching these thresholds, and one of them has carried on their main activity or a management function in the company for two years;
  • Post mortem pact: where no commitment exists at the death, the heirs or legatees may enter into one among themselves or with other shareholders within six months of the transfer;
  • Individual commitment by each heir, donee or legatee, given in the estate return or the deed of gift, to keep the shares for six years from the end of the collective commitment;
  • Management function held by one of the signatories of the collective commitment or one of the beneficiaries, during the collective commitment and the three years following the transfer: main professional activity in a partnership, or a management function eligible for the business assets regime (article 975) in a company subject to corporate income tax;
  • Certificates from the company attached to the return or the deed, then sent to the tax authorities within three months of their request and within three months following the end of the individual commitment.

Duties are calculated on the remaining quarter, after the allowance of €100,000 per parent and per child (article 779) and under the scale of article 777. For a gift in full ownership made by a donor under 70, the duties so calculated are reduced by 50% (article 790, I).

For a sole proprietorship, article 787 C exempts in the same proportion all assets used in the business, provided that the business has been held for more than two years where it was acquired for consideration, that each beneficiary keeps these assets for six years from the transfer and that one of them continues to run the business for three years.

02

Dutreil pact 2026: what the Finance Act changed

Article 8 of the 2026 Finance Act (law no. 2026-103 of 19 February 2026) made two changes, applicable to gifts and successions taking place since 21 February 2026.

  • The individual commitment goes from four to six years. For an ordinary pact, concluded for two years and followed by an immediate gift, the minimum horizon is therefore eight years from its signature;
  • So-called « luxury » assets are removed from the exemption: the fraction of the value of the shares representing assets used for hunting or fishing, passenger vehicles, yachts, pleasure boats and aircraft, jewellery, precious metals and works of art, collectors’ items or antiques, racehorses or competition horses, wines and spirits, and dwellings and residences, remains taxed at the normal rate;
  • These assets remain within the exemption if they are used exclusively in the company’s business for at least three years before the transfer, or since their acquisition, and until the end of the individual commitment: stock of an art gallery or an antique dealer, rooms of a hotel, staff housing;
  • The exclusion also applies to the same assets held by companies controlled, directly or indirectly, by the company whose shares are transferred.

In practice, a family holding company that holds, alongside the shares of the business, a residence, a collection or a boat sees the basis of the exemption reduced accordingly. The inventory of assets and the proof of their use become central documents in the file. Our detailed analysis: 2026 reform of the Dutreil pact (in French); for art dealers, Dutreil pact and art galleries (in French).

03

The Dutreil pact and the 2027 budget

The 2027 Finance Bill (no. 3210), tabled on 1 October 2026, does not amend article 787 B: the 75% exemption and the commitment periods resulting from the 2026 reform are maintained.

Its article 5, on the other hand, targets the contribution-and-disposal regime (article 150-0 B ter): the gift or inheritance of holding company shares received in exchange for a contribution placed under deferral would make the contribution gain taxable, instead of wiping it out, for transfers made since 1 October 2026. The common structure (contribution of the shares of the operating company to a holding company, then gift of the holding company shares under a Dutreil pact) is directly affected: the pact reduces gift duties, it has no effect on this tax. See 2027 budget: Dutreil and contribution-and-disposal and contribution-and-disposal after the 2027 Finance Bill.

04

Dutreil pact and active (animating) holding company

A holding company is in principle excluded from the pact, its activity being financial. Article 787 B nevertheless treats as commercial a company which, in addition to managing a portfolio of shareholdings, has as its main activity active participation in the conduct of its group’s policy and in the control of its operating subsidiaries, to which it may also provide internal services. This definition, introduced by the 2024 Finance Act, follows the one set by case law.

According to the tax authorities, the main character of the animation is in particular established where the market value of the assets used for the animation (shares of the animated subsidiaries, assets made available to them, cash allocated to the group) represents more than half of the total assets of the holding company. Active holding status is assessed at the signature of the pact and must be maintained until the end of the commitments (BOI-ENR-DMTG-10-20-40-10, § 55).

Without animation, the pact remains possible through indirect holding: the commitment is given on the operating company, and the exemption of the holding company shares transferred is limited to the fraction of its gross assets representing the shareholding under commitment, within a limit of two levels of interposition, each level having to keep its shareholding unchanged throughout the collective commitment. Proof of animation, much disputed in tax audits, is dealt with on our page active holding company and challenges.

05

Dutreil pact and split ownership: the gift with reservation of usufruct

The Dutreil pact applies to gifts of bare ownership with reservation of usufruct, subject to a condition set by law: the voting rights of the usufructuary must be limited by the articles of association to decisions concerning the allocation of profits. The articles must therefore be amended before the gift. The common structure is for the manager, still full owner, to sign the collective commitment, then to give the bare ownership: the donee then gives the individual commitment. Where the shares are already split at the time of the pact, the collective commitment is entered into jointly by the usufructuary and the bare owner.

The two benefits are cumulative: the 75% exemption applies to the value of the bare ownership, itself set by the scale of article 669 according to the usufructuary’s age (60% of full ownership between 61 and 70 years inclusive, for example). The 50% reduction of article 790, reserved for gifts in full ownership, does not apply, however. On the death of the usufructuary, the usufruct in principle merges with the bare ownership without further duties (article 1133). See also usufruct and bare ownership.

06

In court: three decisions on the active holding company

A large share of the published case law on the pact concerns active holding companies. Three important judgments of the Commercial Chamber of the Court of Cassation (in French) clarify the regime; they were delivered under earlier wordings of article 787 B and should be read with that in mind, in particular for the second one.

  • Main activity of animation. A holding company that, besides managing a portfolio, mainly takes an active part in running its group is treated as an operating company. The court of appeal had relied on the gross fixed assets of the holding company; the Court of Cassation set aside its decision for lack of legal basis, since main animation activity, assessed on a range of indicators, is to be found in particular where the market value, at the date of the taxable event, of the subsidiaries' shares exceeds half of the holding company's total assets (Cass. com., 14 October 2020, no. 18-17.955).
  • Earlier law on maintaining the status. Under the wording in force for a 2010 estate, the status was assessed at the date of the taxable event, and the court of appeal added a condition the law did not contain when it required the holding company to keep its animation role until the end of the holding period (Cass. com., 25 May 2022, no. 19-25.513). The 2022 Amending Finance Act (article 8 of law no. 2022-1157) then added point c bis to article 787 B: the eligible activity must in principle be carried on from the conclusion of the collective commitment until the end of the individual commitment (from the transfer for a commitment concluded after a death, and for at least two years before the transfer for a commitment deemed fulfilled). It applies to transfers from 18 July 2022 and to those for which a commitment was running on that date and the company had not ceased its eligible activity. The tax authorities' guidance quoted above draws from it that a holding company must keep its animation character until the end of the commitments: the judgment therefore states the solution under the earlier law, which point c bis sets aside for situations within its scope.
  • Burden of proof. On a transfer on death, the operating nature of the companies is assessed on the day of death, not on the day the estate return is filed, and the taxpayer claiming the exemption must prove that the subsidiaries of the holding company carry on an eligible activity (Cass. com., 17 December 2025, no. 24-17.415).

Our page active holding company and challenges comments on the proof of animation in tax audits.

07

A worked example: giving a €10M company to two children

Assumptions. A 65-year-old manager holds an operating company valued at €10,000,000, with no « luxury » asset. He signs a collective commitment, manages the company and gives the shares to his two children, in equal shares, with no prior gift in the last fifteen years. Duties calculated per child, then for the family.

Per child (€5,000,000 transferred)No pact, full ownershipDutreil pact, full ownershipDutreil pact, bare ownership
Value transferred€5,000,000€5,000,000€3,000,000 (60%)
After 75% exemption€5,000,000€1,250,000€750,000
Taxable amount after €100,000 allowance€4,900,000€1,150,000€650,000
Duties under the scale€1,967,394€312,678€137,962
50% reduction (donor under 70)no (no pact)€156,339no (bare ownership)
Duties per child€1,967,394€156,339€137,962
Duties for both children€3,934,788€312,678€275,924

Here the pact divides the tax burden by more than twelve. The gift of bare ownership costs slightly less, and the manager keeps the dividends, but it requires the voting rights of the usufructuary to be limited in the articles of association. The calculation does not take into account the costs of the deed nor, where relevant, the tax on a deferred contribution gain if the shares given are those of a holding company resulting from a contribution-and-disposal. The firm’s Dutreil simulator (in French) runs this calculation with your own figures.

08

Securing and defending the Dutreil pact

Failure to comply with a commitment or a condition at any time during the pact leads to the withdrawal of the exemption: the duties are reclaimed, with late-payment interest. The law provides, under precise conditions, for cases where the exemption is maintained in full or in part (transfer of shares to another signatory of the collective commitment, contribution to a holding company, merger, demerger, gift to descendants who continue the individual commitment): they are organised before the transaction, not after. In tax audits, the points of attack are almost always the same: the main activity, the active character of the holding company, the reality of the management function and, since 2026, the use of the assets.

The firm drafts the pact and the articles of association, checks eligibility and the basis of the exemption, organises the timetable with the gift and, where relevant, the contribution to a holding company, monitors the certificates throughout the commitments and defends the exemption in the event of a tax audit. It also acts in related situations: family buy out, transfer of professional practice companies (SEL), business real estate, furnished rentals.

09

Lead lawyers

François Ouairy, partner, member of the Paris bar, co-signed in Le Monde on 15 September 2026 an op-ed on the future of the Dutreil pact. Together with Jonathan Bensaid, member of the Paris and Geneva bars, he leads the firm’s family business transfers, including where the family or some of the heirs live outside France.

Frequently asked questions

Dutreil pact: your questions

Why use a lawyer for a Dutreil pact?

Because the exemption depends on conditions that run over several years, at least eight for an ordinary pact, and each of them can be challenged: main activity, animation by the holding company, management function, use of the assets, compliance with the commitments by each signatory. A Dutreil pact lawyer checks eligibility and the basis of the exemption before signature, drafts the commitment and the articles of association, coordinates the pact with the gift, the split of ownership or the contribution to a holding company, then defends the exemption in the event of a tax audit.

What changes for the Dutreil pact in 2026?

For transfers made since 21 February 2026, the individual holding commitment goes from four to six years, and the fraction of the value of the shares representing so-called « luxury » assets (dwellings, works of art, jewellery, passenger vehicles, yachts, aircraft, racehorses, wines, hunting or fishing assets) is excluded from the exemption, unless used exclusively in the business for at least three years and until the end of the commitments. The 75% rate is unchanged.

Is there a Dutreil simulator?

Yes. The firm’s Dutreil simulator (in French) compares the duties with and without a pact, in full ownership or in bare ownership, applies the €100,000 allowance, the direct-line scale and the 50% reduction before age 70, and calculates the tax on a deferred contribution gain, under the law in force and under the 2027 Finance Bill. It gives an order of magnitude, which the analysis of the file confirms.

How long does a Dutreil pact last?

For an ordinary pact followed by a transfer made since 21 February 2026, at least eight years from its signature: at least two years of collective commitment, still running on the day of the transfer, then six years of individual commitment for each heir or donee. The period remaining after the transfer depends on the structure (collective commitment already well advanced, commitment deemed to exist, pact concluded after a death), but is never less than the six years of the individual commitment. The management function must be held during the collective commitment and the three years following the transfer.

Does the 2027 budget call the Dutreil pact into question?

No, in the version tabled on 1 October 2026: the 2027 Finance Bill does not amend article 787 B. It targets the contribution-and-disposal regime: if the shares transferred are holding company shares received in exchange for a contribution placed under deferral, the gift would make the contribution gain taxable, in addition to the duties reduced by the pact. The bill has not been adopted.

Can a holding company benefit from the Dutreil pact?

Yes, if it is the active (animating) holding company of its group: it actively participates in the conduct of the group’s policy and in the control of its operating subsidiaries. The tax authorities apply in particular the test of assets used for the animation exceeding half of total assets. A passive holding company can also be transferred under a pact, the commitment being given on the subsidiary, but the exemption is then limited to the fraction of its assets representing the shareholding under commitment.

Can the bare ownership of shares be given under a Dutreil pact?

Yes, provided that the articles of association limit the voting rights of the usufructuary to decisions concerning the allocation of profits. The 75% exemption then applies to the value of the bare ownership set by the scale of article 669. The 50% reduction of the duties, reserved for gifts in full ownership, does not apply.

Can a Dutreil pact be signed after a death?

Yes. Where the deceased had not signed a collective commitment, the heirs or legatees may enter into one among themselves or with other shareholders within six months of the death. All the other conditions still apply, in particular the six-year individual commitment and the management function.

Cité par

Passing on the family business under a Dutreil pact

A confidential first discussion to check eligibility, measure the basis of the exemption after the 2026 reform and build the timetable for the pact and the gift.

Request a meeting

Sources

  • Articles 787 B and 787 C of the French Tax Code (CGI), versions in force since 21 February 2026 (Légifrance, consulted on 5 October 2026)
  • Articles 669, 777, 779 and 790 of the French Tax Code
  • Article 8 of the 2026 Finance Act, law no. 2026-103 of 19 February 2026 (so-called « luxury » assets, individual commitment extended to six years); article 23 of the 2024 Finance Act, law no. 2023-1322 of 29 December 2023
  • BOI-ENR-DMTG-10-20-40-10 (10 August 2026), in particular § 55, § 90, § 300 and § 400 to 490
  • 2027 Finance Bill, no. 3210, tabled at the National Assembly on 1 October 2026, article 5 (bill not adopted)

Cette note présente l'état du droit à sa date de publication et ne constitue pas un avis juridique. Chaque situation appelle un examen particulier.

This page presents the Dutreil pact for information purposes; each transfer calls for a specific analysis. Law in force at 5 October 2026; the developments on the 2027 Finance Bill concern a bill not yet adopted, which may be amended before its adoption.