Contributing your premises to an SCI: does the 151 octies deferral apply?

Quick answer. The deferral under article 151 octies of the French Tax Code applies to the contribution of a whole sole proprietorship, or a complete branch of activity, to a company under a real tax regime. The isolated contribution of your premises to a wealth SCI is not within this scope: the SCI does not operate a business and a building alone is not a branch of activity. The 151 octies deferral happens when you convert your business into a company, not by contributing walls to an SCI.

The idea spreads widely: contributing your business premises to an SCI would freeze the capital gain thanks to the 151 octies deferral. This is a common confusion, and it can be costly. The 151 octies deferral does exist, but it answers a precise operation, the conversion of a sole proprietorship into a company, not the transfer of walls to a wealth SCI. Understanding this boundary avoids building a structure on a tax basis that does not hold.

Article 151 octies of the French Tax Code organises a deferral of the capital gains recorded when an individual contributes their sole proprietorship, or a complete branch of activity, to a company under a real tax regime (guidance BOI-BIC-PVMV-40-20-30-10).

The deferral concerns two categories of gains. Gains on non-depreciable items, such as goodwill or land, are deferred until an exit event. Gains on depreciable items are reintegrated into the results of the beneficiary company, which spreads their taxation.

The logic of the text is clear: it supports the legal transformation of a business that keeps existing under another form. The operation continues, simply carried by a company. It is this continuity of activity that justifies the deferral.

Contributing only your premises to a wealth SCI does not match this operation.

A building alone is neither a sole proprietorship nor a complete branch of activity: it is an isolated asset. The SCI that receives it runs no commercial or professional activity, it merely holds and leases. The two central conditions of the deferral, the contribution of a business or branch and the continuation of the activity, are missing.

As a result, such a contribution is treated under the ordinary regime applicable to the asset. If the building was on the professional balance sheet, the contribution triggers a professional capital gain. If it was held in your private estate, the contribution, which is legally a transfer for value paid in shares, falls under the individual real-estate capital gains regime (Tax Code art. 150 U), with its rate of 19% income tax and 17.2% social levies, and its holding-period allowance. The contribution therefore does not neutralise the tax, contrary to the received idea.

The 151 octies deferral makes full sense when converting a sole proprietorship into a company.

A craftsman, a trader or a self-employed professional who contributes their sole proprietorship to a limited company or an exercise company can place the contribution gains under deferral. This avoids paying tax immediately on purely accounting gains, when no cash enters their pocket.

In this overall operation, the question of the walls arises separately, and this is precisely where the link with an SCI may reappear, but in a different way from the one imagined at the start.

Article 151 octies provides specific flexibility for buildings.

You can contribute the building with the rest of the business and place its gain under deferral. You can also exclude it from the contribution, provided you make it available to the beneficiary company under a contract lasting at least nine years. This second path lets you keep the building outside the operating company, for example in your own name or, later, in a dedicated SCI, while securing the contribution of the rest.

It is this second scheme that joins the wealth logic of an SCI: the walls stay away from the tool, as we detail in our comparison of ways to hold your business premises in an SCI, directly or in the operating company.

The deferral is not an erasure, it is a suspension that ends on certain events (guidance BOI-BIC-PVMV-40-20-30-20).

1. The sale, repurchase or cancellation of the social rights received in consideration for the contribution.
2. The sale by the beneficiary company of the non-depreciable assets contributed, if it occurs earlier.
3. The gratuitous transmission of the shares, unless the recipient takes over the deferral commitment.
4. The end of the availability of the building excluded from the contribution, when the nine-year contract ceases.

When one of these events occurs, the deferred gain becomes taxable. Anticipating these triggers is part of the structure, just as for the deferral on the contribution of shares, which follows a neighbouring logic.

If your objective is simply to separate the walls from operations, several paths exist, but none runs through a 151 octies deferral on an isolated contribution to an SCI.

You can keep the building in your own name and lease it to the company, with no contribution gain because there is simply no contribution. You can set up an SCI that buys the building, which requires financing and triggers the registration duties of the sale. Finally, when the building is private, you can contribute it to an SCI while accepting the corresponding individual real-estate capital gain.

The choice depends on your horizon and the targeted exit taxation, an arbitrage we always link to the SCI regime, detailed in our article SCI at corporate tax or income tax. The later sale of shares in an SCI with a preponderance of real estate also bears registration duties of 5% with no allowance (Tax Code art. 726 I 2), a parameter to factor in from the design stage.

We regularly meet owners convinced that contributing their walls to an SCI is enough to neutralise the gain thanks to 151 octies. This belief mixes two distinct operations: the transformation of a sole proprietorship into a company, which opens the deferral, and the simple transfer of a real-estate asset to a wealth structure, which does not.

The right reflex is to separate the questions. First, should the business become a company, and with what treatment of the contribution gains. Then, where to hold the walls, knowing that the option to exclude the building under a lease of at least nine years offers a clean way to keep them out of the tool. Mixing these two decisions almost always leads to a fragile structure.

A dental surgeon operating as a sole proprietorship wanted to contribute his walls to a family SCI, thinking he would freeze the gain via 151 octies. The analysis showed that the isolated contribution of the building did not qualify for the deferral: held in his private estate, it would have generated an individual real-estate capital gain, softened only by the holding-period allowance. The chosen solution was to keep the building in his own name and lease it to the exercise company, then to consider an SCI later for transmission. The 151 octies deferral was reserved for the only operation that allowed it, the contribution of the activity itself to the company.