Dutreil Pact 2026: the reform tightening the relief

Quick answer. For gifts and inheritances completed from 21 February 2026, the 2026 Finance Act keeps the Dutreil pact's 75% relief in principle but tightens its base: non-business assets are excluded, the individual commitment rises from 4 to 6 years (8 years in total), and holding companies are assessed on a look-through basis.

The Dutreil pact remains the central tool for transferring a business at a controlled tax cost. But the version you knew is no longer exactly the one that applies today. The 2026 Finance Act amended articles 787 B and 787 C of the French General Tax Code to focus the benefit on the company's business value alone and to extend the holding period.

This article does not restate how the scheme works. For that, see our complete guide to the Dutreil pact. Nor does it cover fairness between heirs, a subject we develop in our dedicated article on passing a family business to your children. Here, we isolate a single question: what actually changes on 21 February 2026, and what you must do beforehand to keep the relief.

Three lines of tightening coexist. The 75% relief is not abolished, but the base it applies to and the commitment timetable are.

Our take. The reform removes nothing; it refocuses. The administration's message is clear: the benefit must serve the working tool, not a financial or property estate sitting inside the company. For many asset-rich groups, the work is no longer signing a pact but preparing the balance sheet upstream.

This is the most structural change. Until now, when the shares of an operating company were transferred under a pact, the 75% relief applied to their full value, including the portion linked to assets unconnected with the business.

From now on, the value representing assets not strictly allocated to the business is deducted from the base benefiting from the relief. Only the business fraction enjoys the 75% reduction. The non-business fraction is taxed at ordinary transfer duties.

Which assets are targeted#

The targets are so-called non-business or luxury assets, those not necessary to the activity. The law notably covers residential property not allocated to operations, works of art, personal vehicles and jewellery, and more broadly any asset not essential to the company's activity.

The line between cash needed for operations and investment cash is exactly where most discussions will play out. Surplus cash held durably idle, uncorrelated with the operating cycle, is likely to be treated as non-business.

The three-year allocation period#

A point often overlooked. To qualify as business assets, these must in principle have been allocated exclusively to the activity during the three years preceding the transfer (or since acquisition, if more recent), then until the end of the individual commitment.

The underestimated risk. This three-year history means you cannot clean up a balance sheet the day before a gift. Removing a rental property, distributing surplus cash or reclassifying an asset takes anticipation, and each operation carries its own tax cost. The reform turns the transfer into a multi-year project, not a one-off act.

The commitment architecture stays the same, but its duration lengthens.

The collective commitment remains 2 years, with the same thresholds for an unlisted company: at least 17% of financial rights and 34% of voting rights. A management role is still required for the period set by the text.

By contrast, the individual holding commitment taken by each heir or donee rises from 4 to 6 years. The minimum total holding period therefore reaches 8 years: 2 years of collective commitment followed by 6 years of individual commitment.

2026 watch points. Two extra years of share lock-up is tangible. It affects heirs' liquidity, the ability to recompose the capital, bring in a third party or sell off a branch. Any pact signed now binds the next generation for eight years. The transfer timetable must factor this in from the first reflection, especially where several children do not share the same horizon or role in the business.

Holding companies remain eligible, but under closer scrutiny. The business fraction is now assessed through a look-through analysis of the assets held across the ownership chain. The aim is to relieve only the portion actually allocated to an eligible activity.

Active (animating) holdings can stay within the scheme if they genuinely steer their group, meaning they actively take part in setting group policy and controlling subsidiaries, and if the assets held are business assets. Effective animation and the business nature of the assets are assessed case by case.

What the administration looks at. Animation is not presumed. Animation agreements actually applied, real services billed to subsidiaries, documented involvement in strategic decisions, the composition of the holding's assets: these distinguish an active holding from a mere asset-management holding. To structure an ownership chain, see our analyses on the family holding and on creating a holding after a buyout, plus our holding-versus-SCI comparison to separate operations from estate.

To avoid confusion, two supporting measures remain in place and combine with the pact. The Dutreil pact works alongside the 100,000 EUR allowance per parent per child every fifteen years (article 779 CGI) and the 50% reduction in duties on a full-ownership gift where the donor is under 70 (article 790 CGI). These levers apply to the net taxable base, that is, after the Dutreil relief recalculated under the new rules. To combine the pact with an allocation among heirs, the gift-partition (donation-partage) remains the reference tool.

Recently, an asset-holding company owning a property not allocated to operations, alongside a genuine operating activity, perfectly illustrated the reform's trap. The owner was reasoning on a 75% relief computed on the full value of the shares, property included. Under the rules in force since 21 February 2026, the value representing that property is excluded from the 75% base and bears ordinary transfer duties. The duty gap, on a significant asset value, changes the transfer equation.

Our conviction is simple: the Dutreil pact is no longer an act you sign, it is a project you prepare. The real value of advice has shifted upstream, to the balance-sheet diagnosis, the asset-by-asset classification, the measurement of the non-business share and the implementation, over several financial years, of clean-up operations compatible with the three-year allocation period. Postponing this diagnosis risks discovering, on the day of the gift, that half the transferred value enjoys no relief.

It is also a valuation matter. Identifying the business fraction calls for a rigorous valuation and growth-strategy review of the company and its assets, articulated with the owner's wealth management. As a chartered accountant and statutory auditor registered with the Order of Chartered Accountants of Ile-de-France, we approach these business-transfer cases by connecting balance-sheet reading, tax classification of assets and the commitment timetable.

1. Have a detailed asset statement drawn up and classify each item as business or non-business, without presuming the outcome.
2. Measure the non-business value share and its quantified impact on duties before any decision.
3. Check the three-year allocation period for sensitive assets and identify what can still be reallocated or removed in time.
4. For groups, document the holding's effective animation and apply the look-through analysis to the whole ownership chain.
5. Rebuild the transfer timetable around the 8-year total holding period, factoring in the donor's age and the 70-year threshold.
6. Combine the pact with the 100,000 EUR allowance and the duty reduction, then have the scheme validated by your adviser before signing.

Checklist of balance-sheet assets to watch#

• Residential or rental property not allocated to operations.
• Surplus cash held durably idle, uncorrelated with the operating cycle.
• Financial investment portfolios and capitalisation contracts.
• Works of art, collectibles and luxury goods.
• Personal-use vehicles and mixed-use assets that are poorly documented.
• Non-animated holdings sitting in a company presented as an active holding.