Dutreil pact: the mistakes that forfeit the exemption

Quick answer. The Dutreil pact (article 787 B of the French tax code) grants a 75% allowance on the value of shares transferred by gift or inheritance. A breach of an undertaking, the absence of a management role, a non-animating holding company or non-professional assets are each enough to forfeit this benefit and trigger a reassessment of transfer duties.

The Dutreil exemption is never secured on the day the pact is signed. It is earned over several years of holding the shares and complying with precise conditions. In the transfer files we handle, challenges almost never come from an initial refusal by the tax authorities: they arise years later, when an undertaking is inadvertently breached or a management condition has not been met. This checklist lists the mistakes that turn a secured file into a reassessment of transfer duties.

The reform from the 2026 finance act (Law no. 2026-103 of 19 February 2026) has tightened certain rules for transfers carried out from 21 February 2026 onwards. We systematically distinguish the previous regime from the new one, because both coexist depending on the date of the undertaking.

The Dutreil pact allows the shares of an operating company (industrial, commercial, craft, professional or agricultural) to be transferred with a 75% allowance on their value subject to gift and inheritance duties. On a business valued at 4 million euros, only 1 million enters the tax base: the saving is substantial, which explains the authorities' scrutiny of compliance with the conditions.

The scheme rests on two successive undertakings to hold the shares and on the exercise of a management role. It is their sequence over time that creates the risk zone. To structure properly upstream, many owners benefit from combining Dutreil planning with the structuring of a family holding.

The two regimes coexisting in 2026#

For unlisted shares, the collective undertaking thresholds are at least 17% of financial rights and 34% of voting rights (10% and 20% for listed companies). Before signing, we always check that the pact meets both thresholds at the same time.

1. Breaching a holding undertaking. Any sale or gift of shares during the collective undertaking (2 years) or the individual undertaking (4 or 6 years depending on the date) triggers, outside authorised cases, the challenge of the exemption on the shares concerned.
2. Failing to exercise the management role. One of the signatory shareholders, or the heir or donee, must hold a management role throughout the collective undertaking and for the 3 years following the transfer.
3. Relying on a non-animating holding. Only a holding that genuinely animates its group (defining strategy, effectively controlling operating subsidiaries) qualifies. A passive or patrimonial holding forfeits the benefit.
4. Carrying out an unauthorised contribution or sale. A contribution of shares to a holding during the undertaking is only safe if it meets the legal conditions designed for it. Otherwise, it breaches the undertaking.
5. Neglecting filing obligations. The certificate is due at the time of the transfer and at the end of the individual undertaking, and upon request from the authorities. Failing to respond within the 3-month deadline weakens the file.
6. Keeping non-professional assets (since 2026). For transfers from 21 February 2026, the fraction of value corresponding to assets not used exclusively for the activity is excluded from the allowance.

The underestimated risk#

The most commonly overlooked risk is not the deliberate breach, but the loss of the management role. An owner who retires, falls ill, or gradually hands over without an eligible signatory formally taking up a management role exposes the entire file. The management condition must be met without interruption throughout the collective undertaking and the 3 years following the transfer. Even a temporary gap can be treated as a breach.

The classification of a holding as animating is one of the most recurring areas of disagreement with the tax authorities. A holding only qualifies as animating if it actively takes part in steering the group's policy and controlling the operating subsidiaries, beyond simply managing a portfolio of shareholdings.

What the authorities look at#

• The existence of animation agreements or services genuinely invoiced to the subsidiaries.
• The presence of common directors and real involvement in the subsidiaries' strategy.
• The share of operating assets relative to purely patrimonial assets (excess cash, non-business real estate).
• The documentary trail of animation: minutes, strategic decisions, re-invoicing.

In a recent file, an SME owner came to us after receiving a proposed reassessment: his holding did hold operating subsidiaries, but no animation agreement or re-invoicing demonstrated its effective role. Rebuilding the documentation after the fact remains possible, but it is always weaker than animation organised from the outset. This is precisely the value of patrimonial support for the company owner ahead of the transfer.

A persistent misconception needs correcting. The obligation to file an annual certificate was abolished by the 2019 finance act. Today, the certificate is only due at the time of the transfer, at the end of the individual undertaking, and each time the authorities request it.

Quick decision: which certificate, when?#

The mistake is therefore no longer forgetting an annual certificate that no longer exists, but failing to produce the initial or final certificate, or failing to respond within 3 months to a request from the authorities. Keeping supporting documents throughout the lock-in period remains essential, as they will form the basis of the final certificate and responses to any requests.

• Map precisely the thresholds held (17% financial and 34% voting rights for unlisted shares) and the signatories of the collective undertaking.
• Identify by name the person holding the management role and plan their succession in case of incapacity.
• Document the animation of the holding from the moment the pact is set up, not only in the event of an audit.
• Before any transfer after 21 February 2026, isolate or remove the assets not used for the activity, which no longer benefit from the allowance.
• Keep a schedule of the collective and individual undertakings to avoid any sale during the locked period.

A Dutreil pact almost always fits into a broader strategy of transferring a family business to one's children and a rigorous valuation of the transferred business. Compliance with the share transfer rules during the undertaking period determines whether the benefit is maintained.

For any transfer initiated from 21 February 2026, two parameters change the picture. First, the lock-in period lengthens: the individual undertaking moves from 4 to 6 years, bringing the total to around 8 years. This calls for earlier planning and a realistic assessment of the heirs' ability to hold. Second, assets not used exclusively for the activity (recreational assets, residential property, valuables, for example) leave the 75% base. Normal operating cash, however, remains eligible. Our reading: it becomes a priority to house patrimonial assets outside the operating company before the transfer, otherwise part of the value will be taxed in full.

Securing the entire tax dimension, from the qualification of the activity to the calculation of the residual duties, is work carried out with an expert-comptable specialising in business transfers and, for the detail of the duties, with dedicated tax support.