Creating a Holding to Acquire a Target: The 150-0 B ter Case Study

A business owner who sells their company without any intermediate structure receives the sale price directly and pays French capital-gains tax on the gain at the prélèvement forfaitaire unique (PFU — the flat tax), which stands at 31.4% in 2026 (12.8% income tax plus 18.6% social levies). A business owner who first contributes their shares to a holding company they control can instead defer that tax liability under the rollover relief (report d'imposition) provided by article 150-0 B ter of the French General Tax Code (CGI). The holding sells, reinvests, and the frozen gain remains suspended for as long as the statutory conditions are met.

This mechanism is not a loophole. It is framed by precise obligations, a dense BOFiP (official tax doctrine) framework, and regular scrutiny by the French tax authority (DGFiP). The case study below shows how a well-constructed structure articulates the contribution-cession (apport-cession), acquisition debt, tax consolidation (intégration fiscale), and distributions — and which documentation points determine whether the file survives an audit.

In brief: article 150-0 B ter allows a seller to contribute their shares to a controlled holding (holding contrôlée), have that holding sell the shares to a third-party buyer, and reinvest at least 70% of the sale proceeds in an eligible economic activity within three years of the sale, for disposals on or after 21 February 2026 (Law no. 2026-103 of 19 February 2026), against 60% within 24 months previously, with the reinvested assets held for five years, while keeping the capital-gains tax deferred. The structure then articulates with tax consolidation (intégration fiscale, article 223 A CGI) if the holding's ownership of the target reaches 95% or above.

French tax law offers two distinct regimes when a business owner contributes shares to a company in exchange for that company's shares.

In almost every holding-interposed acquisition structure, the applicable regime is the mandatory deferral under article 150-0 B ter, because the business owner controls the holding they create.

The 150-0 B ter mechanism provides genuine economic benefit in two main scenarios.

The first is the seller who wants to reinvest. Rather than receiving the sale price net of 31.4% PFU and reinvesting the balance, they contribute shares to a controlled holding, let the holding sell, and have a meaningfully larger capital base to deploy — because the tax liability remains deferred. The liquidity differential available for reinvestment can be substantial.

The second scenario is the business owner preparing an acquisition. They create a holding, lodge existing shares in it via contribution, and the holding uses the sale proceeds to acquire a target company. The holding simultaneously acts as the acquisition vehicle, the beneficiary of the tax deferral, and — if conditions are met — the head of the tax consolidation group.

On the files we handle, the reinvestment eligibility question is always raised before signing, not after. Idle cash or listed securities do not satisfy the BOFiP conditions.

The BOFiP sets out the reinvestment conditions at BOI-RPPM-PVBMI-30-10-60. The main rules are as follows.

1. The deferral is maintained if the holding keeps the contributed shares for at least 3 years.
2. If the holding sells the shares within 3 years of the contribution, the deferral is not cancelled provided the holding reinvests at least 70% of the sale proceeds in an eligible economic activity within three years for disposals on or after 21 February 2026 (Law no. 2026-103 of 19 February 2026), against 60% within 24 months previously. The reinvested assets must then be held for five years.
3. Eligible reinvestments include in particular: acquiring shares in an operating company carrying on a commercial, industrial, craft, professional or agricultural activity; directly financing operational assets; subscribing to certain qualifying investment funds (FCPR, SLP) under specific conditions.
4. Investments in pure property-letting real estate, shares in property-asset-predominant companies, or standard treasury placements are not eligible. For disposals carried out on or after 21 February 2026 the eligible perimeter was narrowed further: property letting, property development, dealing in property, passive wealth management, financial activities and regulated-tariff activities are excluded; hotel operations remain eligible.

For the precise qualifying criteria and the full list of eligible investments, the authoritative reference is BOFiP BOI-RPPM-PVBMI-30-10-60. Any ambiguity on a specific reinvestment's eligibility should be raised with the tax authority (via a formal tax ruling — rescrit fiscal) or with specialist tax counsel before commitment.

The following scenario is illustrative. Figures are indicative orders of magnitude; every real transaction must be analysed against the actual facts, documents, and law in force at the time.

Facts. A business owner holds 100% of the shares of an operating company valued at EUR 1,000,000. Their tax cost base is EUR 100,000. The latent capital gain is therefore EUR 900,000. They wish to acquire a target company within 18 months.

Without a holding. The owner sells directly. They receive EUR 1,000,000 and pay PFU of 31.4% on the gain of EUR 900,000, amounting to approximately EUR 282,600 in tax (allowances may apply; verify at the time). They have roughly EUR 717,400 net to reinvest.

With the 150-0 B ter structure. The owner contributes their shares to a controlled holding. The holding sells the shares to the buyer for EUR 1,000,000. The EUR 900,000 gain is frozen in deferred tax status. The holding has EUR 1,000,000 of gross proceeds available (before any fees and the holding's own IS). It must reinvest at least 70% of the sale proceeds (EUR 700,000) in an eligible activity within three years for disposals on or after 21 February 2026, against 60% (EUR 600,000) within 24 months previously.

The liquidity difference available for acquisition financing: approximately EUR 282,600 more than in the direct scenario, because the tax charge remains deferred. That is the amount the holding can direct toward acquisition debt service or equity in the target.

1. Incorporate the holding: create an SAS or SARL (structure choice affects governance flexibility and social-levy treatment of the manager's remuneration). The corporate object must cover holding, managing, and financing participations.
2. Contribute the shares: the owner contributes shares at fair market value. A statutory auditor's report (commissaire aux apports) is generally required. The deferred gain is declared in the owner's personal income tax return for the year of contribution (form reference: verify for the applicable tax year).
3. Holding sells the shares: the holding transfers the shares to the third-party buyer. The sale proceeds enter the holding's treasury. The deferral is maintained, subject to the 3-year holding test and to the reinvestment condition (70% for disposals on or after 21 February 2026, against 60% previously).
4. Reinvest 70% within three years (disposals on or after 21 February 2026, against 60% within 24 months previously): the holding identifies and completes eligible investments, to be held for five years. Documentary traceability is essential: shareholders' pact, acquisition deed, traceable bank transfer, eligibility memorandum.
5. Structure acquisition debt: if the holding borrows to co-finance the target, interest is in principle deductible against the holding's IS, subject to thin-capitalisation rules (to be verified on a transaction-by-transaction basis with your adviser).
6. Option for tax consolidation: if the holding owns at least 95% of the target, it can opt for the tax consolidation regime under article 223 A CGI, for an initial five-year period. The fiscal group allows the holding's deficit (driven by interest charges) to offset the operating subsidiary's taxable profit.
7. Organise financial flows: dividends from the subsidiary to the holding under the parent-subsidiary regime (régime mère-fille), subject to the 12% add-back charge (niche Copé, article 216 CGI); debt service; management fees if the holding qualifies as an active holding (holding animatrice); future distributions.

Tax consolidation (article 223 A CGI) makes the holding the sole IS taxpayer for the whole group, provided it holds at least 95% of each consolidated subsidiary. In a leveraged acquisition, this delivers a concrete advantage: interest on acquisition debt creates a tax deficit at the holding level, which offsets the subsidiary's taxable profits at the group result level — a relief unavailable without consolidation.

Two technical points matter. First, deficits accumulated during the consolidation period are not returnable to a subsidiary that exits the group. Second, a 12% add-back charge (niche Copé, article 216 CGI) applies to qualifying participations and is reintegrated into the parent's taxable income. Dividends received remain near-exempt, but this add-back must be factored into financial projections.

First recurring pattern. A business owner contributes shares fewer than 12 months before a planned sale. The holding is incorporated in a hurry, the contribution report is rushed, and no eligible reinvestment has been identified before the transaction closes. The sale proceeds sit idle in the holding's account well beyond the reinvestment deadline. The 70% reinvestment condition applicable to disposals on or after 21 February 2026 is not met. The deferral collapses, the frozen gain becomes immediately taxable, and late-payment interest applies. Time pressure is the primary enemy of these structures.

Second recurring pattern. The holding is properly set up and the deferral is valid, but the business owner reinvests into a residential buy-to-let property. That is not an eligible economic activity under the BOFiP. The reinvestment is invalidated and the deferral falls. The distinction between eligible operational activity and passive asset management must be verified before any commitment.

• Confirm the contributor's effective control of the holding before the contribution
• Commission a statutory auditor's report on the contributed shares' fair value
• Verify the chronology: contribution must precede any binding promise or sale agreement
• Identify eligible investments representing at least 70% of the anticipated sale proceeds (threshold for disposals on or after 21 February 2026, against 60% previously)
• Check each target investment's eligibility against BOFiP BOI-RPPM-PVBMI-30-10-60
• Prepare reinvestment documentation: deeds, traceable transfers, eligibility memo
• Assess the opportunity to opt for tax consolidation from the first financial year (condition: ownership >= 95%)
• Review thin-capitalisation rules if the holding is taking on debt to co-finance the target
• File the deferral declaration in the personal income tax return for the year of contribution

For further reading, see our articles on Share contribution to a holding, Holding: advantages and disadvantages, Tax consolidation: definition and operation, Apport-cession 150-0 B ter: securing the structure 2026, Holding taxation, Share disposal taxation, and our Holding tax advisory service in Paris.

Disclaimer. This article is written for information and educational purposes only. It does not constitute personalised tax or legal advice and cannot substitute for analysis of your specific situation, your documents, and the law applicable at the date of your transaction. The tax rules, rates, and eligibility conditions mentioned reflect the position as known on 29 May 2026 and may change. Consult a chartered accountant or specialist adviser before making any decision.