Quasi-usufruct over SCI cash: the restitution claim

Quick answer. Quasi-usufruct (Civil Code art. 587) applies to things that are consumed by use, such as money: the usufructuary can dispose of it, with an obligation to return the equivalent at the end. After the sale of a split asset, it lets the usufructuary reinvest the cash, for example in an SCI, and creates a restitution claim for the bare owner, deductible from the estate subject to the rules of article 774 bis of the Tax Code.

When an SCI or a family sells an asset whose ownership is split, a practical question arises at once: who receives the price, the usufructuary or the bare owner? Quasi-usufruct offers a flexible answer, leaving the cash with the usufructuary while protecting the bare owner through a claim. But since the finance law for 2024, this mechanism requires heightened care, because not all restitution claims are still deductible. It is in this context that we advise owners who want to keep control of their savings while preparing transmission.

Quasi-usufruct is defined by article 587 of the Civil Code: it applies to things that cannot be used without being consumed, such as a sum of money.

Unlike classic usufruct, where the usufructuary must keep the thing and return it in kind, the quasi-usufructuary can freely dispose of the money. In return, they must return the equivalent, in value, at the end of the usufruct, most often on their death. This restitution takes the form of a debt towards the bare owner.

Quasi-usufruct therefore turns a split right over a sum into freedom of use for the usufructuary, coupled with a deferred debt. This is what makes it valuable after the sale of a split asset: the cash is not frozen between two holders, it stays steerable by a single hand. To place this mechanism well, it helps to review the principles of property dismemberment, of which quasi-usufruct is only a variant bearing on cash rather than on a building.

When an asset held in usufruct and bare ownership is sold, the price must be allocated, and three routes open up. The choice is neither neutral for the estate nor for tax.

The first is to split the price between usufructuary and bare owner under the age scale, each receiving their fraction and disposing of it freely. The second is reinvestment: the price serves to buy a new asset onto which the split carries over identically, which prolongs the initial scheme. The third is quasi-usufruct: the usufructuary receives the whole price and can reinvest it freely, for example in the cash of an SCI or a capitalisation contract, while contracting a restitution claim towards the bare owner.

It is this third route that interests the owner wishing to keep control of the cash while preparing transmission, in line with the strategies described in our article on the advantages and drawbacks of quasi-usufruct.

Allocation under the scale of article 669 of the Tax Code#

The first option requires valuing the usufruct and the bare ownership respectively. The tax scale of article 669 of the Tax Code, in its version applicable to lifetime usufruct, sets these fractions according to the age of the usufructuary on the day of the operation. This scale serves as a reference for allocating the price and computing duties in most dismemberments. (It should not be confused with usufruct set up for a fixed duration, which follows a different valuation rule under the same article 669.)

The older the usufructuary, the heavier the bare ownership weighs: a usufructuary aged 72 values their usufruct at only 30% of the price. It is precisely this mechanic that often pushes towards quasi-usufruct: rather than recovering only a fraction of the price, the usufructuary keeps the whole of the cash and defers the sharing of value to their death, through the restitution claim.

The restitution claim is the usufructuary's debt towards the bare owner, equal to the amount handed over.

On the extinction of the usufruct, the bare owner becomes creditor of this sum against the usufructuary's estate. When the claim is deductible, it reduces the taxable estate, which eases the base of the duties due from the heirs. This is what made quasi-usufruct an efficient transmission tool: the cash works for years in the hands of the usufructuary, and the restitution debt reduces by as much the base of the duties on death.

To be enforceable against the tax authority, the claim must be formalised. We systematically recommend a registered quasi-usufruct agreement, which sets the amount, the nature of the use and the restitution terms. Without this formalisation, and without a certain date, the deductibility of the claim becomes fragile, or even unenforceable. This is a point we handle in the same way as the trade-offs set out on the temporary transfer of usufruct of SCI shares.

The finance law for 2024 (law no. 2023-1322 of 29 December 2023, art. 26) tightened the deductibility of restitution debts, and this point is now central. The text applies to estates opened from 29 December 2023.

Article 774 bis of the Tax Code provides that restitution debts relating to a sum of money over which the deceased had reserved usufruct are not deductible from the estate. Targeted first: the gift of a sum of money with reserved quasi-usufruct, which until then allowed cash to be transmitted while keeping its use, by creating a debt deductible on death. This scheme is now neutralised for inheritance purposes.

The law, however, provides essential exceptions, which make all the difference for an owner. The rule does not apply to quasi-usufruct over the sale price of an asset whose ownership was split, provided it is shown that the debt was not contracted for a mainly fiscal purpose. Nor does it apply to the legal usufruct of the surviving spouse (Civil Code, art. 757), or to the usufruct resulting from the special available portion between spouses (art. 1094-1).

One technical point deserves emphasis, because it drives the rest of the reasoning. When the claim is not deductible, the corresponding sum does not for all that fall outside the scope of tax. By derogation from article 1133 of the Tax Code, which in principle exempts the reunion of the usufruct with the bare ownership, article 774 bis provides that this sum gives rise to the collection of inheritance transfer duties, borne by the bare owner. In plain terms, the value does not disappear from the base: it is caught up at the moment the bare owner recovers their claim. For the owner, this detail is far from neutral, since it shifts the tax burden onto the heirs and can increase the overall cost of transmission where the exception does not apply.

Our view#

Quasi-usufruct over the sale price of a split asset remains a relevant tool in 2026, precisely because it benefits from an express exception within article 774 bis. The cash can be kept and reinvested by the usufructuary, and the restitution claim remains deductible from the estate, provided no mainly fiscal aim is pursued. We point out that this notion is broader than abuse of law: it is for the taxpayer to demonstrate the wealth coherence of the arrangement, and not for the authority to prove fraud.

It is worth understanding clearly what happens when the exception does not apply, because that is where the mechanism surprises families. Take a gift of 200,000 euros with reserved quasi-usufruct: as the restitution debt is no longer deductible, the deceased's taxable estate is not reduced, and above all the sum is brought back into the duty computation. In practice, the bare owner pays inheritance transfer duties, computed according to their family relationship and after the applicable allowances, on this sum of 200,000 euros they recover under their claim. Where the operation was once painless on death, it now triggers a tax borne by the bare-owner heir: it is this bringing-back that neutralises the inheritance advantage of the scheme based on a gift of cash.

The essential reflex is therefore formalisation and traceability. A registered quasi-usufruct agreement, which justifies the origin of the sum and the wealth objective (reinvestment, protection of the spouse, funding of a family project), secures the deductibility. Conversely, quasi-usufruct born of a simple gift of cash has lost most of its interest, which we explain to clients tempted to reproduce a pre-2024 scheme. The distinction lies in the origin of the usufruct, not in the mere presence of a claim: it is the sale of a split asset that opens the exception, never the direct gift of money.

One parameter is too often left out of the agreement: is the amount of the restitution claim frozen at face value, or indexed? The choice is not trivial. A claim fixed in constant euros, without indexation, depreciates with inflation: on death, the bare owner recovers a sum whose purchasing power has melted away, and the debt deductible from the taxable estate is all the smaller. Conversely, an indexed claim (linked to a price index, to the value of a reinvestment asset, or revalued under a negotiated clause) better protects the bare owner and increases the deductible debt on death.

This indexation choice therefore has a direct effect on deductibility: the higher the claim on the day of death, the more it reduces the duty base, within the limit of the amount actually owed under the agreement. We recommend settling this point as the deed is drafted, because indexation introduced after the fact may be analysed as an additional gift or may weaken the certain date.

The fate of the reinvestment in case of a loss deserves the same attention. If the usufructuary reinvests the cash in an SCI or an investment that loses value, the restitution debt is not mechanically reduced: the quasi-usufructuary remains bound to return the agreed equivalent, regardless of the outcome of their use. This is a protection for the bare owner, but a risk for the usufructuary and, in practice, for their estate: if the reinvestment asset is worth less than the claim, the heirs settle the difference out of the other assets of the estate. Conversely, a claim simply capped at the value of the reinvestment asset shifts the risk onto the bare owner. This is precisely what the agreement must settle, and it is here that the balance between the parties is decided.

A couple in their sixties had given the bare ownership of a flat to their two children a few years earlier, keeping the usufruct. On the sale of the asset, for a price of around 600,000 euros, the question of allocation arose. The scale of article 669 would have attributed most of the price to the children's bare ownership, given the age of the parents, which would have deprived the latter of the cash.

Rather than splitting the funds immediately, the parents opted for quasi-usufruct over the price, formalised by a registered agreement, in order to reinvest the whole in a family SCI. The restitution claim for the children, based on the sale price of a split asset, remained deductible from the estate under the article 774 bis exception. The arrangement was documented (origin of the funds, reinvestment project, absence of a mainly fiscal purpose) so as to be enforceable. Conversely, had the couple wished to place cash already held, with no prior sale, the same claim would not have been deductible.

In practice: securing a quasi-usufruct over a sale price#

• Check beforehand that the asset was indeed split before the sale: it is the origin of the dismemberment that opens the article 774 bis exception.
• Have a quasi-usufruct agreement drafted and registered to give it a certain date and make it enforceable.
• Document the wealth objective (reinvestment, protection of the spouse, family project) to show the absence of a mainly fiscal purpose.
• Settle the indexation of the claim in the deed: a claim frozen at face value depreciates, while an indexed claim protects the bare owner and increases the deductible debt on death.
• Provide for the fate of a loss on the reinvestment: state whether the restitution covers the agreed amount or only the value of the reinvestment asset, to avoid a dispute among heirs.
• Trace the use of the funds: a reinvestment in an SCI requires clear accounting of the current account and the claim, in connection with the choice of SCI under corporate or personal income tax.
• Keep the value history (sale price, scale used) for computing the duties due from the bare owner when the time comes.
• Have the whole validated with your tax-focused chartered accountant and, for the deed, with the notary.

• The article 774 bis exception targets the sale price of a split asset, not the direct gift of money: do not confuse the two origins, the tax regime is not the same.
• The proof of the absence of a mainly fiscal purpose lies with the taxpayer: an undocumented arrangement is exposed in a tax audit.
• Without a registered agreement, the claim risks being unenforceable, which ruins the intended inheritance effect.
• The non-deductible claim does not escape tax: inheritance transfer duties are then due from the bare owner, which must be anticipated in the transmission plan.
• Reinvesting the cash in an SCI requires rigorous accounting: the restitution claim must appear clearly, failing which heirs may dispute it.
• Any indexation of the claim and its fate in case of a loss on the reinvestment must be provided for in the agreement, otherwise the bare owner may be harmed.

• Quasi-usufruct (Civil Code art. 587) applies to consumable things such as money: the usufructuary freely disposes of it and must return the equivalent at the end, as a rule on their death.
• After the sale of a split asset, it lets the usufructuary keep and reinvest all the cash (for example in an SCI) instead of splitting the price under the scale of article 669 of the Tax Code.
• The restitution claim arising for the bare owner, when deductible, reduces the taxable estate and eases the duties due from the heirs.
• Since article 774 bis of the Tax Code (finance law for 2024), the claim arising from a gift of cash is no longer deductible and the sum is brought back, the duties being borne by the bare owner.
• Quasi-usufruct over the sale price of a split asset benefits from an express exception and remains deductible, provided there is no mainly fiscal purpose.
• A registered quasi-usufruct agreement, setting the amount, the indexation, the use of the funds and the restitution terms, is essential to secure deductibility.
• The indexation of the claim and the fate of a loss on the reinvestment must be settled in the deed, failing which the bare owner or the usufructuary's estate may be harmed.