Tax deferral vs tax carry-forward (150-0 B and B ter): how to tell them apart in 2026

Updated March 30, 2026 - Tax deferral and tax carry-forward both postpone the taxation of a capital gain on securities, but their mechanics differ radically. Company directors who structure a contribution to a holding company, a sale of securities or a merger transaction frequently confuse the two regimes. The gap is sometimes measured several years after the transaction, when a later disposal or a missed reinvestment reveals the latent tax bill.

Tax deferral applies automatically to share-exchange transactions: a contribution to a company subject to corporate income tax (IS) that the contributor does not control, a merger, a spin-off, or a public exchange offer. The mechanism is codified in Article 150-0 B of the French General Tax Code (CGI).

Three characteristics define it:

• Automatic: no option to elect, no specific filing beyond tracking the acquisition price.
• Tax neutrality: the capital gain is neither calculated nor taxed at the time of the contribution. It re-emerges on the later disposal of the securities received in exchange, based on the acquisition price of the contributed securities.
• No maintenance condition: no reinvestment obligation, no holding period imposed to preserve the deferral. The clearing happens mechanically on the next sale.

Deferral requires that the contributed securities be remunerated almost exclusively in shares of the receiving company. A cash balancing payment greater than 10% of the par value of the shares received disqualifies the transaction.

To explore further, see Share transfers, Setting up a holding company after a corporate buyout: case study and BSPCE: pros, cons, 2026 user guide.

Tax carry-forward targets a specific situation: the contribution of securities to a company subject to corporate income tax (IS) and controlled by the contributor — typically, a contribution to a wealth-management holding company. Introduced by the 2012 amended Finance Act and codified in Article 150-0 B ter of the CGI, this regime is mandatory whenever control is established (directly, indirectly or with the family group).

Unlike deferral, carry-forward does not extinguish the capital gain: it calculates it at the time of contribution and suspends its taxation as long as the regime's conditions are met. The capital gain is locked in at its original date; it is recalled on a triggering event that ends the carry-forward.

Four events can end the carry-forward:

1. Sale for consideration, redemption, repurchase or cancellation of the securities received in remuneration of the contribution (the holding company's shares).
2. Sale of the contributed securities by the holding company within three years of the contribution, without reinvesting 60% of the proceeds into an eligible economic activity within 24 months (CGI art. 150-0 B ter, II-2°).
3. Transfer of tax residence outside France (exit tax mechanism — CGI art. 167 bis).
4. Donation of the securities received followed by a sale within a period shorter than 5 years (10 years for reinvestments into securities subject to a long holding period).

The 60% threshold (raised from 50% to 60% on January 1, 2019) drives most of the litigation. If the holding company sells the securities received as a contribution within three years, it must reinvest at least 60% of the disposal proceeds into:

• an eligible commercial, industrial, craft, professional, agricultural or financial activity carried out by the holding company itself or by a company it controls;
• the subscription to the initial capital or to a capital increase of a company meeting the same criteria;
• the subscription of units in tax-eligible FCPR, FPCI, SLP or SCR private-equity vehicles (the holding period then extends to 5 years).

The reinvestment must take place within 24 months of the sale and be held for at least 12 months (5 years for private-equity vehicles). Failure to commit, or failure to respect the holding period, triggers the immediate forfeiture of the carry-forward on the entire initial capital gain.

Article 150-0 D ter provides a fixed allowance of 500,000 EUR on the capital gain from the sale of shares realized by a director of a small or medium-sized enterprise (SME) retiring from business. Extended by the 2024 Finance Act, this regime applies to disposals occurring up to December 31, 2031.

The allowance does not stack with the carry-forward: it presupposes a direct sale by the director, not a prior contribution to a holding company. The choice must therefore be made upstream:

• Direct sale + 500K EUR allowance: relevant if the director wants to mobilize the proceeds into personal wealth (primary residence, donation, free investment).
• Contribution-sale via a holding company (carry-forward): relevant if the director wants to reinvest into a new economic activity and avoid immediate taxation.

A director owns 100% of an SAS (simplified joint-stock company) valued at 5,000,000 EUR, with a historical acquisition price of 500,000 EUR. The latent capital gain therefore amounts to 4,500,000 EUR.

Conversely, if the holding company reinvests only 2M EUR or lets the 24-month deadline pass, the carry-forward falls: the 4.5M EUR capital gain is recalled at the flat-rate withholding (12.8% + 17.2% social contributions, i.e. 30%), plus late-payment interest. The tax bill then reaches 1,350,000 EUR on top of which penalties apply.

In practice, the director and the holding company's board should formalize the reinvestment plan before signing the deed of contribution. A written investment policy, supported by a target pipeline of operating companies or eligible private-equity funds, secures the substance of the carry-forward and protects against a challenge by the French tax authority (DGFiP) several years later. The investment committee minutes, the subscription agreements and the bank-transfer evidence form the core of the audit file.

When the director plans to relocate abroad after the contribution, the carry-forward turns into an exit-tax matter. The transfer of tax residence outside France (CGI art. 167 bis) triggers the immediate taxation of the deferred gain, with a possible automatic payment deferral if the new country of residence is in the European Economic Area. For a relocation to a non-EEA country, a guarantee may be required and the technical file must be reviewed by a French chartered accountant and a tax lawyer well before the move.

Tax carry-forward relies on annual follow-up. Three forms structure the audit trail:

• Form 2074-I: declaration of the contribution and of the capital gain placed under carry-forward, attached to form 2042-C in the year of the transaction.
• Form 2042-C, line 8UT: indication of the amount under carry-forward every year until clearing.
• Follow-up statement: retention of reinvestment evidence (deeds, articles of association, subscription certificates) throughout the carry-forward period and for 3 years after clearing.

The absence of this follow-up is a frequent cause of tax reassessment, even when the regime is otherwise compliant on the substance.

Hayot Expertise tip — Before any contribution to a holding company, validate three points with your advisor: the qualification of control (more than 50% of the capital or effective management power), the disposal strategy for the contributed securities within 3 years, and the planned reinvestment vehicle. These three variables condition the legal security of the carry-forward over 10 to 15 years.

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