Temporary usufruct over SCI shares: what needs to be checked?

Updated March 2026 - A temporary usufruct transfer over shares in a French real-estate company (SCI) is often described as a neat wealth-planning technique. In practice, that is only true if the transaction is built with real legal, tax and valuation discipline. Since Article 13(5) of the French Tax Code, the proceeds from a transfer for value of a temporary usufruct follow a specific tax regime. This is why the analysis cannot stop at the civil-law wording of the deed.

To place the transaction in its broader context, you can also read our articles on SCI under IS or IR, real-estate tax advice and SCI tax benefits.

Usufruct gives its holder the right to receive the income attached to an asset or right. When the underlying asset is an SCI share, the temporary usufruct holder may, for a defined period, receive the income stream attached to that share, typically through distributions made by the company.

This matters because the transaction does not transfer full ownership. The bare owner keeps the share itself, while the purchaser of the temporary usufruct acquires a limited economic right for a fixed duration. Duration, expected income and the rights attached to the share therefore need to be reviewed together.

Article 13(5) of the French Tax Code provides that the proceeds from the transfer for value of a temporary usufruct are taxed in the income category to which the income generated, or capable of being generated, by the transferred asset or right belongs.

In other words, the tax treatment follows the nature of the expected income, not simply the fact that the parties signed a transfer deed. That point is essential: a temporary usufruct transfer cannot be analysed as if it were an ordinary capital gain transaction.

The price paid for a temporary usufruct is one of the first points that may be challenged if the structure is reviewed later. A value that looks arbitrary, aggressive or disconnected from foreseeable distributions weakens the entire file.

Article 669 of the French Tax Code remains an important benchmark for split-ownership valuation in certain transfer-duty contexts, but it does not replace a serious economic analysis. A defensible valuation should reflect:

• ▸the expected income stream during the agreed period;
• ▸the length of the temporary usufruct;
• ▸the rights effectively transferred to the usufruct holder;
• ▸the financial reality and distribution policy of the SCI.

Hayot Expertise insight: a temporary usufruct transfer is not just an optimisation tool. It is a civil, tax and valuation operation that must remain coherent in its price, duration and business rationale.

• ▸incorrect tax qualification of the proceeds;
• ▸a valuation that cannot be supported with serious assumptions;
• ▸a duration or price disconnected from economic reality;
• ▸incomplete drafting on distributions, voting rights or expiry of the usufruct;
• ▸weak supporting documentation if the structure is later challenged.

Before signature, the file should be reviewed as a whole: why the arrangement is used, who benefits economically, how the price was built, how the rights are allocated between bare owner and usufruct holder, and how the transaction fits the SCI's broader wealth and tax strategy.

This review is particularly important when the operation is presented as a patrimonial tool, because the tax and legal analysis still has to be supported by a genuine economic purpose.

We can review the economic rationale, tax treatment, valuation approach and legal documentation of a temporary usufruct transfer involving SCI shares.

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In 2026, the temporary transfer of usufruct over SCI shares can still be useful in the right circumstances. But it only remains defensible when the structure is built with consistent pricing, credible documentation and a genuine civil and tax rationale. On this type of file, precision matters much more than presentation.

Need to validate the tax and valuation treatment before signing? We can audit the structure, identify weak points and help secure the documentation. Book an appointment with an expert