Pacte Dutreil: the complete guide to a successful business transfer

Pacte Dutreil: the complete guide to a successful business transfer#

The Pacte Dutreil is one of the most important French tax tools for business transfers. When the conditions are met, it allows a 75% partial exemption from gift or inheritance tax on the value transferred.

For family-owned businesses, this can make the difference between a realistic transfer and a forced sale.

Its purpose is to reduce the tax cost of transferring:

• a business;
• or shares in an eligible company.

It is especially useful where:

• the company value is significant;
• heirs have limited liquidity;
• and the family wants to keep the business.

The mechanism relies on several pillars:

• an eligible operational activity;
• minimum holding thresholds;
• conservation commitments;
• and a management function exercised for the required period.

In group situations, the analysis often turns on:

• holdings;
• mixed assets;
• governance reality;
• and documentary support.

According to the French Ministry's summary of the 2026 Finance Act, two points deserve attention:

• certain assets not exclusively used for the business are excluded from the 75% exempt base;
• the individual holding commitment is lengthened from 4 years to 6 years.

This does not make the regime irrelevant. It makes preparation more important.

Reinforced annual reporting obligation#

Under the reform, Pacte Dutreil beneficiaries must file an annual compliance certificate with the French tax authorities. This certificate confirms that the conditions of the collective and then individual commitment are still met (holding thresholds, management function, eligible activity). Failing this, the tax benefit may be challenged. This requires documentary discipline throughout the holding period — now extended to 6 years for the individual commitment.

Take Philippe, owner of a B2B services company valued at EUR 4 million. One child will run the business, the other will not. The company also holds non-operational assets. A proper restructuring and transfer plan can materially reduce tax cost while improving governance and family balance.

Simplified illustration#

For purely illustrative purposes, on an eligible share base of EUR 2 million:

• without Pacte Dutreil: the taxable base remains EUR 2 million, with transfer duties quickly reaching several hundred thousand euros after direct-line allowances;
• with Pacte Dutreil (75% exemption): the taxable base drops to EUR 500,000, a reduction in tax payable of around 75%;
• with Pacte Dutreil + donation before age 70 (50% reduction of duties, article 790 of the French Tax Code): cumulative tax reduction can exceed 85% versus the base scenario.

These orders of magnitude assume a properly structured file and fully met conditions. They must be confirmed by a personalised simulation integrating the actual asset mix, applicable allowances and the timing of the transfer.

Would you like to model this strategy for your business? Book a personalised review with our team.

Expert note

The most common mistake is waiting to think about Dutreil until the day the family is ready to transfer. The system rewards anticipation, not improvisation.

We help with:

• financial clarity;
• operational versus non-operational asset review;
• valuation scenarios;
• and coordination with the notary and legal advisers.

The Pacte Dutreil remains a major transmission tool in 2026, but it requires more discipline than ever on eligibility, assets, governance and timing.

Hayot Expertise in Paris 8 supports business owners end to end to secure eligibility and prepare a controlled family transfer.