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The Dutreil scheme and passing on family businesses


Subject to certain conditions, the Dutreil scheme allows three-quarters of the value of a family business to be transferred without any liability for transfer tax

  • Work of Dutreil scheme

    • The transfer of shares in companies and one-person businesses (whether industrial, commercial, craft-based, agricultural businesses or self-employed professionals) is eligible for a tax exemption when the property is transferred in the form of a gift or as an inheritance , whether the transfer involves full ownership or subdivision of ownership (for example only the bare ownership or the usufruct ).

    • The exemption applies to ¾ of the value of the shares or the business.

  • Conditions for eligibility for this exemption for companies:

    • The tax scheme to which they are subject (income or corporate tax) has no effect on eligibility.

    • Gifts of a usufruct or with a reserved usufruct may be eligible for partial exemption, which is applied to the value of the usufruct or bare ownership transferred.

    • Shares in group management holding companies are eligible for this allowance.

    • The shares must be the subject of a joint undertaking by shareholders to keep them for at least two years as of the date on which the instrument recording the undertaking is registered for tax purposes or as of the date of signature of the instrument if it is a notarial instrument. The undertaking must cover at least 20% of the shares if the company is listed on a stock exchange, or 34% if it is not listed.

    • However, a joint undertaking is deemed to exist when the deceased or the donor has held the required number of shares (20% or 34%) for at least two years and performed the role of manager or pursued their main business activity within the company for at least two years.

    • Moreover, when no joint undertaking was signed before the transfer due to death, a joint undertaking to retain the shares may still be signed between the heirs or legatees, or between them and other partners up to six months after the death.

    • At the time of the transfer due to death or by gift, each heir , legatee or donee must undertake to retain the transferred shares for four years.

    • One of these transferees must carry on their main business activity or act as manager within the company transferred while the joint undertaking is valid and for three years after the transfer.

  • Conditions for eligibility for this exemption for one-person businesses

    • One-person businesses are also partially exempt from transfer tax under the following conditions:

    • The deceased or donor must have owned the business for at least two years. However, no minimum period is required when the business being transferred was acquired free of charge or when a new business was created.
    • Each heir, legatee or donee must give an individual undertaking in the statement of inheritance or deed of gift to retain the company for four years. One of these transferees must actually run it for three years after the transfer.
    • The effect of all these measures, which are specific to the transfer of companies, and the more general measures on gifts and inheritance, is to ensure that only the wealthiest or badly advised heirs are eligible to pay taxes on transfers of family companies.

See also


The role of the Notaire