Amid the budget debate in the National Assembly, changes to the Dutreil Pact are among the measures being considered.

A quick reminder: Created in 2003, the Dutreil Pact aims to ensure the long-term viability of family businesses by preventing heirs from being forced to sell the company to pay inheritance taxes.

Subject to certain fairly strict conditions (including commitments to retain the securities and to continue performing management duties), the “Dutreil Pact” allows for a 75% partial exemption from the taxable base in the event of the early transfer of a business engaged in industrial, commercial, professional, craft, or agricultural activities. The taxpayer is then taxed only on 25% of the value of the securities.

This mechanism helps facilitate the transfer of French family-owned businesses and ensures the continuity of their operations.

This helps ensure that jobs are preserved and that the local economy remains stable in these regions.

Often criticized by its detractors, who portray it as nothing more than a tax loophole, it has frequently been under threat, particularly in recent months.

Some believe that its use sometimes strays from the original intent of the system and that it is too focused on optimization.

Consequently, although it is also—and above all—a key tool for ensuring the long-term viability of family businesses, there is reason to fear that, in the context of budget cuts, the program will be scaled back.

Although the 2026 budget bill does not, at this stage, provide for any changes to the system, several amendments adopted by the Finance Committee are intended to tighten the rules:

• Extension of the individual conservation commitment from 4 to 6 years (for a total period of 8 years, unless the initial 2-year commitment can be “deemed fulfilled”)
• Prohibition on transferring property exclusively to minors: at least one of the donees must be between the ages of 18 and 70 on the date of the transfer
• Exemption limited to the portion of the market value of the securities corresponding to assets used in operational activities (the end of economic predominance?)

These amendments do not alter the bill, but they open the door to parliamentary debate and could signal a rollback of the benefits currently associated with this program.

What is the recommendation?

It is recommended that you carefully consider—and, if necessary, seek advice on—any plans for the early transfer of your business.

However, until these amendments are adopted in the bill, the applicable rules remain those in effect on the date of the gift.