Donation of company shares before age 70: the 50% tax reduction (%) and its relationship with the Dutreil agreement

When the donor is under 70 years of age, a tax reduction of 50% may apply, under certain conditions, to the outright donation of shares or stock that meet the conditions of Article 787 B of the French General Tax Code (CGI) (company engaged in an industrial, commercial, craft, agricultural, or professional activity). This reduction is applied last, to the amount of tax remaining due, after the 75% exemption under the Dutreil agreement. It does not apply to a donation involving a split ownership interest.

The date is just as important as the age. The donor's age and the form of the gift determine the tax reduction. The date of the transfer determines the duration of the agreement.

The 50 % reduction: what the texts say

The BOFiP (Official Bulletin of Public Finances) describes the tax reduction as follows: it applies to outright donations of shares or stock that meet the conditions listed in Article 787 B of the French General Tax Code (CGI), concerning companies engaged in industrial, commercial, craft, agricultural, or professional activities. It also covers donations of all, or an undivided share, of the assets of a sole proprietorship (Article 787 C).

The age requirement applies to the donor: they must be under 70 years old, an age assessed at the time of the donation according to service-public.gouv.fr (the BOFiP does not specify this in the passages reviewed). This page does not address the case of an older donor.

The service-public.gouv.fr information sheet on donating shares in a SARL or EURL also mentions a commitment from the recipient to retain a certain number of shares for at least two years. The specific conditions can be verified in your file.

The reduction is provided for by article 790 of the CGI and commented on by the BOFiP (BOI-ENR-DMTG-20-30-20-50).

Full ownership only

The reduction does not apply to a split ownership arrangement. According to the BOFiP (French Official Tax Bulletin), transfers of bare ownership or usufruct are excluded from the scope of the reduction under Article 790.

Three consequences:

• A gift of securities with reservation of usufruct does not benefit from the 50 % reduction.
• In the case of a mixed donation, with assets in full ownership and assets with divided ownership, a double liquidation is necessary.
• For a holding company, the reduction only applies to the fraction of value that represents the shares of the operating company.

For the value of a donation with reservation of usufruct, see the page dedicated to bare ownership.

Combining it with the Dutreil pact

The 50 % reduction is applied last, to the amount of duties due. It therefore comes after the 75 % partial exemption under Article 787 B. The public service information sheet indicates that it can be combined with allowances and the Dutreil agreement.

The order is as follows:

1. The exemption of 75 % of the value of the shares, if the conditions of the pact are met.
2. The calculation of rights on the remaining basis, under the conditions of common law.
3. The 50 % reduction on the amount of duties due.

The terms of the agreement for shares in a SARL or EURL

For a donation of shares in a SARL or EURL, the public service website outlines the conditions of the agreement:

• exemption of 75 %; ;
• collective commitment of at least two years on 17 % of financial rights and 34 % of voting rights; ;
• individual commitment of six years for each donee, starting from the end of the collective commitment (BOFiP); ;
• management function exercised until the end of the conservation commitment and for the three years following the transfer (BOFiP); ;
• Eligible active holding companies, excluding asset management companies (SCI).

The individual commitment period is six years for transfers beginning on or after February 21, 2026. It was four years before that date. The page dedicated to the Dutreil agreement details these commitments.

The formalities of donating shares in a SARL or EURL

• The donation must be made by notarial deed. Manual gifts of shares are prohibited.
• A non-partner must be approved, unless they are a spouse, ascendant or descendant, unless otherwise stipulated.
• The articles of association are amended and the filing is done at the formalities counter.
• The taxes are normally the responsibility of the donee.

These formalities apply to shares in SARLs and EURLs. For other types of companies, they are examined on a case-by-case basis.

The gift-partition: a fixed value

A gift-partition is a notarial act. It transfers and distributes assets among heirs during the donor's lifetime. With few exceptions, the value of the gifted assets is fixed on the date of the gift. It is not revalued upon death to calculate the reserved portion of the estate and the disposable portion.

A forced heir cannot be excluded. A multigenerational gift-partition, in favor of grandchildren, requires the consent of the children.

This page does not deal with the gift-sharing of a business.

The allowance and the scale remain applicable

Up to a limit of €100,000 per donor and per direct heir, over a 15-year period, the tax allowance applies. Beyond this limit, the tax rate for direct heirs ranges from €5 to €45. These rules are explained on the page dedicated to gifts and the 15-year tax clawback period.

Numerical example (fictitious profile)

Situation. A 58-year-old father gives his daughter, in full ownership, 100 shares of his company, valued at €1,000,000. The conditions of the Dutreil agreement are met. Six years earlier, he had given her €100,000. Under the assumption of this example, this earlier gift is entirely covered by the €100,000 allowance, which is calculated over 15 years; therefore, no allowance remains available for this gift.

Issue. The same donation can cost very differently depending on whether the pact and the reduction apply or not.

Strategy. The firm is reviewing with the manager, his notary and his lawyer the date of the donation, the form of the transfer and the schedule of commitments.

Result.

Breakdown of €250,000: €403.60 + €403.70 + €573.45 + €46,813.60 = €48,194.35. The 50% tax reduction brings this amount down to €24,097.18 (rounded). The difference compared to a gift without an agreement or reduction is €228,580.97.

This profile is fictitious. The figures assume that all the conditions of the agreement and the tax reduction are met and maintained, that no excluded assets are held by the company, that the tax brackets remain unchanged, and that the allowance has already been exhausted, as indicated above. They do not predict any results for your family.

What changes depending on your situation

• The donor's age at the time of the donation.
• The form of the donation: full ownership or division of ownership rights.
• The nature of the company and its activity, and compliance with the conditions of Article 787 B.
• The date of the donation, in relation to February 21, 2026.
• Donations already made to the same recipient over the last 15 years.
• The number of beneficiaries: the individual commitment is made by each person.

These factors determine what applies to your situation. No results are guaranteed: the rule will be verified on your case.