End of the deferral of taxation on a contribution of securities (150-0 B ter): events that make the capital gain taxable

The deferral of taxation on a contribution of securities to a company (Article 150-0 B ter of the French General Tax Code) ends in four cases listed by the BOFiP (Official Bulletin of Public Finances): the sale, repurchase, redemption, or cancellation of the securities received in exchange for the contribution; the same transactions on the contributed securities, if they occur within three years of the contribution; the same transactions on shares in intermediary companies or groups; and the transfer of tax residence outside of France. The capital gain whose deferral expires is then taxed for the year in which the deferral expires, according to the rules and tax rate applicable to the year of the contribution.

The gift of received securities is not in this list: it is dealt with further below.

This page deals with the closing events. It does not cover the conditions for obtaining the deferral, the activities eligible for reinvestment, or the tax rates. It follows the administration's guidelines (versions of 27/08/2026 and 10/08/2026).

The four events in one table

Case 1: You sell or lose the securities received

You contributed your shares to a company and received shares from them in exchange. If you sell these received shares, the deferral ends.

The BOFiP (French Official Tax Bulletin) gives a broad definition to the transfer for consideration: "all transfers that involve consideration in favor of the transferor." This covers exchanges and contributions to companies. A buyback by the issuing company has the same effect.

The redemption of received securities also triggers the expiry of the deferral period. If the redemption is partial, only the corresponding portion is taxed. Cancellation, for example following a capital reduction, triggers the expiry of the deferral period in the year of the cancellation. When the cancellation results from a merger or division, the BOFiP (French Official Tax Bulletin) refers to its commentary on specific cases.

Case 2: The company sells the shares you contributed to it.

This scenario requires the most planning. The company that received your shares sells, buys back, redeems, or cancels them. If this event occurs within three years of the share contribution, calculated from date to date, the deferral ends.

After 3 years, no further events affecting the contributed securities will terminate the deferral. The deferral remains in effect until one of the other events in the table (1°, 3° or 4°) occurs.

The exception: committing to reinvest

The deferral is not called into question if the company receiving the contribution undertakes to invest at least 70 % of the proceeds of the sale, within a period of 3 years from the date of the sale.

Three clarifications, taken from the BOFiP:

• The threshold is measured on the overall price. The BOFiP assesses it on the sale price and any additional payments. It specifies that the product taken into account is net, where applicable, of the costs and expenses actually incurred by the selling company (§70, remark 2).
• Reinvestment must be part of a long-term perspective. For direct reinvestment, the acquired assets or securities must be held for at least 5 years, calculated from their registration as assets of the company. Other reinvestment methods have their own conditions, not detailed here.
• If the condition is not met, the postponement expires. According to the BOFiP (Official Bulletin of Public Finances), taxation occurs for the year in which the three-year holding period expires, calculated from the date of the transfer, or for the year in which the holding requirement ceases to be met. Late payment interest accrues from the date of the contribution. The revised section of the BOFiP refers to "the capital gain concerned" without specifying whether the tax applies to all or part of the deferred capital gain: this point should be verified with the source.

Any reinvestment in securities or funds carries a risk of capital loss.

What the 2026 budget law has changed

BOFiP ACTU-2026-00099 (10/08/2026) describes the provisions resulting from Law No. 2026-103 of February 19, 2026, Article 11. They apply to transfers of contributed securities carried out from February 21, 2026.

Case 3: Intermediary companies or groups

The BOFiP (Official Bulletin of Public Finances) includes a specific case for shares or rights in intermediary companies or groups. This requires an analysis of your structure and is not detailed here.

Case 4: You are leaving France

According to the BOFiP (French Official Tax Bulletin), transferring one's tax residence outside of France is an event that terminates the deferral. The BOFiP cites Article 167 bis of the French General Tax Code (CGI) for this case.

The rules of the departure itself (tax domicile, exit tax) are the subject of another page.

Donating the received securities does not end the deferral

You are giving full ownership of securities received as consideration for the contribution, the capital gains on which are deferred. The BOFiP (French Official Tax Bulletin) states that you are "permanently exempt from income tax and social security contributions on these capital gains." The deferral is transferred to the donee, if the conditions of paragraph II of Article 150-0 B ter are met. The BOFiP also addresses the case of a donee who controls the company that issued the transferred securities.

For a gift with divided ownership, the capital gain is definitively exempt for the donor on the portion transferred. The donor retains the right to defer the tax on the portion reserved for themselves.

The donee is bound by a time limit. According to BOFiP news, the deferral expires in the event of sale, contribution, redemption, or cancellation of the transferred securities within a period of 6 years from the date of their acquisition by the donee (5 years before the 2026 Finance Act), increased to 11 years old in the case of investment (10 years prior). These time limits apply to transfers of contributed securities carried out from February 21, 2026. The time limit is calculated from the date of transfer.

Three clarifications from the BOFiP:

• If the event results from the disability (2nd or 3rd category), dismissal or death of the donee, his or her spouse or civil partner, the deferred capital gain is permanently exempt.
• The transfer of the donee's tax residence outside of France is treated by the BOFiP (French Official Tax Bulletin) as a transfer for consideration. It causes the deferral to expire if the 6 or 11-year period has not yet elapsed.
• If the company receiving the contribution sells the contributed securities, the 3-year period begins from the date of the contribution.

The exact number of the paragraph of article 150-0 B ter which refers to the gift is not repeated here: the texts of the administration do not present it in the same way.

When the event occurs: what is imposed, and until when?

Capital gains whose deferral expires are taxed in the year the deferral expires, according to the BOFiP (French Official Tax Bulletin). The tax base and rates are those of the year of the contribution, including social security contributions. If the event only concerns a portion of the securities, only the relevant portion is taxed.

The administration's right to reassess can be exercised until the end of the third year following the year for which the tax is due.

Each year, the amount of capital gains carried forward is entered on line 8UT of the income tax return (2042), with follow-up on form 2074-I.

Numerical example (fictitious profile)

Situation. Nadia contributed her company's shares to her holding company on March 14, 2025. The deferred capital gain is €900,000. On November 20, 2026, the holding company sells these shares for €2,500,000. Assuming no sale costs or expenses, the retained proceeds are €2,500,000.

Issue. The sale falls within 3 years of the contribution (until March 14, 2028) and after February 21, 2026. The deferral ends unless there is a commitment to reinvest. How much must the holding company invest, and by what date?

Strategy. Compare two reinvestments: €1,800,000, then €1,500,000.

Result.

The reinvestment must take place within 3 years of the sale, i.e., by November 2029 in this example (calculation method to be verified in the BOFiP). In the second case, late payment interest accrues from March 14, 2025, and the tax authorities can exercise their right to reassess until the end of 2032 if the tax is due for 2029. If the sale costs were €50,000, the threshold would be €1,715,000 ((€2,500,000 – €50,000) x 70 %).

This profile is fictitious. The dates, amounts, and absence of fees are assumptions. The example does not calculate the tax; it shows the schedule and the threshold.

What changes depending on your situation

• The date of the event compared to the 3 years of the contribution, and compared to February 21, 2026.
• The existence of reinvestment and the nature of the assets acquired.
• A gift planned, with a period of 6 or 11 years for the donee.
• A plan to leave France, whether it is you or the donee.

The rule depends on your situation. No results are guaranteed.