Conditions for applying the Dutreil agreement: Securing the transfer of your business assets in 2026

In summary… Conditions for the application of the Dutreil pact

THE Dutreil Pact is the most powerful business transfer mechanism under French law, allowing a exemption of 75 % The value of the securities is used to calculate transfer taxes. However, its implementation is a legal minefield: compliance with the holding thresholds (34 % or 17 % depending on the case), the duration of the commitments (2 years collectively + 4 years individually), and holding a management position are strict cumulative conditions. A single error in the declaration or failure to meet deadlines can result in the total forfeiture of the tax advantage.

1. Exemption: 75 % of tax reduction on the value of the business.
2. Time : 2 years of collective commitment + 4 years of individual commitment.
3. Action : A management function must be exercised by a signatory.
4. Risk : An error in threshold or formalism cancels out all the gain.

Recently, I was assisting the head of a Lyon-based SME who wanted to transfer his shares to his daughter. He assumed the "Dutreil" tax regime was automatic. Upon auditing his file with the Balmont AI, we discovered that the collective commitment had never been formally registered with the tax authorities. Without this immediate correction, his daughter would have had to pay taxes on 100% of the company's value instead of 25%. This difference amounted to hundreds of thousands of euros.

At the house of Balmont Conseil, We don't see the Dutreil Pact as a simple checkbox, but as a framework for protecting your business assets. Here are the rules for 2026.

1. Company eligibility: Who can claim the Dutreil Pact?

The exemption does not apply to all structures. The measure aims to promote the sustainability of operational businesses.

• Eligible activities: Industrial, commercial, artisanal, agricultural or professional.
• The case of the Operating Holding Company: This is a subject of case law major. To be eligible, the holding company must not only hold shares, but also actively participate in the management of the group's policy and provide cross-functional services. Family-owned real estate companies or companies of wealth management pure ones are, in principle, excluded.
• Operational activity: Since July 18, 2022, the activity requirement must be met without interruption, from the signing of the pact until the end of the individual commitment.

2. The collective commitment to conservation: The foundation of the system

To benefit from the article Article 787 B of the French General Tax Code, a collective conservation commitment must be made by the donor, for himself and his heirs, with other partners.

The detention thresholds

For unlisted companies (the most frequent case), the commitment must cover at least:

• 34 % voting rights
• 17 % of financial rights

For listed companies, these thresholds fall to 20 % and 10 % respectively.

Duration and formalism

This commitment must last at least two years. It must be in effect on the day of transfer (gift or death).

• Commitment "Deemed acquired": If you meet the required thresholds and have held a management position for more than two years, the agreement can be considered fulfilled. This is an attractive option, but it requires careful review to avoid any risk of reclassification.

3. Individual commitment: The responsibility of the buyer

Once the transfer has been completed, the heirs or donees take over.

Each beneficiary must undertake, in the deed of gift or inheritance, to retain the securities received for a minimum period of four years. This period begins to run from the end of the collective commitment.

Calculation of the blocking horizon: Collective Commitment (2 years) + Individual Commitment (4 years) = 6 years minimum overall storage. For the donor, planning often begins 8 years before the actual exit.

4. The management function: Mandatory steering

The Dutreil Pact requires that one of the signatories of the commitment (the donor or one of the heirs/donees) actually holds a management position in the company.

• During the collective commitment: Management must be ensured by one of the signatory partners.
• After the transmission: The management must be ensured by one of the heirs or donees who subscribed to the individual undertaking, and this for the duration of the 3 years which follow the transmission.

Alexis Sagnier's opinion: «Many leaders think they can hand over the reins and retire immediately. This is a mistake. Co-management between the donor and the successor is often the safest strategy to fulfill this condition while ensuring a smooth transition.»

5. Taxation: A massive advantage not to be squandered

The main advantage is a exemption of 75 % on the value of the shares or stocks.

Example calculation:

For a company valued at €4,000,000 passed on to a child:

1. Without Dutreil: Taxable base = €4,000,000. Inheritance tax estimated at approximately €1,500,000.
2. With Dutreil: Taxable base = €1,000,000 (25% of the value). After the parent/child allowance of €100,000, the tax falls to approximately €212,000.

Tax savings: More than 1.2 million euros.

Data Factsheet: Summary of conditions 2026

FAQ

• Does the Dutreil agreement apply to holding companies? Yes, if it is a holding animator. For a pure (passive) holding company, the structure is much more complex and requires the use of intermediary companies.
• What happens if the rules are not followed? This is the "recall of rights". You will have to pay the 75 % of taxes saved, plus late payment interest and potentially penalties of 40 %.
• Can one give bare ownership? Yes, the division of ownership is fully compatible with the Dutreil scheme, allowing for an even further reduction of the taxable base.

6. Reporting obligations: The crux of the matter

This is where cases are won or lost. reporting obligations are strict:

1. Registration of the initial agreement with the DGFiP.
2. Supply of company certificate certifying that the commitments are respected, at the time of transmission and then upon request from the administration.
3. Compliance with the article 294 bis from Annex II of the CGI concerning annual monitoring.

Attention : Failure to comply with a simple administrative formality may be enough for the tax authorities to call into question the entire arrangement.

7. Conditions of prior detention: Anticipation as a safeguard

THE Dutreil Pact It cannot be a last-minute arrangement hastily assembled in a hospital bed or the day before a signing. The legislator requires a prior ownership period to ensure that the scheme truly benefits the stability of family businesses.

The principle of two-year detention

As a general rule, for a collective commitment (or a deemed commitment) to be valid, the securities must have been held by the donor since at least two years. This delay helps to avoid the windfall effect of buying shares solely to transfer them immediately with a 75% tax allowance.

Exceptions to the deadline: Creation and Free of charge

Tax law can be pragmatic in two specific situations where the two-year period is neutralized:

• Acquisition free of charge: If the current donor had previously received the securities through a gift or inheritance, no new waiting period is required. The "counter" does not reset.
• Company creation: If you founded the company, the exemption applies regardless of the time elapsed since registration (although in practice, a start-up is rarely in the immediate transfer phase).

The scope of detention: Spouse, PACS and Cohabitation

One of the strengths of the system lies in taking into account the extended family circle to reach the thresholds for financial rights (17 %) and voting rights (34 %).

• Ownership by the deceased or the donor alone: This is the classic case.
• Detention with spouse: Securities held by the spouse are taken into account when calculating the thresholds.
• Civil partner and common-law partner: This is a specific point worth noting. The tax authorities recognize the securities held by the civil partner or cohabiting partner (if the cohabitation is public knowledge) to validate eligibility for the pact.

Balmont's Eye: «"Be aware that while cohabitation allows you to meet the 34 % threshold for the Dutreil Pact, it offers no protection against the 60 % inheritance tax between third parties. Don't confuse 'eligibility of the arrangement' with 'survivor's civil liability protection'. This is where our AI's 360° audit becomes crucial to avoid a tax victory that masks a civil liability disaster."‘

Data Factsheet: Dutreil ownership thresholds (unlisted companies)

Conclusion: Do not transmit without a safety net

The Dutreil Pact is a meticulously crafted tool. While it offers unparalleled financial freedom to the next generation, it imposes iron discipline on the current leader. Balmont Conseil, We use Balmont AI to simulate the robustness of your pact against the controls of the Directorate General of Public Finances.

Is your company ready for an optimized transfer?

Don't let a formal error ruin decades of work.

Sources:

• General Tax Code: Articles 787 B and 787 C.
• Official Bulletin of Public Finances (BOFiP): Section on transfers free of charge.
• Case law of the Court of Cassation on the management of holding companies.
• PACTE Law (2019): Relaxation of ownership thresholds.

Everything you need to know about the Dutreil pact :

• Definition of the Dutreil pact: everything you need to know about this business transfer tool
• Advantages of the Dutreil agreement: Securing the transfer of your family business in 2026
• Disadvantages of the Dutreil pact: The pitfalls and risks of a highly monitored system
• The Dutreil Pact and Taxation: The Expert Guide to the 2026 Reforms
• Objectives of the Dutreil Pact: To secure the continuity and sovereignty of the family business
• Dutreil Pact and family businesses: Securing the transfer and protecting your business assets
• Conditions for applying the Dutreil agreement: Securing the transfer of your business assets in 2026
• Inheritance planning: The expert guide to navigating inheritance, taxation and family protection
• Inheritance planning: The expert guide to anticipating, protecting and optimizing your legacy in 2026
• Transferring a family business via the Dutreil agreement: The strategic guide to ensuring the long-term viability of your family business