France reforms inheritance tax tools and overturns free succession fee rules

The 2026 French finance bill keeps the core of the Pacte Dutreil, a long‑standing exemption that removes 75 % of the value of family‑owned business shares transferred by donation or inheritance, but tightens two key conditions. The individual holding period for transferred shares is extended from four to six years, and the exemption now applies only to a limited list of assets directly linked to the qualifying business activity. The changes aim to preserve the instrument for family business continuity while encouraging longer‑term shareholding.

Separately, the French Constitutional Council upheld the overall cap on bank charges for succession procedures – 1 % of the deceased’s assets, limited to €857 – but struck down the provisions that had made fees completely free for simple, modest or minor successions. Effective from 19 June 2026, banks may again charge fees in those cases, reversing a consumer‑protection measure introduced in 2025.

Both actions reflect a balancing act by the government to maintain support for intergenerational business transfers while limiting automatic tax or fee waivers that were judged to infringe on contractual freedom.