France updates business and real estate succession rules

Recent updates to the BOFiP and the 2026 finance law in France have introduced new complexities for business succession under the Dutreil pact. While the pact offers a 75% tax abatement on share value, certain assets held by a company may now be excluded from this exemption. Assets such as passenger vehicles, yachts, private planes, jewelry, art, and certain residential properties may be disqualified if they are not exclusively dedicated to professional activities. To maintain the tax advantage, business owners must provide clear proof that assets are effectively used for the company's operations.

In parallel, planning the transmission of real estate assets remains a critical component of wealth management. Anticipating the transfer of property through donations, wills, or civil societies can prevent heirs from entering into joint ownership (indivision), which often leads to management difficulties and disputes. Effective strategies require a precise inventory of assets, including estimated values, outstanding debts, and rental income, to manage future inheritance taxes and ensure the continuity of property maintenance and decision-making.