France Wants Gifts of Holding Shares to Stop Erasing Deferred Tax

For over a decade, French founders have used a familiar sequence before selling a business. They move the shares into a personal holding company, let the holding sell, and reinvest the money. The tax on the gain is put on hold. If the holding shares were later given to the children, or passed on at death, that tax could disappear for good.

The government’s 2027 finance bill, filed on 1 October 2026, would close that door. Under its article 5, a gift or inheritance of the holding shares would make the deferred tax payable, and the rule would reach back to transfers made from 1 October 2026. As of 12 October 2026, this is only a proposal. In its first week the economy minister promised to rework it, a committee rewrote it, and the full debate will restart from the original text. (For the basics of holding companies, see Holding Structures in Plain English.)

How “apport-cession” works

The name means “contribution, then sale”. The regime sits in article 150-0 B ter of the French tax code and applies to gains made since 14 November 2012. In plain terms:

1. The owner contributes the shares of the operating company to a holding company that he or she controls and that pays corporate tax. The holding pays with its own new shares.
2. The gain on the contributed shares is calculated but not taxed. The tax is deferred until a later event.
3. The holding sells the company. Its own gain is small, because it received the shares at their current value, so nearly the whole price stays inside.

The deferral has conditions. If the holding sells within three years of the contribution, it must reinvest part of the proceeds in an eligible business activity. The 2026 finance law tightened this for sales from 21 February 2026: the share to reinvest rose from 60% to 70%, the deadline from two to three years, and the new investments must be kept for five years. If the founder later sells the holding shares, the deferred tax becomes due.

How a gift used to wipe the slate clean

Two events made the deferred tax disappear.

• Death. If the founder died still owning the holding shares, the deferred gain was erased.
• Gift. If the founder gave the holding shares to children who then controlled the holding, the deferral passed to them. If they kept the shares long enough, the gain was erased. Under the 2026 rules that period is six years, or eleven for some fund investments, up from five and ten.

Gift or inheritance duties still applied, but the income tax on the original gain was never collected. LégiFiscal, summarising the government’s case, reports that gains in deferral doubled between 2021 and 2023 to €34 billion and are concentrated among the richest 0.01% of taxpayers. The government says it wants to return to the “original spirit” of the scheme: a pause that supports reinvestment, not a write-off.

What article 5 proposes

The bill replaces “sale” with “transmission” in the list of events that end the deferral. A gift or an inheritance would then trigger the tax.

• What is due. The deferred income tax and social charges. In LégiFiscal’s example, shares that cost €100,000 and were contributed in 2022 at €5 million carry a €4.9 million deferred gain. Giving the holding shares to two children in 2027 would mean a bill of about €1.47 million for the founder at once, roughly 30%.
• How to pay. On request, the income tax could be spread over five years, with guarantees. Social charges would be due immediately.
• From when. Transfers made from 1 October 2026, the day the bill was presented to the Council of Ministers. A gift signed in early October could be caught if the text passes as drafted.
• People who left France. Similar wording would end the deferral of French exit tax when shares are given or inherited.

The same bill also offers an incentive. Article 4 would, for gifts made between 1 January and 30 June 2027, raise the tax-free allowance for cash gifts to children, grandchildren and great-grandchildren from €31,865 to €50,000. Cash gifts of up to €100,000 would be taxed at a flat 6%, or 5% if the recipient passes 1.1% to certain charities. The recipient must be aged 18 to 50 on the day of the gift.

A busy first week

• 6 October. Economy minister Roland Lescure said the government would “toiletter” (tidy up) the article so that heirs are not forced to sell the company to pay the tax.
• 8 October. The Assemblée nationale’s finance committee adopted a rewrite by the budget rapporteur, Philippe Juvin. According to Les Echos, as reported by Zoom Invest, it keeps the erasure at death, and taxes a gift only where the contributed shares were sold less than eight years after the contribution, in proportion to the proceeds not reinvested.
• 9 October. The committee rejected the whole revenue part of the bill, by 31 votes to 3. Under the Constitution, the plenary debate that opens on 13 October starts from the government’s original text. Every committee change, including the Juvin rewrite, must be tabled and voted again.

The deputies’ other target that week, a 2% yearly tax on portfolios inside family holdings, is explained in our post on France’s holding company tax.

A fair caveat

This is a bill, not law. The final text may soften the rule, change the start date or drop it, and the Senate has yet to vote. We have simplified a regime with many conditions, and real cases turn on the details.

Five lessons to take away

1. A deferral is not an exemption. Tax that waits can be called in when the rules change.
2. Watch the filing date, not only the vote. This bill reaches back to the day it was presented.
3. Committee votes are signals, not law. The plenary starts again from the government’s text.
4. Liquidity matters as much as the rate. A tax bill triggered by a gift of shares still has to be paid in cash.
5. Plan with a second scenario. Cost each transfer under both the current and the proposed rule.

Questions to bring to your advisors

Do we hold shares received in an apport-cession, and how large is the deferred gain? Were any gifts of holding shares signed on or after 1 October 2026? Would the five-year payment option or the 2027 cash-gift window help us? What happens if a founder dies while the law is still being debated? These are questions to bring to your lawyers and tax advisors, not advice.