Donation-partage

The donation-partage is a French legal instrument (Articles 1075 et seq. of the Civil Code) that allows a donor to distribute all or part of their estate among their heirs while they are still alive, with the allotments being final and not subject to hotchpot (rapport à succession) at the time of the donor's death. Unlike a simple gift, the distribution is definitive and fixed at the date of the donation-partage, protecting beneficiaries from later claims by co-heirs.

The main tax advantage of the donation-partage lies in the valuation freeze: the allotted assets are valued at the date of the donation for tax purposes, not at the date of death. In a rising-value context, this mechanism allows the transfer of future appreciation free of inheritance tax. Combined with the Pacte Dutreil for business assets, the donation-partage is the cornerstone of French business transfer planning for family companies.

French law also recognizes the "donation-partage transgénérationnelle" (Article 1078-4 CC), which allows grandparents to allocate directly to grandchildren, with the consent of the intermediate generation. This is particularly useful when the children have already received earlier gifts and the grandchildren represent the natural succession to the business.

In a Franco-Swiss context, the donation-partage produces effects only within the French legal and tax framework. Swiss law has no equivalent institution, but the combination of cantonal inheritance tax exemption between parents and children with a properly structured shareholder agreement achieves similar outcomes for Swiss family businesses. Valuation of the allotted assets — particularly business shares — must be performed by an independent expert to satisfy French notarial and tax requirements.

At Hectelion, we value business assets for donation-partage transactions and coordinate with French notaries in our valuation and structuring mandates.