Equalisation payment (soulte)

An equalisation payment (soulte) is a cash payment made in the context of a transaction to compensate for a difference in value between assets exchanged or allotted. In estate law, it arises when a donation-partage or succession allots unequal assets to heirs: the heir receiving the higher-value allotment pays a soulte to the others to equalise the distribution. In corporate law, it arises in mergers, demergers and share exchanges where the shares exchanged are not of exactly equal value.

In a merger context (fusión or scission), the soulte cannot exceed 10% of the nominal value of the shares allotted in France (Article L. 236-1 of the Commercial Code), otherwise the transaction loses its merger status and is treated as a taxable disposal. The same constraint applies in Switzerland under the Swiss Merger Act (LFus). Exceeding this threshold triggers immediate taxation of the capital gain corresponding to the soulte received.

In a Franco-Swiss succession context, the soulte is a particularly common mechanism when one heir (typically the one taking over the business) receives the company shares and compensates siblings in cash. The value of the company — and hence the amount of the soulte — must be determined by an independent valuation to avoid disputes between heirs. Overestimating the company value increases the soulte burden on the business successor; underestimating it may trigger disputes and tax adjustments.

At Hectelion, we produce independent valuations to determine fair soulte amounts in succession, donation-partage and restructuring transactions in our valuation mandates.