Bare ownership (nue-propriété) is the right to an asset's capital without current enjoyment — the complement of usufruct in a split ownership (démembrement) structure. The bare owner holds the underlying value of the asset but cannot use it or collect its income while the usufruct exists. Upon the usufruct's extinction (typically at the usufructuary's death), the bare owner automatically consolidates full ownership with no additional tax in France.

Bare ownership is particularly valuable as a financial investment: it is acquired at a discount to full value (the discount reflecting the deferred enjoyment), and the bare owner benefits from the full capital appreciation over the usufruct period with no income tax on the discount gain at reconsolidation. For a 60-year-old donor, bare ownership is priced at 60% of full value — the 40% discount representing the value of the foregone usufruct, which is not subject to tax at consolidation.

In the context of private equity and M&A transactions, bare ownership of company shares can create complex situations in a LBO or during a due diligence: the acquirer must determine who holds voting rights, who receives dividends, and how the bare ownership consolidation will occur at the usufructuary's death — all of which affect the pricing and structuring of the deal.

At Hectelion, we value bare ownership interests for tax, estate planning and transactional purposes in our valuation mandates.