Démembrement de propriété (split ownership or dismemberment of title) is the division of full ownership (pleine propriété) into two separate rights: usufruct (usufruit), the right to use the asset and collect its income, and bare ownership (nue-propriété), the right to the asset's capital without current enjoyment. Split ownership is widely used in French and Franco-Swiss estate and tax planning to reduce inheritance tax by transferring bare ownership at a discounted value while retaining economic enjoyment through usufruct.

The bare ownership value depends on the usufructuary's age: the older the usufructuary, the lower the usufruct value and the higher the bare ownership value. French tax law provides a fixed scale (Article 669 CGI) ranging from 90% usufruct / 10% bare ownership for ages under 21, to 10% usufruct / 90% bare ownership for ages 81 and above. For a 60-year-old donor, the usufruct is valued at 40% and bare ownership at 60%.

In a business transfer context, a parent retaining the usufruct of their company shares continues to vote in the general assembly and collect dividends, while the bare ownership — transferred to children with reduced gift tax — carries the right to the asset's capital value on the usufruct's extinction (typically at death). This structure is powerful but must be carefully documented: the shareholder agreement and articles must address voting rights in splits, dividend policy, and dissolution scenarios.

In Switzerland, similar arrangements exist under Articles 745 et seq. of the Civil Code (CC), though without the same standardized tax scale. The Swiss tax treatment of split ownership is determined on a case-by-case basis by the cantonal tax authority, making independent valuation and tax ruling essential in Franco-Swiss structures.

At Hectelion, we value split ownership structures for tax and transactional purposes in our valuation and estate structuring mandates.