Introduction

As spring 2025 settles in, it is appropriate to take a retrospective look at the year 2024, a pivotal period for the Dutreil mechanism, which, by allowing a partial exemption of 75% of the value of transferred shares, remains the cornerstone of any family business transmission strategy. Faced with a tax authority that remains an unavoidable heir with taxation that can reach 45% in direct line, practitioners have witnessed significant jurisprudential and administrative clarifications that deserve to be analyzed today with the rigor that this subject requires. The year 2024 was marked by major rulings from the Court of Cassation and the courts of appeal, as well as substantial doctrinal clarifications. These developments have sometimes secured family transmissions and sometimes reminded us of the limits of this favorable regime. Reflecting on these jurisprudential and administrative contributions is essential for practitioners who, at the beginning of 2025, advise their clients on implementing this complex yet indispensable mechanism.

I. Major clarifications regarding the scope of the Dutreil pact

The Commercial Chamber of the Court of Cassation, in its ruling of November 29, 2023, provided a clarification regarding the scope of activities eligible for the Dutreil mechanism. In this case, it involved a company engaged in a mixed activity, both industrial and asset management. The High Court specified that the assessment of the predominant nature of the eligible activity must be carried out using a global evaluation method, taking into account not only the assets recorded in the balance sheet but also qualitative criteria such as the number of employees assigned to each activity and the revenue generated.

This jurisprudential position, welcomed by doctrine, marks a notable evolution compared to the strictly asset-based method sometimes advocated by the tax administration. It thus paves the way for a more economic assessment of predominance, in line with the reality of family businesses that, over generations, have often diversified their activities.

Furthermore, the Administrative Court of Appeal of Versailles, in its ruling of March 12, 2024, clarified the contours of the notion of an active holding company. The Versailles court ruled that a holding company can be classified as active even if it does not exercise its management over all of its subsidiaries, as long as its management activity remains predominant. This pragmatic solution aligns with the jurisprudence of the Council of State while providing welcome flexibility for family groups where some subsidiaries may legitimately enjoy greater operational autonomy.

The question of the formalism of the collective commitment to conservation was at the heart of the ruling of the Commercial Chamber on January 24, 2024. In this case, the Court of Cassation firmly reiterated the importance of adhering to formal conditions, ruling that the collective commitment must be expressly mentioned in the succession declaration or the donation deed, under penalty of forfeiture of the favorable regime.

This decision illustrates the strict approach of the High Court regarding the formal conditions of the Dutreil pact. It invites practitioners to exercise heightened vigilance when drafting documents, reminding them that in tax matters, formalism is never trivial but often constitutes the guarantee of the effectiveness of the favorable regime.

This formal rigor finds resonance in the recent update of the administrative doctrine, which specifies the declarative modalities required for the validity of the Dutreil pact. The administration now requires that the collective commitment expressly mentions the signatories' intention to place themselves under the regime of Article 787 B of the CGI, as well as the percentage of financial rights and voting rights represented by the committed shares.

II. Clarifications regarding the execution of conservation commitments

The Court of Cassation, in its aforementioned ruling of January 2024, also provided important clarifications regarding the consequences of the death of a signatory of the collective commitment before the transfer of shares. The High Court ruled that the death of a signatory does not, by itself, lead to the nullification of the collective commitment, as long as the minimum holding thresholds provided by law are respected.

This solution, which prioritizes the economic purpose of the mechanism over excessive formalism, secures Dutreil pacts weakened by events beyond the parties' control. It is part of a jurisprudential trend favorable to the sustainability of collective commitments, a trend already perceptible in previous jurisprudence related to restructuring operations during the commitment period.

The administrative doctrine, in its update of June 12, 2024, incorporated this jurisprudence while specifying that the burden of proof for compliance with the minimum holding thresholds after the death of a signatory lies with the taxpayers. This position, which reflects the pragmatic yet rigorous approach of the administration, underscores the crucial importance of documenting Dutreil pacts throughout their execution.

The execution of the individual conservation commitment, which extends the collective commitment, has also been the subject of important clarifications. The Court of Appeal of Versailles, in its ruling of March 12, 2024, ruled that a partial transfer of shares subject to an individual commitment results in the total forfeiture of the favorable