MIL-OSI Translation: In the event of a collective commitment deemed acquired, only one of the heirs, donees or legatees may exercise the management function of the company.

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MIL OSI Translation. Government of the Republic of France statements from French to English –

Source: Republic of France in FrenchThe French Republic issued the following statement:

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As a reminder, the Dutreil Pact is a system giving the right to partial exemption from gift taxes, up to 75% of the value of the securities transferred.

In the case presented to the Court, a taxpayer had made a donation of part of the shares of her company to her children. The tax administration ruled that this donation could not benefit from the partial exemption from transfer taxes (Pacte Dutreil) because only the donor had exercised one of the management functions during the 3 years following the donation. The taxpayer took legal action and asked to benefit from the Dutreil Pact.

The court of appeal rejects this request on the grounds that the collective conservation commitment signed excludes the donor from exercising the management function of the company. Indeed, only the parties having signed with the donor can exercise this function. The applicant appeals to the Court of Cassation.

The Court of Cassation rejects the appeal, for it, in the event of a collective commitment deemed acquired, the Dutreil Pact applies when, during the 3 years following the date of transmission, one of the heirs, donees or legatees exercises in the company a management function. However, in this case, only the donor exercised this function.

EDITOR’S NOTE: This article is a translation. Apologies should the grammar and/or sentence structure not be perfect.

MIL Translation OSI