France’s debate over how to repair its public finances is turning towards the taxation of major inheritances. Oxfam France is calling for a €1 million cap on the Dutreil pact exemption, arguing that reforming the scheme could raise more than €3 billion a year while protecting most business transfers.
The proposal arrives as preparations begin for France’s 2027 budget and as pressure grows for the government to identify savings and new revenue. The measure is not government policy: it is an advocacy proposal from Oxfam, and any change would require legislative action through France’s budget process.
What is the Dutreil pact?
Introduced in 2003, the Dutreil pact was designed to make it easier for family-owned businesses to pass from one generation to the next. It provides a 75% exemption from gift and inheritance tax on qualifying business assets.
The policy’s original purpose was to prevent heirs from having to sell a company, or parts of it, simply to meet an inheritance-tax bill. In return, beneficiaries must meet conditions including minimum holding periods and requirements linked to the continued operation of the business.
France’s 2026 finance law already tightened aspects of the scheme, including the holding period and the treatment of some assets that are not directly connected to business activity. Oxfam argues that further reform is needed because the largest estates receive the greatest benefit.
Oxfam’s proposed inheritance tax reform
Oxfam’s central recommendation is to limit the Dutreil exemption to €1 million per beneficiary. According to the organisation, around 90% of existing beneficiaries would remain outside the proposed cap, while the state could collect more than €3 billion annually.
The organisation describes the largest estates as “super-inheritances”. Its report focuses on the top 0.1% of heirs, whose inheritances average about €13 million and face an effective tax rate of roughly 10%, despite the theoretical marginal rate reaching 45% for the biggest transfers.
Oxfam’s argument is that the current system creates a significant gap between the headline tax rate and the amount actually paid by the wealthiest heirs. It says the difference is particularly important at a time when France is seeking additional revenue without placing the entire burden on ordinary households.
Key figures in the proposal
- The Dutreil pact provides a 75% exemption for qualifying business transfers.
- Oxfam proposes a €1 million cap per beneficiary.
- The organisation estimates that the reform could raise more than €3 billion each year.
- It projects a potential public-finance shortfall of more than €111 billion over 30 years if transfers of billionaire wealth continue under the current system.
- Oxfam says the 110 most advantaged beneficiaries saved an average of €30 million in tax in 2024.
Why France’s budget debate matters
The proposal comes against a difficult fiscal backdrop. Figures cited in the report indicate that France’s public deficit is expected to rise from 5.1% of gross domestic product in 2025 to 5.4% in 2026, while public debt is projected to increase from 115.7% to 119.3% of GDP.
France’s Directorate General of the Treasury has indicated that substantial fiscal efforts will be needed in the years ahead. That context has placed tax expenditures, exemptions and other forms of foregone revenue under closer scrutiny.
Oxfam’s estimate of €111 billion is a projection, not a guaranteed amount that would automatically enter the treasury if the Dutreil pact were abolished. The figure is intended to illustrate the possible long-term value of reforming how large business inheritances are taxed.
The political and economic dilemma
Supporters of the Dutreil pact argue that it serves a practical economic purpose. Family firms can be vulnerable during succession, and a large tax bill may force heirs to sell shares or business assets. That could affect ownership, investment and employment.
Oxfam’s position is that the scheme can be preserved while limiting its value for the very largest fortunes. Its proposed cap is therefore aimed at concentrating reform on major inheritances rather than removing relief from ordinary family business transfers.
The issue is politically sensitive because it combines France’s search for budget revenue with longstanding arguments about wealth inequality. Any government decision would need to balance the expected tax income against the risk that changes could make business succession more difficult.
What happens next?
The proposal could feature in discussions surrounding France’s draft finance bill for 2027. However, the source material indicates that Prime Minister Sébastien Lecornu had said the government would not alter the Dutreil pact in its initial budget options.
That means Oxfam’s recommendation is currently part of the public debate rather than an adopted measure. The government would need to introduce a provision, and France’s Parliament would need to consider it as part of the legislative process.
The main questions for lawmakers are likely to include:
- Whether a €1 million cap should apply to each beneficiary or be calculated differently.
- Which business assets and transfers would qualify.
- Whether family-owned companies would receive transitional arrangements.
- How reform could raise revenue without encouraging forced sales.
- Whether the measure should form part of the 2027 budget or be addressed separately.
Conclusion
Oxfam’s call for a €1 million limit on the Dutreil inheritance tax exemption has put large family-business transfers at the centre of France’s budget debate. The proposal is not yet a new tax rule, but it highlights the government’s wider choice between protecting business succession and asking the largest inheritances to contribute more. The next decisive step will be whether the issue appears in France’s 2027 finance legislation.
