A mother sells her son, in 1997 and 2001, shares of a civil company owning buildings. The first sale is paid with a bank loan secured by a mortgage on property rights the mother gives the son a few weeks later; the second, “paid in cash” according to the deed, is in fact settled two months later from a joint account funded by the mother. After her death the daughter argues that these sales are disguised gifts and obtains their reintegration into the estate for the computation of the reserved portion, with the brother stripped of his rights over those shares. On 10 June 2026 the Cour de cassation (the French supreme court for civil matters) quashed that ruling: giving an asset that later secures the loan does not impoverish the mother a second time, and it is for the party alleging a gift to prove that the funds financed the shares. It also recalls that a claim for rapport (bringing a gift back into the estate) can only be made in judicial partition proceedings. For the valuer, the ruling brings the question back where it belongs: what were the shares worth on the day of the sale, and was the price paid a real price.
The facts
The mother dies on 9 February 2015, leaving a daughter and a son, appointed universal legatee by a 2013 will. The daughter sues her brother for liquidation of the estate, reduction of the legacy, reintegration of assets he allegedly diverted, rapport and concealment. Three sales of shares of a civil company are at issue. On 29 November 1997 the mother sells thirty shares for 1,920,000 francs, a price paid through a bank loan secured by a mortgage on property rights that the mother gives the son on 22 December 1997. On 21 February 2001 she sells five shares for 375,000 francs, a price stated as paid in cash outside the notary’s accounts, but actually settled two months later by a cheque drawn on the son’s account, funded by a transfer of 92,000 € from the joint account of mother and son.
The Versailles Court of Appeal, on 21 November 2023, holds that the sales were fraudulently arranged to divert the shares from the estate, orders their reintegration for the computation of the reserved portion, strips the son of all rights over those shares and their income since the death, orders the rapport of several earlier gifts, and appoints a court expert.
The decision
The first civil chamber quashed on three points (Cass. 1re civ., 10 June 2026, no. 24-10.363).
On the 1997 sale, under articles 893 and 894 of the Civil Code: “a gift presupposes an impoverishment of the disposer with the intention of benefiting the recipient”. By holding that the mother had “indirectly impoverished herself” because the son had obtained the loan only thanks to the gift of the property rights given as security, the Court of Appeal ruled “on grounds unfit to characterise the impoverishment” resulting from the sale itself.
On the 2001 sale, under articles 894 and 1353: “it is for the party who alleges the existence of a gift to prove it”. By inferring a gift from the son’s failure to explain the 92,000 € transfer, the Court of Appeal reversed the burden of proof; it was for the sister “to prove that the transfer made on 21 April 2001 had served to finance the acquisition of the disputed shares”.
On rapport, under articles 840 and 843: “claims for the rapport of a gift allegedly received by an heir may be made only in judicial partition proceedings”; yet the Court of Appeal had rejected judicial partition, for want of joint ownership, the universal legacy being reducible in value only. The appointment of the court expert, not challenged, stands. Remittal to the Paris Court of Appeal.
What this changes for valuation
Proof of a disguised gift runs through value. A share sale disguises a gift when the price is absent, fictitious or derisory against the value of the shares. That is a debate about figures: what were thirty shares of a civil company worth in November 1997, five shares in February 2001, given the buildings held, the company’s loans and the members’ current accounts. The Court of Appeal had sidestepped that debate by reasoning on financing; the Cour de cassation brings it back to impoverishment, which is measured by the gap between price and value, or by proof that the price was paid with the seller’s money.
Valuing shares at an old date. The valuer rebuilds the company’s net assets at the date of each sale: market value of the buildings with references of the time, bank liabilities, current accounts, then the fraction held and the discounts specific to shares of a family civil company. The site’s guide to valuing SCI shares describes the method; applied to 1997 and 2001, it requires the accounts and deeds of the time, which the court expert appointed in the case will have to gather.
Financing is not price. A real price paid with a loan is a price, even if the loan was secured by a gifted asset: the gift of the asset is brought back into the estate for itself, and the sale remains a sale. A price paid with the seller’s money, on the other hand, reveals a gift, but a gift of the sum, not of the shares, unless the price itself was derisory. The distinction matters for rapport: a gifted sum used to acquire an asset is brought back according to the value of that asset, as the article on a gift of money invested in a company recalls.
Two angles on the same transaction. The tax administration treats an undervalued sale between parent and child as a disguised gift to collect duties, with the surcharge that goes with it, as explained in the article on a tax reassessment for a disguised gift. Between heirs, the same classification serves to bring the asset back into the estate for the reserved portion. In both cases the valuation of the asset on the day of the deed decides, and a valuation made at the time of the sale, kept on file, cuts the debate short twenty years later.
No joint ownership, no rapport. A universal legatee owes the reserved heirs a reduction indemnity, computed in value; there is no joint ownership between them and therefore no partition, which closes the route of rapport. The reserved portion is nonetheless computed by notionally adding the gifts back, at their value at death according to their condition at the date of the gift: again a valuation at two dates, which the court expert will supply.
What the valuer takes from it
- A share sale is a disguised gift only if the price is absent, fictitious or derisory against the value of the shares on the day of the sale; the burden of proof lies on the party alleging it.
- Giving an asset that secures the loan financing the price does not impoverish the seller a second time.
- The valuer values the shares at the date of each sale, with the net assets and discounts of the time.
- A price paid with the seller’s money reveals a gift of the sum, brought back according to the asset it served to acquire.
- Rapport requires partition proceedings; against a universal legatee, the reserved portion is computed by notional addition and a reduction indemnity.
Further reading
The Business and company shares page describes the assignment, its timescale and its fee. The guide Valuing SCI shares in an inheritance or a gift and the glossary entries parts de SCI, réserve héréditaire and réduction des libéralités complement this article. On the same theme: Usufruct of SCI shares: discount, life annuity and uncertainty and Inheritance: gifted land valued as bare land. The decision is available on Légifrance.
What next
Shares sold to a child twenty years ago, and a sibling now talking of a disguised gift?
I establish the value of the shares at the date of the sale, with the accounts and the properties of the time, so that the debate on the price, and therefore on impoverishment, rests on a figure.
Free quote, by email or by phone. No commitment before the quote is accepted. Fees are never linked to the value of the property (Charte de l’expertise, Title I, §2.1).
