A parent gives one of their children a sum of money to create or take over a business. Years later, when the estate is divided, the question arises: does that child bring back the sum received, or the value of what it allowed them to acquire? For a company that has prospered, the difference runs to tens or hundreds of thousands of euros. The reported decision of the First Civil Chamber of the Cour de cassation (the French supreme court for civil matters) of 1 July 2026 settles the point for a roofing business in Finistère: money invested in the creation of a company is brought back at value, that is, at the value of the shares.
The facts
A mother died on 5 April 2015, leaving two sons. A handwritten will dated 13 November 2014 recorded that she had given one of them, at the end of January 2008, “the sum of 15,000 euros to enable him to acquire his roofing company in Finistère” (translated from the French). The donee invested that sum, among other funds, in the creation and development of his company.
The court of first instance in Saint-Nazaire held on 9 January 2020 that the gift would be brought back at value. The RENNES Court of Appeal reversed on 31 January 2023: the rapport (the bringing back of lifetime gifts into the estate so that heirs are treated equally) was equal to the face amount of €15,000, because “investing gifted funds in the creation of a business is not an act of acquisition of an asset”. The donee’s brother appealed to the Cour de cassation.
The decision
The Cour de cassation quashed the judgment and, ruling on the merits without remittal, confirmed the first-instance decision (Cass. 1re civ., 1 July 2026, appeal no. 24-14.026, reported).
It started from article 860-1 of the French Civil Code: “the rapport of a sum of money is equal to its amount. However, if it was used to acquire an asset, the rapport is due at the value of that asset, under the conditions set out in article 860”. It then stated the rule: “the contribution of cash to finance the creation of a company in return for ownership of the shares issued constitutes an act of acquisition within the meaning of article 860-1 of the Civil Code, so that the rapport of the sum of money invested is due at value”.
Creating a company with the gifted money is therefore acquiring an asset, namely the shares issued in return for the contribution. By distinguishing the creation of a business from the purchase of an asset, the Court of Appeal had added a distinction the text does not contain.
What this changes for the valuation
The asset to value is the shares. Article 860 sets the method: the rapport is due “at the value of the gifted asset at the time of the partition, according to its condition at the time of the gift”. Applied to an invested sum, the expert values the company’s shares at the date of the partition, taking account of the company’s condition at the time of the contribution. If the shares were sold before the partition, the value at the time of the sale applies, and if another asset was substituted for them, the value of that new asset (article 860, second and third paragraphs).
The share financed by the gift. The decision notes that the €15,000 was invested “among other funds”. The logic of article 860-1 leads to bringing back only the fraction of the share value that corresponds to the gifted sum. In practice, the expert reconstructs the total contribution at creation, calculates the proportion financed by the gift, and applies that proportion to the value of the shares at the date of the partition.
Condition at the time of acquisition. This is the point that demands the most method. Fifteen years after its creation, a roofing company is worth what its manager’s work, later investments and the market have made of it. Article 860 requires reasoning from the asset’s condition at the time of acquisition: improvements attributable to the donee are not brought back, while changes attributable to the market and the economy are. For a business, the line runs between what stems from the initial contribution and what stems from the donee’s own industry. The valuation report must explain and quantify that line, item by item, rather than take the gross value of the shares.
Methods. For shares in an unlisted company, the valuation combines restated net asset value, earnings or productivity value and, where they exist, comparable share sales; the Charte de l’expertise en évaluation immobilière (the French property valuation charter) devotes a specific paragraph to businesses and company shares (6th edition, November 2025, Title II, § 8.5). For a craft business whose value rests largely on the person of its manager, the earnings value is adjusted for a normal remuneration of that manager’s work, failing which the report would confuse the value of the shares with the value of the donee.
What the expert takes from it
- Money given to create or take over a company is no longer a sum of money for the purposes of the rapport: it becomes shares, and is brought back at their value.
- The value retained is that of the shares at the date of the partition, according to the company’s condition at the time of the contribution, and only for the fraction financed by the gift.
- The donor can exclude this rule by a contrary stipulation in the deed of gift (article 860, last paragraph); a notarial deed providing for rapport at face value avoids the debate.
- The donee has every reason to keep the documents of the time: articles of association, paid-up capital, accounts of the first financial years. Without them, the company’s condition at the time of the contribution is hard to reconstruct.
- The same reasoning applies to money given to buy a house, a plot of land or a business: the rapport follows the asset.
Further reading
The Business and company shares page describes the assignment, its timescale and its fee. The guide Valuing SCI shares in a French inheritance or gift and the glossary entry rapport des donations complement this article. On the same theme: Inheritance: gifted land is valued as bare land at the date of the gift and SCI shares: the discounts accepted in a French inheritance. The decision is available on Légifrance.
What next
Was a gift of money used to create or take over a company?
I value the shares at the date of the partition, separating what comes from the gift from what comes from the donee's own work, in a report the notaire can attach to the draft partition.
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