Legal background: Gifts of shares between non resident donor and donees are subject to French gift taxes only when they concern shares in French company.
Scheme in place: After relocation outside France, a taxpayer “delocalizes” the shares that are to be gifted by transferring them to several non French interposed companies, without real economic substance. The shares gifted being non French, the gift exits the scope of French taxation.
Outcome of audit: The gift after transfer of French shares to non French interposed companies is viewed as aiming at transferring the shares of the French company without paying French gift taxes. The FTA challenges the restructuring as being artificial on the grounds of the abuse of law procedure and imposes French gift taxes.