Usufruit is a real right that allows a person to enjoy an asset belonging to someone else and receive its income, without being its full owner. It is one of the two components of the dismemberment of ownership, the other being bare ownership.

Dismemberment is a legal technique widely used in wealth management, particularly in the context of inheritances, gifts, property investment or certain tax optimisation strategies. It makes it possible to allocate the rights attached to an asset between several people according to family, wealth or financial objectives.

Usufruit can apply to many types of assets: real estate, a securities portfolio, company shares, a capitalisation contract, or certain movable assets.

What is the definition of usufruit?

Usufruit is defined by the Civil Code as the right to enjoy things owned by another, provided that their substance is preserved.

In practical terms, the usufructuary can use the asset and receive its income, while the bare owner retains ownership of the asset without being able to freely dispose of it for the duration of the usufruit.

What are the three attributes of ownership?

To understand usufruit, you need to go back to the concept of full ownership.

Full ownership is made up of three rights:

Usus

This is the right to use the asset.

Fructus

This corresponds to the right to receive the income or fruits from it.

Abusus

This refers to the right to dispose of the asset, in particular by selling it or giving it away.

In a dismemberment of ownership, the usufructuary holds the usus and the fructus, while the bare owner retains the abusus.

What are the usufructuary’s rights?

The usufructuary has significant rights over the asset concerned.

The right to use the asset

When it is a home, the usufructuary may occupy it as a main or secondary residence.

They do not need to ask the bare owner for permission to live there.

The right to receive income

The usufructuary can rent out the asset and receive the rent.

In the case of a securities portfolio, they can receive dividends.

For certain company shares, they can also receive distributed income.

The right to enter into certain management acts

The usufructuary may carry out the acts necessary for the normal use of the asset and its day-to-day maintenance.

What are the usufructuary’s obligations?

The rights granted to the usufructuary also come with certain obligations.

Preserve the asset

The usufructuary must use the asset as a prudent person and ensure it is preserved.

They may not deliberately damage it or change its purpose without agreement.

Take on day-to-day costs

For a property asset, the usufructuary generally bears:

• day-to-day maintenance expenses;
• tenant charges;
• property tax;
• certain wear-and-tear repairs.

Respect the bare owner’s rights

The usufructuary cannot sell the full ownership of the asset on their own.

Certain major decisions require the bare owner’s agreement.

What are the bare owner’s rights?

The bare owner retains an essential part of the rights attached to the asset.

They remain the owner

Even if they cannot freely use the asset during the dismemberment, they remain its legal owner.

They automatically recover full ownership

When the usufruit ends, the bare owner regains full ownership automatically, with no additional costs and no specific taxation in most situations.

This automatic reunification is one of the main advantages of dismemberment.

They take part in major decisions

The sale of the asset or certain exceptional transactions generally require their agreement.

How is a usufruit created?

Usufruit can arise in several situations.

Following an inheritance

When a married person dies, the surviving spouse frequently receives the usufruit of part or all of the estate.

The children then become bare owners.

As part of a gift

Parents can transfer the bare ownership of an asset to their children while retaining the usufruit.

This technique is particularly used to plan ahead for wealth transfer.

By agreement

Usufruit can also be created voluntarily as part of a specific wealth-planning transaction.

How long does a usufruit last?

The duration depends on the nature of the usufruit.

Life usufruit

It ends on the death of the usufructuary.

This is the most common form in wealth planning.

Temporary usufruit

It is created for a fixed period determined in advance.

This period is often between five and twenty years depending on the objectives pursued.

How is the value of usufruit calculated?

The tax authorities publish a scale used to assess the value of usufruit and bare ownership.

The case of life usufruit

The value of the usufruit depends on the usufructuary’s age.

The younger the usufructuary, the higher the value of their usufruit, since their statistical life expectancy is longer.

Conversely, the value of bare ownership increases with the usufructuary’s age.

The case of temporary usufruit

For temporary usufruits, the authorities generally use a value equal to 23% of full ownership for each ten-year period.

What taxation applies to usufruit?

The tax treatment varies depending on the type of asset concerned.

Income tax

The usufructuary generally declares the income generated by the asset.

They are therefore taxed on the rent, dividends or other income they receive.

Real estate wealth tax (IFI)

When a property asset is split, it is generally the usufructuary who declares the value of the asset for IFI.

Exceptions exist in certain inheritance situations.

Gifts and inheritance

Dismemberment is a particularly widely used wealth-transfer tool because it allows bare ownership to be transferred while retaining the use of the asset or its income.

Why use usufruit in a wealth strategy?

The dismemberment of ownership offers several advantages.

Prepare the transfer

Gifting bare ownership makes it possible to gradually transfer your wealth while maintaining a comfortable standard of living.

Reduce certain transfer duties

The taxable base is calculated only on the value of the bare ownership transferred.

Keep the income

The donor continues to receive the asset’s income despite the early transfer.

Optimise certain investments

Temporary dismemberment is sometimes used as part of specific property or financial investments.

What is the difference between usufruit and bare ownership?

These two concepts are inseparable.

Usufruit

The usufructuary uses the asset and receives its income.

Bare ownership

The bare owner holds the asset but can neither use it freely nor receive its income for the duration of the dismemberment.

When the usufruit ends, the two rights are automatically reunited to re-form full ownership.

Key takeaways about usufruit

Usufruit is a central legal mechanism in wealth management. It allows a person to use an asset or receive its income while leaving legal ownership to a bare owner. This separation of rights forms the basis of the dismemberment of ownership, widely used in wealth transfer, inheritance and wealth optimisation strategies.

Thanks to its flexibility, usufruit makes it possible to reconcile several objectives: preparing the transfer of wealth, keeping income, protecting a surviving spouse or optimising certain investments. However, using it requires a good understanding of each party’s rights and obligations, as well as the associated tax consequences.

Before setting up a dismemberment or transfer arrangement, it is recommended to consult a professional listed in the Experts du Patrimoine directory in order to assess the solutions best suited to your family, wealth and tax situation.