In wealth management, split ownership is mainly used to optimise the transfer of wealth, reduce certain tax costs, or organise the holding of real estate and financial assets.

Ownership rights are then divided into two components:

• bare ownership;
• usufruct.

The bare owner holds the asset in legal terms, while the usufructuary retains the right to use the asset or receive the income from it.

Split ownership can apply to a property, units in a SCPI, a securities portfolio, or certain wealth-planning contracts.

What is the difference between usufruct and bare ownership?

Usufruct is the right to use an asset and receive the income from it.

For example, in the case of a rental apartment, the usufructuary can:

• live in the property;
• rent it out;
• collect the rent.

The bare owner, for their part, owns the asset but cannot enjoy it immediately as long as the usufruct exists.

At the end of the split ownership—generally on the usufructuary’s death in a family context—the bare owner automatically regains full ownership, with no additional costs in most cases.

This mechanism is widely used in wealth management to prepare a gradual transfer.

Why use split ownership in wealth management?

Split ownership is a particularly powerful wealth-planning tool.

It can be used to:

• prepare an estate;
• transfer wealth at a lower tax cost;
• protect a surviving spouse;
• optimise real estate wealth tax (IFI);
• structure a real estate strategy;
• reduce certain gift taxes;
• plan ahead for the transfer of a family business.

As part of a wealth strategy, split ownership often makes it possible to transfer wealth gradually while retaining certain rights or income.

That is why it is frequently used by families with substantial real estate assets.

How does a split-ownership gift work?

As part of a split-ownership gift, parents can transfer the bare ownership of an asset to their children while retaining the usufruct.

This means they generally continue to:

• use the asset;
• receive the income;
• retain a certain level of control over the assets.

On the usufructuaries’ death, the children automatically regain full ownership.

The main benefit is that gift taxes are calculated only on the value of the bare ownership, not on full ownership.

This value depends on the usufructuary’s age, according to a tax scale defined by the authorities.

Is split ownership tax-efficient?

Yes, split ownership offers several tax benefits in wealth management.

It can notably allow for:

• reduce gift taxes;
• optimise inheritance planning;
• limit the taxable base for IFI in certain cases;
• plan ahead for an estate;
• improve overall wealth-planning efficiency.

However, split ownership must be used with caution and integrated into a coherent wealth strategy.

The civil, tax and family implications must be carefully analysed before any transaction.

Which assets can be split?

Split ownership can apply to many types of wealth assets:

• real estate;
• SCPI;
• securities portfolio;
• shares;
• securities accounts;
• capitalisation contracts;
• units in civil companies.

In wealth planning, temporary split ownership is also used in certain real estate investment strategies or family business transfer strategies.

Why get support for split ownership?

Split ownership is a technical transaction that can have significant tax, legal and inheritance consequences.

A wealth management adviser, a notary or a tax lawyer can help to:

• choose the right strategy;
• avoid certain mistakes;
• optimize taxation;
• secure the transfer;
• adapt the structure to the family situation.

In many cases, split ownership fits into an overall wealth strategy combining real estate, wealth transfer and inheritance optimisation.

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