The Conseil d’État restricts the scope of the “Quemener” doctrine

According to the Conseil d'État's “Quemener” doctrine (CE 16 février 2000 n° 133296), the calculation of any capital-gains made by the shareholder upon the sale of their shares in a partnership is subject to adjustment of the shares' cost price in order to avoid double taxation or double deduction issues – a position subsequently confirmed by the French tax authorities for non-trading real estate partnerships (SCI) undergoing dissolution by way of merger. In his article “Le Conseil d’État limite l’application de la jurisprudence ‘Quemener’” (Expression Acheter-Louer.Fr, n° 52 septembre/octobre 2016), Réginald Legenre reports on a new ruling by France's highest administrative court (CE 6 juillet 2016 n° 377904 et 377906 Lupa) which clarifies that the doctrine can only be applied to avoid a double taxation of the merging partnership.


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