French €5.5 Billion Inheritance Tax Break Slammed as Costly (2)

A French tax break for company owners bequeathing assets to their children needs an urgent overhaul after costing the government more than €5.5 billion ($6.4 billion) last year, according to the state auditor.

The so-called Dutreil regime, which offers beneficiaries a significant shelter from the country’s inheritance taxes, is overly generous and costly, the Cour des Comptes said in a report published Tuesday. It concluded that the system fails to increase investment and hiring, and doesn’t prevent family-controlled companies from being sold over the longer term.

The report comes as Prime Minister Sebastien Lecornu, who heads a weak minority ...