PARIS — Christmas came early for the family of Bernard Arnault.
The French luxury magnate on Dec. 13 donated more than 366 million euros’ worth of shares in his luxury holdings LVMH Moët Hennessy Louis Vuitton and Christian Dior SE, according to filings made with France’s stock market regulator AMF, and it appears his children were the main beneficiaries.
Delphine Arnault, executive vice president of Louis Vuitton, received 189,020 LVMH shares and 88,222 Christian Dior shares, worth a combined 73.2 million euros, according to the documents filed on Dec. 27.
Antoine Arnault, chief executive officer of Berluti, received 189,020 LVMH shares worth 46.6 million euros, according to the filings available on AMF’s web site. Both are directors at LVMH, and Delphine Arnault is also a director at Christian Dior, which explains why they had to declare the donations they received.
Delphine and Antoine are the children of Bernard Arnault’s marriage to his first wife, Anne Dewavrin. He also has three sons with his second wife, the Canadian pianist Hélène Mercier, including Alexandre Arnault, co-ceo of German luggage maker Rimowa.
Benoît Boussemart, an author who specializes in investigating France’s wealthiest families, initially reported in a blog post that each of the children received 73.2 million euros. Officials at LVMH declined to comment on the report.
Charles de Crevoisier, a lawyer whose specialties include helping family-run businesses optimize the transfer of assets, said this type of donation was designed to take advantage of tax breaks.
“The idea is to anticipate a handover which would have occurred anyway after his death, and I imagine from a fiscal point of view, it is also aimed at taking advantage of fiscal measures which are currently relatively favorable,” he said.
De Crevoisier, who does not work for Arnault, said he likely took advantage of France’s Dutreil scheme, which allows three-quarters of the value of a family business to be transferred without any liability for transfer tax.
“I don’t know if the donation was indeed made under this scheme, but I imagine it is the case. It’s a favorable system because it allows you to benefit from a number of different rebates, thereby greatly reducing donation taxes,” he said.
“This scheme has been in place for several years, so I don’t think there are any particular factors that prompted this donation, except perhaps for age,” he added. Arnault is 68.
“He probably was able to benefit from an additional rebate, because for people under 70, under the Dutreil scheme for transferring businesses, donation taxes can be reduced by half. This is no doubt one of the compelling reasons why this is happening now,” the lawyer said.
Arnault, France’s wealthiest man, landed in hot water in 2012 after applying for Belgian citizenship in a move that was widely interpreted as an attempt to escape France’s high taxes.
Left-leaning French daily Libération ran a photo of Arnault on its cover under the headline “Casse-toi riche con!” — whose most polite translation is “Get Lost Rich Idiot!” At the time, the businessman claimed he was seeking to protect his Belgian interests and LVMH’s in the case of his death.
Stating that he had planned to remain a fiscal resident of France all along, Arnault subsequently withdrew his citizenship application, characterizing his decision as “a gesture of my attachment to France and my faith in its future.”
He noted that LVMH companies pay annual French taxes totaling close to 1 billion euros, even though the group generates 90 percent of its revenues outside the country. “Concerning myself, I won’t tell you how much how much I pay personally in taxes, but believe me, it’s a lot,” he said.
Arnault acknowledged at the time that his shares in LVMH — which account for the bulk of his fortune — have been transferred to a Belgian foundation, but that it has no impact on the taxes the group must pay in France, nor on inheritance taxes that would come due when the time comes.
A Brussels court nonetheless opened an inquiry into the luxury titan for “potentially falsely claiming Belgian residence” but shelved the case in 2017 after Arnault agreed to pay an undisclosed “transaction” to end proceedings, without admitting guilt in the case.