12. Gift Tax in France

1. 12.1. Gift Tax in France
   12.2. Gift Tax Allowances
   12.3. Rates of French Gift Tax
   12.4. Gifts of Real Estate in France
   12.5. Gifts & French Inheritance Laws
   12.6. Procedures for Making Gifts

12.5. Gifts and Inheritance Laws in France

There are two important points to bear in mind concerning the relationship between gifts and French inheritance laws.

This is because children are protected heirs, with entrenched inheritance rights.

Thus, for example, if you are married, then the maximum amount that you can gift to your spouse will depend on the number of your children, as follows:

• One child – half your estate
• Two children – third of your estate
• Three or more children – quarter of your estate

The ten year period must expire to be clear of any form of taxation.

Thus, the older you are the more you need to consider whether it would make sense, if it is possible, to make the gift in one single payment, rather than a series of payments of, say, €25,000 each year.

The longer the period over which the gift is granted the greater the risk that it will be caught by the inheritance rules.

Nevertheless, provided the ten years has expired, the allowances are cumulative with inheritance tax allowances. The child allowances for inheritance tax happen to be the same as those for gift tax.

Accordingly, each child benefits from an inheritance tax allowance of €159,325 on the death of one of the parents, in addition to any expired sums which may have been granted by way of gift.

So a gift to a child of €159,325 can be added to an inheritance tax allowance of the same amount. Total allowance free of tax is €318,650.