12. Gift Tax in France

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

12.2. French Gift Tax Allowances

In order to assist with inheritance planning French law grants quite generous tax allowances for gifts made between family members.

The limits on the amount that can be gifted free of tax depends on the relationship between the parties and, in some cases, on the age of the donor.

The thresholds for 2011 are as follows:

In addition to these allowances, it is also possible to make a one-off gift in cash of up to €31,865 to each child, grandchild/great grandchild or, in the absence of these descendants, to a neice or nephew, free of gifts tax. This separate allowance is conditional on the donor being less than 80 years old (wef 1 Jan 2010) and the beneficiary over 18 years old. The gift of the cash must also be declared to the tax authority.

A registered disabled person, whatever their relationship to the deceased, receives an allowance of €159,325 by reason of their disability, to which they can add any other allowance to which they may ordinarily be entitled by virtue of blood link. Thus, a disabled child is entitled to an allowance before gifts tax of €159,325, as well as a further €159,325 from each of their parents.

These allowances are cumulative so that, for instance, a child may receive gifts from both parents and grandparents, without one affecting the exemption limits of the other.

If you are gifting real estate then the situation can be made easier by gifting to your children the 'reversionary interest' in the property, whilst you retain the 'life use' of the property. We say more about this in later pages of this guide.