12. Gifts Tax in France

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

12.2. Gift Tax Allowances

In order to assist with inheritance planning the 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 2009 are as follows:

In addition to these allowances, it is also possible to make a cash donation of up to €31,272 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 65 years old, 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 €156,359 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 €156,359, as well as a further €156,359 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. You can read more about this in on the next page.