Relaxation on Tax Free Gifts to Grand-Children
Tuesday 15 December 2009
The age limit on tax free gifts to grandchildren has been raised by the French government.
The new law raises from 65 years to 80 years the age limit for a one off tax free cash gift to grand-children, provided the recipient is at least 18 years of age.
The maximum sum that can be gifted in this way is €31,272 in cash, from each grand-parent to each grand-child.
On this basis, if you were grand-parents with three grand-children then, using this concession, you could make a cash gift to them, free of French gifts tax, totalling €187,632.
There is no need for the sum to be gifted in a single donation; it can be made in a series of payments over time.
In addition, grand-parents can also make a separate gift of €31,272, in any form, whether in cash, property, shares etc.
There are no minimum or maximum age limits on this second type of gift, which can be made every six years. This is a different type of gift tax allowance.
In total, therefore, each grand-parent is able to gift to each of their grand-children, €62,544 free of French gifts tax.
Above this amount a gifts tax is payable at a rate of between 5% and 40% depending on the value of the gift.
The gifts are not taken into consideration for the purposes of French inheritance tax, provided they were given at least six years prior to the death of the donor.
You are required to declare the gift to the tax authority, and to save later disputes between family members you may wish to consider assistance from a notaire to authenticate the gift, although fees will be payable. They will amount to 0.59% of the sum gifted, plus €236.
You can read more in our guide to Gifts Tax in France
This article was featured in our Newsletter dated 15/12/2009