French Gift Tax and How to Gift Assets in France

How gifts are taxed in France

A lifetime gift in France is taxed. French law treats a gift (donation) as a transfer for no consideration and charges it to gift tax (droits de donation), one of the two forms of the wider duty on gratuitous transfers (droits de mutation à titre gratuit) that also captures inheritances. The tax is not a flat percentage of what you give. It is worked out in a fixed sequence: first the value of what each recipient receives is established, then a personal allowance (abattement) is deducted according to how the giver and the recipient are related, and only the balance is charged to a progressive or proportional scale of rates (Article 777 of the General Tax Code). The relationship between the two people, not the nature of the asset, is what drives both the allowance and the rate.

Two features make the French system generous where families are close and punishing where they are not. The allowances are large for gifts down the direct line — €100,000 per child from each parent — and the rates start low. But the same gift to a stranger, or even to a niece, is taxed heavily from the first euro above a small allowance, and a gift to someone unrelated to you is charged at 60% (Article 777 of the General Tax Code). Planning a gift in France is therefore largely about who receives it, in what form, and how often.

The rates and allowances have not moved for years. Since 1 January 2013 the amounts of the allowances and the bands of the scale are no longer index-linked and have stayed frozen (loi 2012-958 of 16 August 2012), so the €100,000 figure you read here is the same figure the law has applied for over a decade. That freeze matters in practice, because inflation quietly erodes the real value of every allowance while the headline numbers stay still, and it is one reason lifetime giving — spread across the fifteen-year cycle — has become the backbone of estate planning in France.

Gift tax and the wider duty on gratuitous transfers

It helps to see where gift tax sits. French law charges the same underlying duty whether wealth passes during life or on death, and it uses the same scale of rates and, broadly, the same family allowances for both. The point of giving during your lifetime is not that the duty disappears — it is that you can use the allowances more than once across the years, fix values at the date of the gift, and choose the moment and the structure, none of which is possible once the estate has opened on death. Where a gift is made and taxed, and the giver then lives more than fifteen years, that gift falls out of account entirely for the tax on later gifts and on the estate (Article 784 of the General Tax Code). The whole architecture of French gift tax rewards giving early and giving in stages.

Gift allowances by relationship

The personal allowance is the amount each recipient can receive from each giver before any gift tax is due, and it depends entirely on the family tie. It is deducted from the value of the gift before the scale of rates applies, and — crucially — it is per giver and per recipient, so a couple giving to a child can each use their own allowance. The allowances that apply to gifts are set out in Articles 779 and 790 B to 790 G of the General Tax Code, and the table below states each one with the article that fixes it.

Several points about the table repay attention. The €100,000 direct-line allowance applies to each child, and also to each of the giver's own parents where the gift goes up the line rather than down (Article 779, I of the General Tax Code). Where a child has died before the giver, that child's own descendants step into the child's place and share the €100,000 allowance the deceased parent would have had, in the same way representation works in a succession. A grandchild receiving directly from a grandparent has an allowance of €31,865 in their own right (Article 790 B), and a great-grandchild €5,310 (Article 790 D); both of these renew every fifteen years like the others.

The married and partnered allowances are worth isolating. A gift between spouses is taxed, but with an allowance of €80,724 (Article 790 E of the General Tax Code); the same €80,724 allowance applies to a gift between partners bound by a French civil partnership, a PACS (Article 790 F). This is the point on which spouses and partners are treated very differently on a gift than on death: on death a surviving spouse or surviving PACS partner pays no duty at all, but during life a gift between them is charged, subject to that €80,724 allowance. The partner allowance even extends to civil partnerships validly concluded abroad, provided they organise the partners' shared life and have been registered before a competent authority.

Below the direct line, the allowances fall away quickly. A gift to a brother or sister carries an allowance of only €15,932 (Article 779, IV of the General Tax Code), and a gift to a nephew or niece only €7,967 (Article 779, V). One allowance is generous whatever the family tie: a recipient who is unable to work normally because of a physical or mental disability has a specific allowance of €159,325 (Article 779, II), and it stacks on top of any allowance the relationship itself would give.

Allowances stack, and each giver has their own

Because the allowance is measured for each giver and each recipient separately, a married couple who own an asset jointly are treated as each giving half of it. A gift of a jointly-owned asset to a common child is therefore made half by each parent, so the child uses the €100,000 allowance twice — once against each parent's half — and enters the progressive scale twice as well (Article 779, I of the General Tax Code). A couple can, on this basis, pass €200,000 to each child free of gift tax, and repeat it fifteen years later. The family cash-gift exemption of €31,865 (Article 790 G) also stacks on top of the ordinary €100,000 allowance rather than being absorbed into it, which is the single most useful combination in French gift planning and the subject of the next section.

Gifting money to children tax-free (€100,000 + €31,865)

A parent can give an adult child up to €131,865 in cash entirely free of gift tax, and repeat it every fifteen years. That figure is the sum of two separate reliefs that French law deliberately allows to be combined: the ordinary direct-line allowance of €100,000 (Article 779, I of the General Tax Code) and the family cash-gift exemption of €31,865 (Article 790 G). Used together by two parents, a couple can move €263,730 to each adult child in a single round, and start the clock again fifteen years later.

The family cash gift (don familial de sommes d'argent) is a targeted exemption with its own conditions, and it applies only to money. A gift of a sum of money — by cheque, bank transfer, money order or cash — to a child, grandchild or great-grandchild, or, where the giver has no such descendants, to a nephew or niece, is exempt up to €31,865 every fifteen years (Article 790 G of the General Tax Code). Two conditions are strict and are tested at the date of the gift: the giver must be under 80 years old, and the recipient must be an adult, that is at least 18 or legally emancipated. Miss either — a giver who has turned 80, a recipient still a minor — and this specific exemption is simply unavailable, though the ordinary €100,000 allowance still is.

It is worth being clear about what the €31,865 is and is not. It is an exemption for cash specifically, not a larger version of the €100,000 allowance; it does not apply to a gift of property, shares or any asset other than money. It is personal to the giver-and-recipient pair and capped at €31,865 whatever the number of separate cash gifts made between them within the period. And, like the ordinary allowances, it reconstitutes every fifteen years, so the exemption is a recurring tool rather than a once-in-a-lifetime one. A well-drafted deed will often specify that the €31,865 exemption is to be used first, leaving the €100,000 allowance intact for a later gift — a small point of drafting that can preserve real value if the giver dies within fifteen years.

Where the sum given exceeds these reliefs, the excess is taxed in the ordinary way, after the personal allowance, on the progressive direct-line scale. So a parent who gives an adult child €200,000 in cash uses the €31,865 exemption and the €100,000 allowance against €131,865 of it, and the remaining balance is charged to the scale. The reliefs do not make the whole gift tax-free; they take the first €131,865 out of charge and leave only the top slice exposed.

The 15-year reset (rappel fiscal)

French gift tax runs on a rolling fifteen-year clock. When a new gift is made, or when the giver dies, French law looks back and adds in any earlier gifts made by the same giver to the same recipient within the previous fifteen years; those earlier gifts are brought back into account for the purpose of the allowances, the bands of the progressive scale and any reductions (Article 784 of the General Tax Code). This "tax recall" (rappel fiscal) is why the same allowance can be used more than once in a lifetime, but only once every fifteen years.

The mechanism works at three levels. First, the personal allowance: if you gave a child €100,000 five years ago, that allowance is exhausted, and a fresh gift today is taxed from the first euro until fifteen years have passed since the earlier gift. Second, the progressive scale: the earlier gift has already used up the lower-rate bands, so the new gift is stacked on top and taxed in the higher bands. Third, the reductions. Only once fifteen years have elapsed between two gifts between the same people does the later gift start again with a full allowance and the scale reset to its lowest band.

Property already given is valued, for the recall, at its value at the date of the new taxable event — but a gift of money is brought back at its face value, without revaluation and without regard to what the recipient did with the cash (Article 784 of the General Tax Code). If a parent gave a child €120,000 in cash and dies within fifteen years, the €120,000 is added back at that nominal figure whatever it was later spent on or invested in. This nominal-value rule for cash is one reason the family cash gift is so useful: the sum is fixed, and future growth on whatever it buys stays outside the recall.

The practical lesson is to think in fifteen-year cycles. A programme of gifts made every fifteen years lets a family move very substantial wealth across a generation at little or no gift-tax cost, because each new cycle brings a fresh €100,000 allowance per parent per child (and a fresh €31,865 cash exemption). Start early, and two or three cycles can pass in a working life; leave it late, and the family is left with a single allowance and a large estate taxed on death.

Declaring a gift (forms 2735 / 2734)

A gift in France generally has to be declared to the tax authority, and how you declare it depends on the type of gift. A gift of real estate must be made by notarial deed and is registered through the notaire. A hand-to-hand gift of money or moveable property — a "manual gift" (don manuel) — is declared by the recipient on a dedicated form, and it is that declaration, rather than the gift itself, that fixes the date from which the fifteen-year clock runs.

The form for a manual gift is form 2735 (CERFA no. 11278), "declaration of manual gifts and gifts of money", filed by the recipient with the tax office, together with payment of any gift tax due, within one month of the gift being revealed to the authority (Article 635 A of the General Tax Code). It is on form 2735 that a manual gift is declared and any tax paid, and the same form is used to declare a family cash gift under the €31,865 exemption. Declaration can also be made online through the dedicated service on impots.gouv.fr. Even where no tax is due because the gift falls within an allowance or the cash exemption, declaring it is what gives the gift a certain date and starts the fifteen-year period.

The option deserves a word of caution, because form 2734 defers the tax rather than cancelling it. Where the recipient opts to declare a manual gift and pay after the giver's death, they must, within the month following that death, file a manual-gift declaration on form 2735, together with payment of the gift tax, mentioning the date of death. And there is a trap that turns on the recall: where an undeclared manual gift only comes to light on the giver's death, through the fifteen-year recall, it is inheritance tax that applies to it, not gift tax, and the reliefs specific to gifts are then unavailable (Article 757 of the General Tax Code). Declaring a gift properly and promptly is not a formality — it fixes both the date and, often, the character of the tax.

A manual gift is also a full gift for civil-law purposes, which the tax declaration does not change. It is subject to the rules on bringing gifts back into the estate on the giver's death (rapport) and to the rules that protect the reserved heirs, so a manual gift made to one child alone can become a source of dispute when the estate is later divided. The tax declaration deals with the tax; it does not settle the position between the heirs, which is why gifts within a family are so often made by notarial deed and, better still, by a gift-division (donation-partage) that shares the family's wealth in a single balanced act.

Who pays the gift tax

Gift tax in France is, in principle, payable by the recipient of the gift, not the giver. That is the default rule: the duty on an act that transfers ownership falls on the new owner unless the deed says otherwise (Article 1712 of the General Tax Code), and the recipient (donataire) is therefore the person the tax authority looks to. All the parties to the deed are, however, jointly liable for the tax, so the authority can in fact pursue any of them for payment (Article 1707 of the General Tax Code).

The important and slightly counter-intuitive rule is that the giver is allowed to pay the gift tax instead, and doing so is not treated as a further taxable gift. The giver (donateur) may step into the recipient's place and pay the duty, and even where they do so by a separate act after the gift, French tax law does not treat that payment as an additional gift attracting extra tax (Article 1705 of the General Tax Code; Cour de cassation, com. 28 February 2006, no. 03-12310). The tax is calculated only on the value of the asset transferred, not on the duty itself, so a giver who pays the tax lets the recipient keep the whole of the gift without any grossing-up.

There is a civil-law counterpart to keep in view. While the giver's payment of the tax is fiscally neutral, in civil law it is itself an indirect gift, and so it counts among the gifts that may have to be brought back into the estate and measured against the reserved heirs' rights on the giver's death. Whether the giver or the recipient should bear the tax is therefore a drafting decision to be taken deliberately in the deed, not left to chance — particularly if the giver may want to cover any additional tax later assessed by the authority, which requires an express clause to be effective.

A worked example

Take a concrete case. A parent gives an adult child a French apartment worth €300,000 by notarial deed, and the child has received no earlier gift from that parent within the last fifteen years. The calculation runs through the standard sequence — value, allowance, then the progressive direct-line scale — and produces a gift-tax bill of €38,194.

First, the value of the gift is €300,000. Second, the personal direct-line allowance of €100,000 is deducted (Article 779, I of the General Tax Code), leaving a taxable amount of €200,000. Third, that €200,000 is charged to the progressive scale for gifts in the direct line (Article 777 of the General Tax Code), band by band:

The same result can be reached by the shortcut that practitioners use for the direct line: apply the top rate that the taxable amount reaches and deduct the cumulative figure for the lower bands. Here the taxable amount of €200,000 sits in the 20% band, so the tax is (€200,000 × 20%) − €1,806 = €38,194, the €1,806 being the fixed deduction that accounts for the 5%, 10% and 15% bands below. Either route gives the same €38,194.

The direct-line scale itself is progressive across seven bands: 5% up to €8,072, 10% from €8,072 to €12,109, 15% from €12,109 to €15,932, 20% from €15,932 to €552,324, 30% from €552,324 to €902,838, 40% from €902,838 to €1,805,677, and 45% above €1,805,677 (Article 777 of the General Tax Code). The same scale applies to gifts between spouses and PACS partners. Gifts between brothers and sisters are charged at 35% up to €24,430 and 45% above; gifts to relatives up to the fourth degree at 55%; and gifts to more distant relatives or to unrelated people at 60% flat (Article 777). The gulf between the 20% a child pays on this slice and the 60% a stranger pays on the whole is the clearest illustration of why relationship, not asset, governs French gift tax.

Two variations worth noting

Two adjustments change this picture and are worth flagging. The first is the reserve of a life interest. A giver can give the bare ownership of the apartment while keeping the use and income of it for life (Article 949 of the Civil Code), and where they do, only the bare ownership is taxed, valued on the age-based scale of Article 669 of the General Tax Code. On that scale a giver aged between 61 and 70 keeps a usufruct worth 40% and gives bare ownership worth 60%, so the taxable base on the same €300,000 apartment falls to €180,000 before the allowance — and on the giver's death the child's full ownership consolidates free of further duty. The second is the family cash gift: had the parent given €300,000 in cash rather than the apartment, and been under 80, the €31,865 exemption would have applied on top of the €100,000 allowance, lowering the taxable base to €168,135 and the tax accordingly.

Frequently asked questions about French gift tax

How much can I gift tax-free in France?

Each parent can give each child up to €100,000 free of gift tax, renewable every fifteen years (Article 779, I of the General Tax Code). On top of that, a parent under 80 can give an adult child up to €31,865 in cash under the family cash-gift exemption (Article 790 G), so €131,865 per parent per child in a single round. Other allowances are smaller: €80,724 to a spouse or PACS partner (Articles 790 E and 790 F), €31,865 to a grandchild (Article 790 B), €15,932 to a sibling (Article 779, IV) and €7,967 to a nephew or niece (Article 779, V).

How often can I gift tax-free in France?

Every fifteen years. French gift tax adds back gifts made to the same person within the previous fifteen years for the purpose of the allowances and the rate bands (Article 784 of the General Tax Code). Once fifteen years have passed since a gift, the allowance renews in full and the progressive scale resets to its lowest band, so the same €100,000 direct-line allowance and €31,865 cash exemption can be used again.

Do I have to declare a gift in France?

Yes, in almost all cases. A gift of French real estate is made by notarial deed and registered through the notaire. A hand-to-hand gift of money or moveable property is declared by the recipient on form 2735 (CERFA 11278), or online, within one month of the gift being revealed, with payment of any tax due (Article 635 A of the General Tax Code). Declaring the gift is also what gives it a certain date and starts the fifteen-year clock, even where no tax is payable.

Who pays gift tax in France?

In principle the recipient pays (Article 1712 of the General Tax Code), and all parties to the deed are jointly liable (Article 1707). But the giver is allowed to pay the tax instead, and doing so is not treated as a further taxable gift (Article 1705; Cour de cassation, com. 28 February 2006, no. 03-12310). Having the giver pay lets the recipient keep the whole of the gift with no grossing-up, which is often the more efficient choice.

What is the family cash gift in France?

The family cash gift (don familial de sommes d'argent) is a separate exemption of up to €31,865 for a gift of money to a child, grandchild or great-grandchild — or, failing such descendants, a nephew or niece — provided the giver is under 80 and the recipient is an adult (Article 790 G of the General Tax Code). It applies only to money, renews every fifteen years, and stacks on top of the ordinary €100,000 direct-line allowance.

Can I reduce French gift tax by keeping a life interest?

Yes, for property. A giver can give the bare ownership of an asset while keeping the usufruct — the use and income — for life (Article 949 of the Civil Code). Only the bare ownership is then taxed, valued on the age-based scale of Article 669 of the General Tax Code (for a giver aged 61 to 70, bare ownership is 60% of the value). On the giver's death, the recipient's full ownership consolidates free of further duty.

Is a gift to a spouse or PACS partner taxed in France?

During life, yes. A gift between spouses or between PACS partners is charged to gift tax, but with an allowance of €80,724 (Articles 790 E and 790 F of the General Tax Code) and the direct-line scale of rates. This differs from death, where a surviving spouse or surviving PACS partner pays no duty at all — the exemption applies to inheritance, not to lifetime gifts.

How our French lawyers help with French gift tax

Gift tax in France rewards families who plan and penalises those who do not, and the choices — how much to give, in what form, to whom, when, who bears the tax, and whether to keep a life interest — all have to be made before the deed is signed. We advise givers and recipients on exactly what a proposed gift will cost, how to combine the €100,000 allowance with the €31,865 family cash gift and the fifteen-year cycle, whether to give bare ownership and reserve the usufruct, and how a gift-division (donation-partage) can share family wealth in a single balanced, tax-efficient act — and we handle the notarial deed and the declaration itself.

This article is for general information only. It does not constitute legal advice and does not create a lawyer-client relationship. How French gift tax applies depends on the family, the assets, their value and location, earlier gifts and their timing. Contact our French lawyers for advice on your situation before acting.