The proposal for a law to reduce the taxation of gifts and inheritance

In recent years, the legislator has sought to facilitate the transfer of assets within the same family.

Indeed, it soon became clear that the high level of gift tax made many people reluctant to make free transfers. The sums of money were therefore sitting in bank accounts, never used, and consequently never inserted into the French economic circuit, until the death of their owner.

In order to change this situation, a bill was presented on 12 January this year aimed at reducing inheritance and gift taxes.

 

The bill is structured around three main measures:

 

• The increase in the deduction for gifts between grandparents and grandchildren

Currently, in the case of a monetary donation from a grandparent to his or her grandchild, an allowance of €31,865 was applied before being subject to a specific income tax scale.

The bill seeks to amend Article 791 of the General Tax Code to increase the amount of this allowance to €100,000 (the amount currently applied to parent-child gifts).

 

• Increasing the time limit for tax reminders

The current law provides for a tax recall period of 15 years. This means that the amount of tax relief allowed for gifts and inheritances between family members is renewed every 15 years.

The bill provides for an amendment to Article 790G of the CGI, reducing the period for tax recall from 15 to 6 years.

 

• Exemption from inheritance tax of the main residence on the first death

Initially, in the event of the first death of a couple, an allowance of 20% is applied to the real market value of the property constituting the main residence of the deceased on the day of death.

The bill provides for the repeal of Article 793-0 bis of the CGI, which provides for this deduction, and replaces it with a total exemption from transfer duties on the property constituting the deceased’s principal residence on the date of death.

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