Should you use a notaire for gifts in France?

In a recent edition you mention how a notaire is required when you make a gift of a property (bricks and mortar). Is a notaire also needed for other kinds of gift? P.W.

26 September 2018
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It is a good idea for all significant gifts (money, shares, valuables etc...) to be recorded through a notaire as the gifts will then be registered and validated for tax and succession purposes, which can avoid confusion/arguments later on death. If a foreign-based beneficiary cannot come to France it is possible for another person to be granted power of attorney to sign for them.

Since it is the event of the donor making the gift that creates a potential tax charge it does not matter whether the beneficiary is resident in France or not. Foreign beneficiaries who suffer French gift tax and would not have suffered this tax in their own country cannot reclaim a refund.

There is a temptation to do what is called a don manuel, a non-notarised gift, to avoid inheritance tax. However tax offices generally eventually find out, especially in the event of transfers of money – otherwise on death the gift is sometimes revealed and then either the error of certain beneficiaries not inheriting what they should or not having paid past taxes will need to be sorted out.

Property gifts always go through a notaire because of the stamp duty that must be paid and changes to the land registry.

Other gifts do not strictly-speaking have to be done through a notaire as long as you ensure succession records and appropriate taxes are filed and paid (allowances may apply before tax is payable, depending on the relationship with the recipient). It is the recipients’ responsibility to declare the gift (eg. to the non-residents’ tax office for non French residents) and pay any tax, but should the donor pay the tax this is not itself seen as part of the gift for tax purposes.

There are no formalities for présents d’usage which are gifts given on a family occasion and proportionate to the means of the giver.

 

Reader's query answered by Hugh MacDonald

The Connexion welcomes queries and regularly publishes a selection with answers. However, please note that we cannot enter into individual correspondence on money topics. Queries may be edited for length and style. Due to the sensitive nature of topics we do not publish full names or addresses on these pages.

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The information here is of a general nature. You should not act or refrain from acting on it without taking professional advice on the specific facts of your case. No liability is accepted in respect of these articles. These articles are intended only as a general guide. Nothing herein constitutes actual financial advice.

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