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Allowance is for direct family

When a childless person wants to leave money to a nephew or niece am I right in thinking that, although there is no special allowance on death, there is a special tax-free allowance of €31,865 for a lifetime gift – at least within France? However, I don’t know if any British gift tax would then apply if the donor lived in France and the nephew lived in Britain?  M.R.

27 June 2018
By Hugh MacDonald

You are correct that there is a tax reduction on death called an abattement fiscal for gifts between uncle/aunts and nieces/nephews, but it is of €7,967. Those who are of further family degrees than the immediate niece/nephew to the uncle/aunt have a tax reduction of €1,595.

As for the tax-free allowance of €31,865 for lifetime gifts or cash only, this is only for children, grand-children or great grandchildren, but the donor has to be under 80 to make use of this allowance.

It is not allowed for anyone else, such as uncle/aunts and nieces/nephews.

If the donor is in France, this gift has to be notarised (registered through a notaire), but since in the UK it is the estate that pays any tax, not the beneficiary, the UK beneficiary should not be liable for any tax.

Reader's query answered by Hugh MacDonald

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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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