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French inheritance tax: How Macron and Le Pen plan changes

Both pledge in different ways to make it easier for assets to be donated or passed down to relatives

Emmanuel Macron and Marine Le Pen both plan to change France’s inheritance tax system, but in different ways Pic: magicinfoto; photocosmos1 / Shutterstock

Emmanuel Macron and Marine Le Pen will spend the next two weeks promoting their largely opposed policies in a bid to attract the support of the French public in the run-up to the second round of this year’s presidential election.

The two candidates differ on nearly everything, from pensions to national security to foreign policy, but their views come close to aligning with regards to inheritance tax (impôt sur la transmission). 

Both are in favour of reducing the rate at which tax is paid on assets passed on after death but would not achieve this in the same way.

Emmanuel Macron 

The incumbent president and La République en Marche candidate would also reduce the tax applied to gifts and inheritance by: 

  • Increasing the tax allowance for direct descendants

President Macron would increase the €100,000 which parents can give to children tax-free every 15 years to €150,000.

A child would therefore be entitled to €300,000 before being subject to inheritance tax.

This would, of course, be of most benefit to more affluent families, as the estate of the average French person totals €118,000, according to figures from national statistics office Insee. 

  • Tax exemptions for up to €100,000 given in gifts to step-children and more distant relations  

Mr Macron wishes to adapt the inheritance tax regime to the reality of today’s society, allowing people to bequeath gifts to indirect descendants such as step families without being penalised. 

People would therefore be able to give up to €100,000 to brothers, sisters, nephews, nieces and step-children without paying any tax.

“Many people want to bequeath [money] to their nephews, pieces, grandchildren, and many families are blended families who currently have nearly no tax allowance,” the president has previously said.

Step-children can only be gifted €1,594 before tax is applied at a significant 60% as things stand today, as inheritance ‘rights’ and tax exemptions are largely limited to blood relations.

People may also only give up to €15,932 tax-free to a brother or sister, with tax being applied at 45% for gifts of more than €24,430.

Nephews and nieces can only receive €7,967 tax-free, with anything above this amount being taxed at 55%.

Marine Le Pen 

The Rassemblement national candidate has said that if she becomes president she would “prioritise the circulation of money within the economy and support for young people.”

This would involve: 

  • Exempting property worth up to €300,000 from inheritance tax bills 

Ms Le Pen has said that she is campaigning for a “rooted France”: “my priority is that French real estate assets are kept for French people,” she has said. 

In order to “keep the transmission of our heritage within families,” she has said that she would exempt property worth up to €300,000 from the calculation of inheritance tax.

Existing laws already include a tax discount of 20% on principal residences, provided that the home is still occupied by a surviving spouse, Pacs partner or dependent child. 

  • Increasing the amount of tax-free money grandparents can gift to their grandchildren 

Currently, grandparents can bequeath €31,865 to each of their grandchildren every 15 years tax free, meaning that a grandchild can receive a total of €127,460 in total from all of their four grandparents before amounts being subject to tax.

Ms Le Pen would allow grandparents to give €100,000 tax-free so €68,135 more than the current tax-free allowance and the same amount as each parent can bequeath to their children tax-free.

The change would mean a grandchild would be entitled to €400,000 tax-free.

Ms Le Pen would also shorten the 15-year time frame to 10 years, meaning the same sums could be given again tax-free after that period.

Related articles 

How to work out if you owe French property wealth tax in 2022

Online tax declarations open: One update is for Britons post-Brexit

Macron - Le Pen: What do they each pledge to change if elected?

French inheritance: What widow/widower must do to stay in shared home

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