Reader Question: How much can you give your grandchildren in France without having to declare it?
The rules around gifts from grandparents are complicated and it is best to seek advice from an expert such as a notaire if you plan to offer grandchildren a sizable financial sum.
However, this article will aim to give an overview of how it works. For more detailed information, you can read our most recent inheritance guide, available to purchase at this link.
The first way you can go about giving a gift tax-free is on a usual celebratory occasion, for example a birthday, wedding, anniversary, etc.
This gift, which can be money or an object, is known as a présent d'usage, and comes without formalities. However, it must be a reasonable amount taking into account your financial position. A general rule is that the amount should not exceed more than 2% of the overall value of your assets or 2.5% of your income.
If you want to make a more considerable gift, the rules are more complicated.
Lifetime gifts (as opposed to bequests after your death) from each grandparent to each grandchild attract a tax-free allowance of €31,865, renewable every 15 years, with a sliding scale of tax applying above that amount.
There is also an additional ‘family money gift’ tax allowance of €31,865 every 15 years which each parent, grandparent or great-grandparent can give to each of their children, grandchildren, and great-grandchildren.
This must be a money gift (including bank transfer or cheque) and must be declared within a month of the gift or you lose the allowance. The donor (eg. grandparent) must be under 80 and the recipient (grandchild) over 18.
It should be noted that if someone makes a significant lifetime gift (une donation) that is to the detriment of their reserved heirs under French law (notably their own children), then in some circumstances the heirs can contest this gift after the donor dies.
All significant gifts, other than présents d’usage, should, according to law, be declared to your tax office (for recipients overseas this is the non-residents’ tax service), and any tax that is payable should be paid, usually by the recipient. However, if the donor opts to pay the tax this is not considered an extra (taxable) gift.
Any gifts can be organised with the help of a notaire, and this is obligatory for gifts of real estate.
You can also give gifts without the services of a notaire, called 'manual' gifts (un don manuel). Even if they are not notarised, they must still be declared and are subject to the same tax rules as described above.
You can find further information on declarations (in French) at this link. They can be made by paper or online.