I have read a number of articles recently about gift tax in France but it always assumes the gift is from parent to child or grandchild. My daughter wants me to replace my old diesel car with a new electric car and has offered to pay for it. She lives in the UK and I am resident in France. Would this be subject to gift tax and, if so, at what rate?
In France, gifts made during one’s lifetime still fall – give or take a few differences – under standard inheritance tax laws.
The only exemption for gifts made to parents is the standard inheritance tax exemption: for immediate ancestors and descendants, this is €100,000.
Bear in mind that in France it is the beneficiary who is taxed on anything over the allowance.
A gift of a car would be seen as a form of don manuel (an ordinary person-to person gift, as opposed to one formalised by a notaire) and this should be declared, either online or on paper, by yourself to your local tax office (see here).
According to HMRC rules, in the UK large gifts to individuals do not have to be declared to the UK tax service at the time of gifting, though if the giver were to die, they might need to be considered as part of inheritance tax calculations at a later date, especially if the death occurs within seven years of the gift.