Reader question: I live in France. My parents in the UK plan to send around €15,000 to help me out financially. Do I have to declare it? I may have some more funds in a year or so, in which case I want to help out my nephew, a student in the UK. Would there be any potential complications if I were to send money to him?
As a French resident, you need to declare this gift to the French tax authorities the month after receiving it. Its taxable status depends on whether you have lived in France for at least six of the last 10 tax years.
If you have not, then UK tax rules will apply and there will be no tax implications in France. If, however, you have been resident in France for at least six of the last 10 tax years then French tax rules will apply.
In France, gifts are taxable upon receipt and it is the receiver who is liable. There are, however, tax-free allowances. Children can receive €100,000 tax-free from each parent every 15 years. Provided they have not made other gifts of money or property to you in the last 15 years that exceed these allowances, their €15,000 will be tax-free.
An alternative would be to declare it as a don familial d'une somme d'argent. This is a separate type of gift whereby a parent can give their child a money sum of up to €31,865 tax-free. You must use a special form to declare this gift and the declaration should be made in the month after you receive it, otherwise it falls into the general €100,000 tax-free allowance.
As you are French resident, any gift you give will be taxed under the French gift tax rules. The tax-free gifting allowance between you and your nephew is just €7,967, after which any sums will be taxed at 55%.
A better way to make this gift to your nephew would be to make a of the don familial rule. However, this is only possible if you do not have any children and your nephew is over 18. Again, this gift must be declared to the French tax office using a special form the month after it is made.
This reader question was answered by Sarah-Jane Legge of Ashtons Legal