Lifetime gifts as an alternative to bequests

As an alternative to making a bequest, you can opt to make a gift during your lifetime, which can have tax advantages.

In order to enable you to pass on your French property more quickly to younger generations, French law encourages this.

This early transfer of property can also help avoid problems and arguments between heirs after you die. However lifetime gifts that exceed permitted allowances attract tax as inheritances do.

It is possible to make a gift to anybody but you should take into account the rights of héritiers réservataires – see here.

If someone makes significant lifetime gifts (une donation) which are to the detriment of these reserved heirs then the heirs can contest this after the donor dies.

For example, if you have one child you must bequeath them at least half of your property at the time of death according to French reserved heirship rules, taking into account any donations you may have made (though not ordinary birthday/Christmas presents or occasional small sums to help out). 

While you should bear this in mind, it is, of course, hard to know exactly what your estate will be when you die at the time of making a gift.

Under French law, when all the children of a person or a couple are present when a deed of gift is signed with the notaire (a donation-partage) it is near impossible to challenge the gift after your death. In this case all the children usually receive something of about equivalent value (not necessarily of the same nature). 

Where someone wants to make a gift that would be to the detriment of the reserved heirs, while avoiding any legal action later, another legal strategy is a pacte de famille (see here).

To give more flexibility to lifetime gifts, the law allows donations-partages trans-générationnelles, that is you are allowed to give French property to different generations. 

For instance: Mr Smith has two children (A and B) and B has two children (B1 and B2). He is able to pass a part of his French estate to A and the other part to B1 and B2, with the agreement of B.

From an international point of view, article 750 of the Code Général des Impôts deals with tax on gifts.

1. If the donor is French-resident any property gifted is liable to French gift tax whether it is sited in France or not.

2. If not then the rules depend on where the recipient lives:


a) If the recipient is not French resident, then only French properties are liable to French tax.

b) If the recipient is French-resident (of any nationality), property outside France is liable to tax like French property except if the recipient has been French-domiciled for less than six years in the last 10.

These rules may be altered by gift tax treaties, eg. the US-France treaty says real estate can only be taxed where it is located (there is no such treaty with the UK). 

Allowances and tax rates vary by degree of kinship. This is also the case for inheritance, but there are some differences; for example the gift tax allowance is more generous for grandchildren than for inheritance, however spouses and civil partners are exempt from inheritance tax but have a gift tax allowance of €80,724 (see here).

French taxes are very high for bequests or gifts made to people who are not close relatives. However advantages for making gifts include the fact that the tax-free allowances are renewed after 15 years.

For instance, a parent can give (with no gift tax payable) to each of his or her children up to €100,000 on August 1, 2025, and a similar amount on August 2, 2040.

If a child is severely disabled this can be increased by an extra €159,325 per parent.

There is also an exemption of up to €31,865 for gifts of money to a given child or grandchild or great grandchild or, if none, for nephews and nieces. These are also renewable every 15 years and can be combined with the ordinary allowances for a person of the same category in respect of other gifts. The giver must be aged under 80 and the recipient 18 or above.

Note that allowances relate to tax only and do not mean, for example, that a gift is ignored after 15 years for purposes of legal heirs' reserved portions.

All gifts of real estate are made by a deed signed with a notaire so allowances and exemptions are accounted for (and because of the stamp duty that must be paid and changes to the land registry). This is sometimes also done for other kinds of property.

Tax advisors recommend doing it for significant gifts of money, shares, valuables etc. as the gifts will then be registered and validated for tax and succession purposes avoiding any confusion/arguments later on death. If the recipient is overseas it would be possible to arrange for someone else to sign for them via a power of attorney.

When it comes to so-called 'manual' gifts, that is gifts direct from giver to receiver of objects such as paintings or money or shares, there are specific rules.

How to declare 'manual gifts'

These are not notarised but should be declared by the recipient, to their tax office, usually within a month, online at impots.gouv.fr.

In theory any substantial gifts are concerned, within reason, but not including normal gifts for birthdays or other celebrations that are proportional to the family’s lifestyle.

The system for declaring these can be found inside your personal space at the impots.gouv.fr tax website, under Déclarer > Vous avez reçu un don? Déclarez-le.

If you make use of this, the calculation of tax payable is also automatic, the authorities state.

You can also access some ‘step by step’ information at this link.

In theory recipients abroad should declare to the Service des impôts des particuliers non-résidents at Noisy-le-Grand but in practice if you are a French resident gifting to someone abroad, you will likely need to help and ensure any tax is paid.

This includes gifts benefiting from the rules for cash gifts to close relatives – listed on the form as relating to article 790G of the Code Général des Impôts.

Gift tax can be paid by either the giver or receiver and - if by the giver - this is not seen as an extra gift.

For manual gifts of over €15,000 there is an option (form 2734) to defer any payment of tax until after the donor's death.

Where a notaire is involved there are fees and other costs payable, which are less than for an ordinary transfer by sale (about 2% in total on average as opposed to 7%).

If a giver dies less than 15 years after a donation, the value of the gift is meant to be included in the value of their estate for purposes of the tax-free allowances.

For example if a parent gives €50,000 to a child then dies five years later leaving them property worth €100,000, then the €100,000 child's allowance is applied to €150,000, leaving €50,000 subject to inheritance tax according to the bands.

Prior to the 2022 election President Macron said he wished to increase the children's allowance to €150,000 and allow people to give up to €100,000 tax free to stepchildren, siblings, nephews and nieces. This is however has not yet been acted on.

Note that in 2025 France introduced an additional tax-free allowance (available until the end of 2026) of up to €100,000 for gifts to children/grandchildren for them to buy or build a home.