What is effect of cash gifts to son?

I AM tax-resident in France. My son is tax-resident in the UK, with joint British-French nationality. Are there tax and legal implications if I give him occasional cash presents of €1,000 on his visits a few times per year? P.W.

Your question relates to the French rules on donations (gifts), which have inheritance implications.

In France, inheritance law is dependent on the country of residence of the donor, ie. yourself. As you are fiscally resident in France, you fall under French inheritance law.

First, bear in mind that France has a forced succession system, where each child has a right to inherit a fixed minimum of their parent’s estate (the réserve héréditaire). Your estate comprises both what you had during your life, where gifts to children are concerned, as well as what you actually possess at the date of your death. Accordingly, all gifts need to be recorded in order to ensure that, under French law, when you die, the law can ensure that each child receives his or her rightful minimum legal portion.

This gives rise to two issues: how to make sure the gift is registered so it can be accounted for, and a limit on how much you can give your child. If you give too much, then other heirs could seek compensation from your son after you die (Connexion publishes a helpguide on French inheritance rules, priced €7.50).

The other thing to bear in mind is that, after you die, your estate will be subject to French inheritance tax; however, within certain limits, money gifts to children made during your lifetime will not be taken into account for taxation (though they are for the réserve héréditaire).

Each child can have a cash gift of e31,395 per year without suffering any tax liability on it.

Three conditions need to be met:

- The gift needs to be made in cash or as a cheque or bank transfer, and can be made in several amounts during the year.
- The child has to be an adult.

- The donor has to be at least 65 if they are the parent or at least 80 if the grandparent.

With regard to registering the gift, it is usually up to the beneficiary to make a declaration to his or her local French tax office on a specific form.

However your son cannot do this, because he lives in the UK. Accordingly, it is wise to visit a notaire, who can officially record the fact you are making the gift to your son. This will avoid any potential complications after you die if anyone contests gifts made to your son.