Do French gift laws limit my US annual allowance?
Rules are based on France's taxation treaties
US gift tax rules are quite generous... but do they apply in France?
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Reader Question: Can an American citizen living in the USA make a gift to a French resident using the $18,000 annual gift limit, or must it be limited by French gift laws? Does the French resident need to disclose receiving the foreign gift? Is it taxable in France?
Rules on a resident of France receiving a money gift from a non-resident of France vary depending on whether or not there is a bilateral treaty dealing with taxation of gifts.
In the case of the USA there is such a treaty.
Firstly, with regard to the $18,000 gift limit in the US, the US gift tax rules are very generous. If you plan to give an amount above this, you must declare the gift to the US authorities, but people only actually have US gift tax to pay if their lifetime gifts exceed $13.61million.
In the case of gifts to a French resident by a person who is a US tax resident, there is no French gift tax to pay on gifts of money (unlike, notably, if the non-resident was gifting French real estate). This is covered under article 8 of the 1978 Franco-American treaty on inheritance and gifts.
Read more: What Americans notice when they move to France
Unless the gift is merely a normal birthday or anniversary present, or similar, and in proportion to the means of the giver, then, the recipient in France should normally, nonetheless, make a declaration of the gift to the French authorities, but including a note to the effect that it is not taxable due to the 1978 treaty.
This can be done either online via their personal space at impots.gouv.fr under declarer and then déclarer un don. On paper it is done on form 2735.
This is general information only, and if there is any doubt, we suggest the French-resident recipient should ask their local tax office to confirm the rules and requirements.
