Which gifts are liable for tax in France?

Reader Question: As a resident of France, how much can I give away each year free of tax?

In France, gift tax may be assessable on most gifts other than those made on birthdays or similar special occasions. With regard to such présents d’usage, the value of gift that may be considered exempt depends partly on the lifestyle of the family, and relates to the fact that they should not be deemed unusual or to cause financial difficulty to the giver. 

Due to this quirk, for example, a new car given by a wealthy person to their child for their birthday could fall under this, whereas this would not apply if the giver is earning the minimum wage. 

Also, gifts to some charities are free of tax (you should check with the charity, if in doubt).

Otherwise, any substantial gifts should be declared and are potentially subject to tax called droits de donation.

Any gifts of real estate must be subject to a notarised deed, and it is also recommended to go via this process for other large gifts (of money, shares etc). Otherwise, ordinary gifts are described as dons manuels (‘manual gifts’).

It is usually the recipient who should declare the gift, the simplest way being via their account at impots.gouv.fr under the Déclarer section and Déclarer un don manuel (gifts to non-residents may be declared to the non-residents’ tax service here). 

However, the tax can be paid either by the giver or recipient, and in the former case it is not seen as another taxable gift.

Some countries, including the US (but not the UK) have double tax treaties with France on gift tax, but in the case of the US treaty, it simply confirms a gift by a French resident is taxable only in France.

As for how much you can give tax-free, allowances depend on the relationship with the recipient, and are renewed every 15 years. 

In the case of a child, for example, you can give up to €100,000 a year and above this bands at different percentages apply, from 5% to 45%. 

On the opposite end of the scale are gifts to unrelated people, which are taxed with no allowance at 60% - more information can be found in our previous article here.

It is also worth knowing that a special additional tax-free allowance exists for ‘family gifts of money’, of €31,865 for children, grandchildren, or, if none, to nephews and nieces.