France Inheritance and Gift Tax Guide (Droits de Succession et Donation)
the French inheritance tax (droits de succession) and gift tax (droits de donation). The guide covers: the progressive rate scales — the rates depend on the relationship between the deceased/donor and the heir/recipient: children are taxed at progressive rates from 5% to 45% (after the allowance of €100,000 per child); spouses and PACS partners are exempt from inheritance tax (the "exonération entre époux et partenaires de PACS" — the surviving spouse or PACS partner pays 0% inheritance tax); siblings are taxed at 35% (after the allowance of €15,932); nieces and nephews are taxed at 55% (after the allowance of €7,967); other relatives and non-relatives are taxed at 60% (after the allowance of €1,594); the tax-free allowances (abattements) — each heir has a personal allowance that applies before the tax calculation: (a) children: €100,000 per child (from the parent), (b) grandchildren: €31,865 (for gifts only), (c) great-grandchildren: €5,310 (for gifts only), (d) siblings: €15,932, (e) nieces/nephews: €7,967, (f) PACS partner/spouse: exempt (no allowance needed because the tax rate is 0%), (g) disabled heir: €159,325 (for certain classes), (h) the parent-child allowance is renewable every 15 years (the "abattement de 15 ans" — the €100,000 allowance renews every 15 years); the donation rules — gifts made during the donor's lifetime (the "donations") are subject to the same rate scales as inheritance tax, but the allowances are more generous: (a) the parent can give up to €100,000 per child every 15 years without gift tax, (b) the donation of business assets can be structured as a "donation-partage" — the donation is split among the children, and the value is fixed at the date of the donation (future appreciation accrues to the children); the life insurance inheritance rules — the life insurance death benefits (the "capitaux décès") are subject to a specific regime: premiums paid before age 70 — each beneficiary receives €152,500 exempt from inheritance tax, and the excess is taxed at 20% (first €700,000) and 31.25% (above); premiums paid after age 70 — the total premiums paid (not the death benefit) above €30,500 are included in the estate and taxed at the standard inheritance tax rates; the forced heirship rules (réserve héréditaire) — French law protects the "héritiers réservataires" (the children): (a) if there is one child, the child inherits at least 50% of the estate, (b) if there are two children, they inherit at least 2/3, (c) if there are three or more children, they inherit at least 3/4; the remaining part (the "quotité disponible") can be freely disposed of by will.
France's inheritance tax system is one of the most progressive in Europe, but the exemption for spouses and the €100,000 allowance per child provide significant relief for families. All amounts in Euros (EUR). For related reading, see our Personal Tax Guide → and Wealth Tax (IFI) Guide →.
Rate Scales by Relationship
- Children and ascendants (direct line): After the €100,000 allowance per child: (a) 5% for the portion up to €8,072, (b) 10% for €8,073 to €12,109, (c) 15% for €12,110 to €15,932, (d) 20% for €15,933 to €552,324, (e) 30% for €552,325 to €902,838, (f) 40% for €902,839 to €1,805,677, (g) 45% above €1,805,677.
- Spouse / PACS partner: The surviving spouse or PACS partner is fully exempt from inheritance tax (0%). This is one of the most favourable spousal exemption regimes in Europe.
- Siblings: 35% after the €15,932 allowance (no progressive scale — flat 35% on the excess).
- Other relatives: Nieces/nephews: 55% after €7,967 allowance. Other persons: 60% after €1,594 allowance.
Gift Tax — Donations
- Renewable allowances: Gifts (donations) benefit from the same rate scales but with more generous renewable allowances. The €100,000 per child allowance renews every 15 years. Grandparents can give up to €31,865 per grandchild (every 15 years). Parents can give up to €31,865 per child for the "donation de sommes d'argent" (cash gift) — the "don Sarkozy" regime (the donor must be under 80, the recipient over 18).
- Donation-partage: A "donation-partage" is a formal gift made by notarial deed that splits the assets among the children at current values. Advantages: (a) the value is fixed at the date of the donation (the future appreciation accrues to the children, reducing the estate tax), (b) the donation-partage can be made every 15 years with a new allowance.
For the life insurance inheritance rules, see our Life Insurance Guide →. For the IFI wealth tax on inherited real estate, see our Wealth Tax (IFI) Guide →.