FRANCE Law and Practice Contributed by: Elodie Mulon, Jennifer Tervil, Romane Lemaitre and Emmanuelle Bonboire-Barthélémy, Chauveau Mulon & Associés
Transfer of Ownership by Donation or Inheritance Determination of the basis for calculating securities In accordance with Article 759 of the General Tax Code (CGI), the basis for calculating French and for - eign securities admitted to trading on a regulated mar - ket is determined by their average price on the date of transfer. In the case of inheritance, this basis may also be calculated on the average of the last 30 prices preceding the transfer. Thus, the value of the securities at the time of their transfer is determined according to objective criteria related to their market price, which forms the basis for calculating transfer duties on a gratuitous basis. Determination of the basis for calculation for real estate For real estate, the basis for calculation depends on the value declared at the time of transfer, after applica - tion of any tax allowances. For example, in the case of a principal residence, Article 764 bis of the CGI provides for a specific allowance that can reduce the declared value. This declared value, plus inheritance taxes and fees, constitutes the acquisition price for calculating the capital gain in the event of a subse - quent resale. However, it is important to note that the application of certain allowances, such as the 20% allowance for the primary residence, may have a negative impact on the taxation of the capital gain realised upon resale. A reduced declared value leads to an increase in the taxable capital gain if the property is resold at a price higher than this value. 2.6 Transfer of Assets: Vehicle and Planning Mechanisms In France, the transfer of assets to younger genera - tions is governed by specific tax rules, particularly with regard to gift tax. Certain mechanisms allow these taxes to be reduced or eliminated, thereby facilitating the transfer of wealth. In the case of a gift, a tax allowance is applied based on the relationship between the donor and the benefi - ciary. Thus, each parent can give up to EUR100,000 to each of their children free of gift tax every 15 years.
For a grandchild, the allowance is EUR31,865, and for a great-grandchild, EUR5,310. Between spouses or civil union partners, the allow - ance is EIR80,724. In the case of gifts between sib - lings, it is EUR15,932, and between uncles/aunts and nephews/nieces, EUR7,967. For all other persons, a single flat-rate allowance of EUR1,594 applies. In addition, a family gift of money may benefit from an additional allowance of EUR31,865 if the donor is under 80 years of age and the beneficiary is of legal age or emancipated. This benefit can be combined with the standard allowances and is renewable every 15 years. The Mechanism for Allocating Gift Tax in the Event of the Return of Property to the Donor Article 791 ter of the CGI, introduced by the Amend - ed Finance Law for 2007, provides for a mechanism to avoid double taxation when the same property is transferred in a direct line of succession. This mecha - nism applies in situations where: • an asset has been transferred through a direct line gift (for example, from a parent to a child); • this asset subsequently returns to the donor’s estate, in accordance with Articles 738-2, 951, and 952 of the Civil Code (in particular in the event of legal or contractual return of the assets); or • a new gift of the same asset is made by the donor to another direct descendant within five years of the return of the asset. In this case, the gift tax paid on the first transfer is offset against the tax due on the second donation. This mechanism aims to avoid double taxation on the same property, while encouraging the rapid transfer of assets to younger generations. 2.7 Transfer of Assets: Digital Assets In French law, digital assets, such as cryptocurrencies and tokens, constitute a relatively recent category of property, introduced by the PACTE Law of 2019. Their legal treatment in the context of inheritance raises specific issues, particularly regarding their qualifica - tion, transfer, and the associated tax obligations.
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