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Gift Tax (Droits de Mutation à Titre Gratuit)

In order to promote the release of building land and revive housing construction, a temporary exemption from gift tax has been introduced for donations made in the following situations:

  • for full transfers of building land (i.e. the donor cannot retain life use), for which the acte authentique is signed between 1st January and 31st December 2015, on the condition that the recipient builds a new property destined for housing, within four years of the date of receiving the gift.
  • for full transfers of new residential properties, for which a building permit is granted between 1st September 2014 and 31st December 2016, on the condition that the deed evidencing the gift must be signed no later than three years of the date of the building permit and that the building has never been used or occupied at the time the gift is made.In both of the above situations, the following exonerations from gift tax will be given, limited to the declared value of the asset:
  • €100,000 for transfers between descendants or ascendants in direct line, or between spouses and PACS partners;
  • €45,000 between siblings; and
  • €35,000 between any other person.It is also indicated that the total of the donations made by the same donor cannot exceed €100,000. However, what is not clear from the drafting of the legislation is whether or not this limit applies separately for each of the above situations or if this limit is applied globally. Therefore, we will have to wait for further precision on this.

If you would like to find out more about how these changes could affect you, we recommend speaking with your local Spectrum IFA Group adviser.

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