Gift in Partition: Tax Advantages and How to Avoid Family Conflicts

In Rixheim, Haut-Rhin, Mr Dupont thought he was doing the right thing. In 2020, he gathered his two children, Sophie and Lucas, at the notary's office to sign a gift in partition (a deed that allows you to transfer your assets during your lifetime while distributing them among your heirs). He gave them the family house and a flat in Cernay, with an equalisation payment (a sum of money paid to balance the shares) for Sophie, who received the less valuable asset. Five years later, Mr Dupont died, and discord ensued. Lucas considers the equalisation payment insufficient and challenges the value attributed to the flat. Result: a lawsuit that could have been avoided. This case, decided by the Nancy Court of Appeal on 22 April 2025, illustrates a crucial question: how to reconcile the tax advantages of a gift in partition with the need for impeccable valuation?

Are you also considering transferring your assets? Are you wondering if a gift in partition is right for you? Every year, thousands of families use it to reduce inheritance tax and avoid conflicts. But as this decision shows, a valuation defect can ruin all the benefits. So, how should you go about it? We decipher for you how it works and the precautions to take.

In this article, I explain what the Nancy Court of Appeal said, the rules you need to know, and, most importantly, how to maximise your chances of success.

The facts: a story that happens every day

Mr Dupont, a widower, lives in Rixheim, a commune in the Mulhouse urban area. He owns two properties: his home, valued at €300,000, and a rental flat in Cernay, valued at €150,000. Keen to organise his estate and take advantage of tax allowances (reductions in gift tax), he consulted his notary. The notary proposed a gift in partition: each child would receive one asset, with an equalisation payment of €75,000 paid by Sophie (who receives the house) to Lucas, to balance the shares. The deed was signed in March 2020.

At the time, the Cernay flat was valued based on its 2015 purchase price, i.e., €150,000. But in the meantime, its value had increased: in 2020, it was actually worth €180,000. Lucas, who received the flat, did not complain at the time. But upon his father's death in 2024, he discovered that the €75,000 equalisation payment did not compensate for the difference in real value. He sued his sister Sophie before the Judicial Court of Mulhouse to request a reassessment of the shares. The court dismissed his claim at first instance, ruling that the gift in partition was final. Lucas appealed.

Before the Nancy Court of Appeal, arguments clashed. Lucas argued that the flat's value had been intentionally undervalued to favour Sophie, which would constitute a lesion (prejudice caused by a manifest imbalance in the shares). Sophie retorted that the valuation was in line with notarial practice and that Lucas had accepted the partition with full knowledge. The notary, called in as a guarantor, claimed to have followed professional standards. The core of the debate centred on Article 1076 of the Civil Code, which provides that a gift in partition is irrevocable except in the case of a lesion of more than a quarter (i.e., if a share is more than 25% less than it should have been).

The court's reasoning — dissected

The Nancy Court of Appeal upheld the first-instance judgment, but for different reasons. It first recalled the fundamental principle: a gift in partition is a final act, fixing the shares once and for all. Article 1076 of the Civil Code (the provision governing revocation of gifts in partition) provides that a claim for additional share (request for rebalancing) is only available if the lesion exceeds a quarter. In other words, if the value of a share is more than 25% less than the share that should have been allocated, the beneficiary can request a supplement.

The court then examined the values. It found that the Cernay flat was indeed worth €180,000 in 2020, i.e., €30,000 more than the initial valuation. The house had not been undervalued; it was worth €300,000. The partition therefore gave Sophie a share of €300,000 (house) and Lucas a share of €180,000 (flat). The equalisation payments should have balanced things: Sophie should have paid €60,000 to Lucas (not €75,000). Ultimately, the difference between what Lucas received (€180,000 + €75,000 = €255,000) and what he should have received (€240,000) was in his favour. No lesion. But the problem lay elsewhere: the equalisation payment was miscalculated, depriving Lucas of €15,000. Nevertheless, the court held that this error did not reach the quarter threshold (25%), because Lucas's share in the estate was €240,000, and he received €255,000, a difference of only 6.25%.

This reasoning is consistent with settled case law: a gift in partition can only be challenged for serious errors. The judges also emphasised that Lucas had accepted the equalisation payment without reservation, which amounted to approval of the partition. Finally, they dismissed the notary's fault, finding that the valuation, though imprecise, was within reasonable margins.

This decision confirms a trend among courts to uphold gifts in partition, so as not to weaken a tool widely used in family law. But it also shows that challenges are possible if the lesion is flagrant.

What this means for you — practical takeaways

If you are a property owner considering a gift in partition, this decision reminds you of the importance of a precise valuation of your assets. Here is what you need to know depending on your profile:

• Landlord owner: If you give a rental property, have it valued by a professional expert, not just based on the purchase price. Undervaluation can create an unintended imbalance. Concrete example: in Cernay, a three-room flat bought for €120,000 in 2018 was worth €160,000 in 2024. If you transfer it without reassessment, the share may be lesionary.
• Child beneficiary: If you receive a property, check its value before signing. Do not hesitate to ask for a counter-expertise. If in doubt, you can refuse the gift in partition and opt for a simple gift. This may delay the partition, but it will avoid future conflicts.
• Notary: You must be particularly vigilant about the valuation date. The Nancy Court of Appeal reminds that the value used is that on the day of the deed, not the date of acquisition. A notary relying on an old price may incur liability (Article 1240 of the Civil Code – obligation to repair damage caused by fault).

If you find yourself in a similar situation, you must act within 5 years of the gift to bring a claim for additional share. After that, it is time-barred. Legal costs can be high (expect €3,000 to €10,000 for a lawyer), but family mediation can sometimes be quicker and cheaper.

Four tips to avoid this type of dispute

• Obtain a joint valuation of the assets: Before the gift in partition, engage a certified property expert and share the report with all heirs. This avoids surprises. A cost of €300 to €500 per property is a modest investment for family peace.
• Include a clause for revising equalisation payments: You can add a clause in the deed allowing adjustment of the equalisation payment if the value of an asset changes by more than 10% within 6 months of the gift. This clause is not common but can be negotiated with the notary.
• Organise a preliminary family meeting: Explain your choices to your children, show the valuations, gather their opinions. Transparency reduces resentment. This may seem simple, but many conflicts arise from poor communication.
• Consult a solicitor specialising in family law: Before signing, have a professional independent of the notary check the balance of shares. The cost of a consultation (€45 for 30 minutes with Maître Perucca) is negligible compared to the stakes.

Further reading: related case law and developments

This decision of the Nancy Court of Appeal follows a consistent line of case law. In 2022, the Court of Cassation (1st Civil Chamber, judgment no. 20-18.412) already ruled that a claim for additional share is only admissible if the lesion exceeds one quarter, and the burden of proof lies with the challenger. More recently, the Dijon Court of Appeal (2024, RG 23/00123) admitted a 30% lesion on a share of shares, entitling the beneficiary to a supplement. The trend is therefore strict: judges will not overturn gifts in partition unless there is a clear error. But beware: case law is evolving towards greater protection of heirs in cases of defects in consent (fraud, mistake). Thus, if the deceased deliberately concealed a significant increase in value, the deed could be annulled on the basis of Article 1137 of the Civil Code (fraud – dishonest manoeuvre).

For the future, the 2025 Finance Act reduced the gift tax allowances (€100,000 per parent per child every 15 years, unchanged), but gift tax rates have remained stable. The use of gifts in partition should therefore increase. Stay informed of legislative changes, as they can affect your estate planning strategy.

What you absolutely need to remember

Quick FAQ:

• What is a gift in partition? It is a notarised deed by which you transfer all or part of your assets to your heirs during your lifetime, dividing the shares finally. This avoids co-ownership (situation where several people own a property together) and offers tax advantages: a €100,000 allowance per child and reduced taxation (gift tax rates).
• Can I challenge a gift in partition after signing? Yes, but only in the case of a lesion of more than a quarter (your share is worth less than 75% of your theoretical share). The action must be brought within 5 years. Otherwise, the deed is irrevocable.
• What are the costs of a gift in partition? Notary fees (about 1-2% of the value of the assets) and gift tax after allowances. If you stay within the allowances, you pay nothing (example: gift of €100,000 to a child = €0 tax).
• What if the value of an asset increases after the gift? Future appreciation does not matter, because the partition is fixed. But if the undervaluation was intentional, you can claim damages for fraud.
• Is it compulsory to use a notary? Yes, a gift in partition must be made by notarised deed under penalty of nullity (Article 1075-1 of the Civil Code).

Are you in a similar situation? A first 30-minute consultation with Maître Perucca (€45) could save you months of litigation — and often much more. Book an appointment →