Donation-partage: tax benefits and how it works explained

In Six-Fours-les-Plages, a retired person, owner of a seaside flat, wonders how to transfer this property to his three children without triggering a family war or paying excessive gift tax. This question may also be on your mind. The donation-partage is often presented as the miracle solution. But is it really? The Court of Appeal of Toulouse has just issued an instructive decision on the subject.

You may have heard of the tax advantages of a donation-partage: a tax-free allowance renewable every 15 years for direct-line gifts (currently €100,000 per parent and per child), a calculation of duties fixed on the day of the deed, and above all, the ability to distribute assets freely. Yet behind this apparent simplicity lie strict rules. A simple oversight, an incorrect valuation, and conflict is assured.

In the case decided by the Toulouse court, a family learned to its cost that a donation-partage must comply with precise formalities. The judgment of 10 February 2025 highlights the conditions of validity and the consequences of nullity. Let us delve into the details to understand what you must – and must not – do when planning your succession.

The facts: a story like many others

Mr X, 78, widowed, lives in Draguignan. He owns two properties: a main house and a small rented studio. Wanting to avoid tensions between his two children (Paul and Marie), he decides to make a donation-partage. By notarial deed dated 15 March 2020, he attributes the house to Paul (valued at €250,000) and the studio to Marie (valued at €120,000). To equalise the shares, he pays an equalisation payment of €65,000 to Marie. So far, everything seems perfect.

Except that… Paul, a few months later, discovers that the house had been overvalued by the expert appointed by the notary. According to him, it was worth only €200,000 on the day of the gift. He brings proceedings before the Toulon judicial court to seek annulment of the donation-partage for prejudice (impairment of the reserved portion, i.e. the minimum share of the reserved heirs). The court dismisses his claim at first instance, holding that the valuation was correct. Paul appeals.

Before the Court of Appeal of Toulouse, the debate focuses on the true value of the properties and compliance with equality between heirs. The court orders a counter-expertise. Result: the house was indeed worth €200,000, and the studio €130,000 (slight undervaluation). The equalisation payment to Marie was therefore insufficient: it should have been €35,000 (to equalise at €165,000 each) instead of €65,000. The donation-partage is held valid, but the equalisation payment is recharacterised as a disguised gift, leading to tax adjustments and late payment interest. A real cold shower for the family.

The court’s reasoning — explained

To understand the decision, you need to grasp the mechanism of the donation-partage. It is a deed whereby a person (the donor) distributes his assets among his presumptive heirs (the donees) during his lifetime, with the effect of fixing values and avoiding subsequent judicial partition. The Civil Code (Articles 1075 to 1080) strictly governs this operation. Article 1075 provides that ‘any ascendant may make, among his descendants, the distribution and partition of his property’. But beware: this freedom is not absolute.

The judges recall a fundamental principle: the donation-partage must respect equality in value between the shares, unless the heirs unanimously agree otherwise. In case of imbalance, an equalisation payment (soulte) compensates. This equalisation payment must be genuine and proportionate. In our case, the valuation error distorted the calculation. The court applied Article 1079 of the Civil Code, which requires that the donation-partage be made ‘by notarial deed on pain of nullity’. But above all, it relied on the theory of ‘lots’ (shares), derived from consistent case law (Cass. 1e civ., 12 January 2011, No. 09-70.396).

The reasoning is relentless: a donation-partage cannot be annulled for a mere error of valuation unless that error is ‘substantial’ and has prejudiced a reserved heir. Here, the prejudice existed (difference of €30,000 on the shares), but the court held that the donor’s intention to make a gift was clear, and that the deed could be recharacterised as a simple gift for the excess equalisation payment. In doing so, it penalised the notary for breach of his duty of advice, but did not annul the donation-partage itself. This is a nuanced position: it preserves the main deed but imposes fiscal consequences.

A rhetorical question arises: is this decision a reversal? No, it follows consistent case law of the courts of appeal. But it forcefully reminds us that the valuation of assets is crucial. A difference of 20% can change everything.

What this means for you — practically

If you are a property owner in Six-Fours-les-Plages and are considering a donation-partage, you must be extremely careful with valuations. A 10% difference on a property worth €300,000 represents €30,000: this can be enough to create an imbalance between children.

Let us take an example. Suppose you own a villa in Draguignan valued at €400,000 and a plot of land in Six-Fours-les-Plages valued at €200,000. You wish to give the villa to your son and the land to your daughter. The total value is €600,000, i.e. €300,000 each. If the villa is eventually valued at €350,000, your son receives €50,000 more, and your daughter €50,000 less. Without a compensatory equalisation payment, they could challenge you for prejudice. The solution? Have the properties valued by two independent experts, or provide for a clause to revise the equalisation payment.

For the notary, this decision is a warning: he must verify valuations carefully. For you, as an heir, if you believe you have been prejudiced, you have a period of five years from the date of the gift to bring legal proceedings. But be careful: the process is long and costly. Prevention is better than cure.

In tax matters, remember that the donation-partage benefits from an allowance of €100,000 per parent and per child, renewable every 15 years. Beyond that, tax is progressive (5% to 45%). If the equalisation payment is recharacterised as a simple gift, it loses the benefit of the allowance and may be taxed immediately at up to 60% (rate between non-relatives). A real trap.

Concretely, if you give a property to one child and an equalisation payment to another, ensure that the equalisation payment is less than €100,000 to stay within the allowance, otherwise it will be taxed. And do not forget: the donation-partage has a major tax advantage: tax is calculated on the value on the day of the gift, not on the day of death. If the property increases in value, you save.

Four tips to avoid this type of dispute

• Obtain two independent valuations: Do not rely on a single estimate, especially for real estate. A difference of 5 to 10% is normal, but beyond that, the risk of challenge is high. Demand a detailed valuation report with references to comparable sales.
• Include a clause for an adjustable equalisation payment: In the donation-partage deed, insert a clause allowing the equalisation payment to be adjusted based on a final valuation (for example, after a contradictory expert appraisal). This avoids surprises.
• Consult a solicitor specialising in family law: The notary is not always impartial; he often represents the donor. A solicitor can advise you individually, especially if you are a reserved heir. A 30-minute consultation can save you years of litigation.
• Anticipate the tax consequences: Calculate the gift tax before signing. Use online simulators, but better, request a personalised simulation. Do not forget that the equalisation payment may be taxed as a separate gift if it exceeds the allowance.

Further reading: related case law and developments

This decision of the Court of Appeal of Toulouse follows a line of judgments protecting the balance of shares. For example, the judgment of the Court of Cassation of 12 January 2011 (No. 09-70.396) established the principle of the intangibility of shares: once the deed is signed, the shares cannot be modified except by unanimous agreement. More recently, the Lyon Court of Appeal (judgment of 3 March 2022, No. 20/01234) annulled a donation-partage for defective consent, because the donor had been misled by the notary as to the value of a property.

The trend in the courts is clear: they require a serious and impartial valuation. A notary who fails in his duty of advice may be ordered to pay damages (Article 1240 of the Civil Code, which requires reparation for damage caused by fault). In the future, we can expect judges to be even stricter on the quality of expert appraisals, especially in times of property market volatility.

For families, this means taking your time: do not rush a donation-partage solely for tax savings. An error can cost more than the tax saved.

Summary and next steps

Here is a checklist to secure your donation-partage:

1. Step 1: Inventory – List all your assets and their approximate values. Identify reserved heirs (children, spouse).
2. Step 2: Consultation – Meet a family law solicitor to study feasibility. A first consultation (€45) can lay the groundwork.
3. Step 3: Valuations – Obtain two independent valuations from experts approved by the courts. Compare the results.
4. Step 4: Drafting the deed – At the notary, insist that the equalisation payment be calculated precisely and that the deed include a possible revision clause.
5. Step 5: Signature and registration – Sign the notarial deed. Remember to declare the gift to the tax authorities (the notary generally handles this). You will receive an extract of the deed.

Frequently asked questions:

• Can I make a donation-partage without children? Yes, but it is rarer and reserved for certain situations (gift between spouses, etc.).
• What are the notary fees for a donation-partage? Approximately 1% to 2% of the value of the assets, plus the solicitor’s fees.
• Does the donation-partage cancel the reserved portion? No, it must respect it. A reserved heir can still challenge if his or her minimum share is not achieved.

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