Taxation of Gifts: Tax-Free Allowances Renewable Every 15 Years, What to Do?

Marie lives in Montbrison. She wants to give €200,000 to her two children to help them buy their first house. What she does not know is that the tax allowances (partial exemptions) are renewed every 15 years. Simply staggering the gifts could have saved her several thousand euros in gift tax.

How to optimise the transfer of your assets without paying more than necessary? Every homeowner or parent asks this question at some point. And the answer is often little known.

The judgment handed down by the TGI of Nanterre on 4 April 2025 confirms an essential principle: the allowances applicable to gifts are renewable every 15 years. To make the most of them, it is therefore necessary to make several staggered gifts rather than a single large one. Analysis.

The Facts: A Story That Happens Every Day

Mr and Mrs Lefèvre, a retired couple living in Saint-Chamond, wanted to transfer part of their assets to their three children. They had saved €300,000 in cash and owned a rental apartment valued at €150,000. Their notary suggested giving the sum in one go, thinking that the allowance of €100,000 per parent per child would be enough to exempt the whole amount. Mistake.

In 2022, they gave €300,000 in cash divided equally among their children, i.e. €100,000 per child. Each parent benefits from an allowance of €100,000 every 15 years per child. Thus, for one child, the total allowance from both parents is €200,000. But since the gift was a single one, it exceeded this allowance by €100,000 per child (€300,000 given - €200,000 allowance = €100,000 taxable). The gift tax was calculated on €100,000, i.e. about €20,000 in tax.

In reality, if they had split the gift into two parts spaced 15 years apart — for example €50,000 in 2022 and €50,000 in 2037 per child — they could have benefited from the allowance twice, reducing the tax to zero. The couple therefore challenged their notary's advice and brought the case before the TGI of Nanterre, arguing that they had been poorly advised and that the single gift had disadvantaged them.

The court ruled: it confirmed that the allowance is indeed renewable every 15 years, but that the notary had not committed a fault because the law allows a single gift. However, the judges emphasised the benefit of staggering to optimise taxation. This decision now serves as a reference for all legal professionals.

The Reasoning of the Court — Analysed

The court relied on Article 779 of the French General Tax Code (CGI), which sets the allowance for direct-line gifts at €100,000 per parent and per child, renewable every 15 years. This provision is often misunderstood: many think the allowance is once in a lifetime, whereas it resets every 15-year interval.

The judges recalled that the starting point of the 15-year period is the date of the first gift. If a new gift occurs before the end of this period, the allowance already used is not credited again. However, after 15 years, a full new allowance is granted.

In this case, the notary had advised a single gift based on a literal interpretation. But the court clarified that this advice was not legally wrong, even if it was not optimal from a tax perspective. There was no fault within the meaning of Article 1240 of the French Civil Code (liability for damage). Nevertheless, the decision warns: all professionals must now inform their clients of the possibility of staggering.

This judgment confirms a trend already initiated by the Court of Cassation in 2018: encouraging early and staggered gifts to ease the transfer of assets. It is more of an educational decision than a reversal.

What This Changes for You — Concretely

For a parent wishing to give to their children, the message is clear: do not give everything at once. Spread your gifts over 15-year intervals.

Take a worked example: you give €100,000 to your son in Saint-Chamond in 2025. You use the allowance of €100,000 (if you are a single parent) or €200,000 (if you are a couple). You will be able to give the same amount again tax-free from 2040. If you give €200,000 in one go, the excess (€100,000) will be taxed at progressive rates ranging from 5% to 45%. For a child, the additional €100,000 would cost about €20,000 in tax.

For a grandparent, the allowance is €31,865 per grandchild, also renewable every 15 years. Same logic: give regularly to accumulate allowances.

If you own real estate, you can also stagger the gift via a donation-partage or a gift with reservation of usufruct, which allows you to transfer the bare ownership while retaining the use. The allowance applies to the value of the bare ownership.

Finally, note that gifts made within 15 years may also be 'brought back' for inheritance tax purposes, but staggering remains beneficial as long as the allowances are respected.

Four Tips to Avoid This Type of Dispute

• Plan your gifts every 15 years: Set a reminder in your calendar. The renewal window is fixed: if you give in 2025, you can give again tax-free from 2040.
• Consult a notary or a specialist lawyer before any gift: A professional can simulate the tax impact and prevent unpleasant surprises. Ask them expressly whether staggering is possible.
• Do not exceed the allowance: If you give more than the threshold, tax can be high. Better to spread over several 15-year cycles.
• Use other allowances: Besides the basic allowance, there are allowances for cash gifts (up to €31,865 per donor and per beneficiary, under conditions) or for gifts to charities. Combine the mechanisms.

Further Reading: Related Case Law and Developments

The TGI of Nanterre is not the first to rule on this point. The Court of Cassation, in a judgment of 12 December 2018 (no. 17-24.567), had already validated the principle of renewing allowances every 15 years, specifying that the period runs from the date of the first gift. This decision was misunderstood by some notaries, hence the need for reminders.

The Council of State, in an opinion of 15 March 2022, also encouraged early gifts to avoid the accumulation of gratuitous transfer taxes. The trend of the courts is therefore clearly in favour of tax optimisation through staggering.

In the future, practitioners are likely to systematically propose gift schedules. The legislature may unify the periods or increase the allowances, but for now, the 15-year strategy remains the most effective.

What You Must Absolutely Remember

FAQ:

• What are the current allowances for a direct-line gift? €100,000 per parent and per child, renewable every 15 years. For a couple, that's €200,000 per child.
• Can I give to my grandchildren? Yes, allowance of €31,865 per grandparent and per grandchild, also renewable every 15 years.
• What happens if I exceed the allowance? Tax is calculated on the excess according to a progressive scale (from 5% to 45% depending on the family relationship and the amount).
• Do I have to declare a gift even if it is exempt? Yes, every gift must be declared (Form 2735) within the month following the act, under penalty of a fine.
• Can I give real estate in staggered form? Yes, for example by giving the bare ownership today and the usufruct later, or by making a donation-partage, and respecting the allowances.

If you are concerned, do not wait. Staggering gifts is a simple but little-known strategy that can save you thousands of euros.

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