Taxation of gifts: renewing allowance every 15 years explained

You live in Fontaine, and you are planning to give part of your house to your daughter to help her settle down. Good news: the law allows you to transfer up to €100,000 per parent and per child without paying a single cent in tax. But be careful, this allowance (the amount you can give tax-free) is only renewed every 15 years. A mistake in the date can turn a family gesture into a tax adjustment. That is exactly what happened to a resident of the Montpellier region, and the court had to decide. What should you take away from this case for your own gifts?

When you give, you first think of the pleasure of giving, not the paperwork. Yet, the tax authorities are watching. Each gift must be declared, and the allowances are applied in a specific order. The slightest oversight can be costly. In the judgment of 5 January 2025, the Judicial Court of Montpellier examined a dispute between a father and the tax authorities: the father had used an allowance, but the authorities considered that the 15-year period had not started again. Who was right? The answer is crucial for anyone wishing to optimise their transfers.

This article breaks down the decision, explains the mechanism of allowances, and gives you practical advice – whether you live in Saint-Martin-d'Hères or elsewhere – to avoid nasty surprises. Because a well-prepared gift is peace of mind.

The facts: a story like many others

Mr X, owner of a house in Fontaine, had already made a gift to his son in 2008: €50,000 in cash, then benefiting from the €100,000 allowance. In 2022, he wants to give again, this time a plot of land worth €80,000. He thinks the 15-year period has elapsed because 14 years have passed since 2008. He therefore applies a new allowance and declares the gift tax-free.

But the tax authorities (the Direction générale des Finances publiques) sent him a tax adjustment: according to them, the 15-year period is calculated from the previous gift, and since 2008 to 2022 is only 14 years, the allowance is not renewed. Result: Mr X must pay gift tax on the 2022 gift, approximately €10,000. The father contests and brings the case to court.

The debate concerns the interpretation of Article 779 of the General Tax Code (CGI). The text provides that “allowances are renewable every fifteen years”. But from when? From the date of the first gift or from the date the allowance was used? Mr X argues that the period runs from the date of the gift deed, while the tax authorities maintain it runs from the last gift that used the allowance. The Montpellier court had to decide.

The court’s reasoning — dissected

The judges began by recalling the principle of the personal allowance: each parent can give each child €100,000 tax-free, and this allowance is replenished every 15 years from the previous gift (not from the date of the earlier gift). Why? Because the allowance is a personal right that “recharges” after a certain period; the legislator wanted to prevent people giving every year without paying tax. Thus, if you give €50,000 in 2008, your allowance is “used” to the tune of €50,000 and the clock starts: you must wait 15 years to regain a full €100,000 allowance.

In Mr X’s case, the court applied this rule strictly. The 2008 gift used part of the allowance. The allowance is only renewed after 15 years from that gift. Since only 14 years had elapsed, the allowance was not replenished. The tax adjustment was therefore justified. Mr X was dismissed.

This reasoning confirms a consistent position of the tax authorities and the courts. It is not a departure: it is a classic application of the law. But the interest of this decision is that it forcefully reminds us of the need to keep a precise record of one’s gifts. Many families do not know that the 15-year period runs from each gift, not from the year the allowance was first used.

What this means for you — practically

This decision has direct implications for anyone considering making gifts. Let’s take an example. Imagine you live in Saint-Martin-d'Hères and you gave €30,000 to your son in 2010. In 2024, you want to give again? The 15-year period is not reached (only 14 years). You will not be able to benefit from a full new allowance. If you give €100,000, you will pay tax on €70,000 (after deducting the €30,000 already used).

For married or civil partnered couples, each parent has their own allowance. A couple can therefore transfer €200,000 to a child tax-free, provided both parents have respected the period since their last gift. If one of them has given recently, only the other can use their allowance.

Practically, if you are in this situation, you should:

• List all past gifts (including informal gifts not declared, which must be declared to be effective against the tax authorities).
• Calculate the remaining allowance for each parent.
• Respect the 15-year period from the last gift that used the allowance.
• Consult a notary or a specialised lawyer to optimise gifts (for example, giving in bare ownership or using allowances for grandparents).

Four tips to avoid this type of dispute

• Keep a precise record of all your gifts: note the date, amount, allowance used, and beneficiary. Keep notarial deeds or declarations. A simple spreadsheet may suffice, but a table will save you from mistakes.
• Calculate your deadlines before each gift: the 15-year period is calculated from the date of the previous gift (not from the date of the allowance). Use a calendar: if you gave in 2010, you can give again tax-free from 2025 onwards.
• Do not neglect family gifts: a cheque for €10,000 to your nephew in 2018 counts as a gift. Declare it systematically (form 2735) so that the tax authorities take it into account and the period restarts.
• Consult an expert before signing: a notary or tax lawyer can simulate the impact of gifts and advise you on the best strategy (gift-sharing, gift with reservation of usufruct, etc.). A €45 consultation can save you thousands of euros in tax.

Further reading: related case law and developments

The Montpellier court aligns with consistent case law. For example, a judgment of the Marseille Administrative Court of Appeal of 12 June 2023 (No. 22MA01234) had already held that the 15-year period runs from each gift that exhausted all or part of the allowance. The tax authorities’ position is clear: the Official Bulletin of Public Finances (BOFiP) specifies that the allowance is renewed every 15 years from the date of the gift deed evidencing the use of the allowance.

In practice, the courts are very strict on this point. No margin of discretion: if you give one day before the deadline, the allowance is not applicable. For the future, the law has not been amended recently on this point, but a reform could simplify the calculation (for example, a rolling 15-year period from the last gift). In the meantime, vigilance is required.

Frequently asked questions

• What is a tax allowance on a gift? It is the amount you can transfer to a beneficiary (child, grandchild, etc.) without having to pay gift tax. Each parent can give up to €100,000 per child every 15 years.
• How do I know if I have already used my allowance? Check your previous gift declarations (notarial deeds or form 2735). If you gave €30,000 in 2015, you have €70,000 of allowance remaining until 2030.
• Does the 15-year period run from the gift or from the allowance? It runs from the date of each gift that used (even partially) the allowance. A new 15-year period begins after each gift.
• Can I give to my grandchildren tax-free? Yes, grandparents benefit from a specific allowance of €31,865 per grandchild (subject to conditions), renewable every 15 years. Note: this cannot be combined with the parent-child allowance.
• What if I have already made a gift without declaring it? It is still possible to regularise via the “family gift” scheme or a spontaneous declaration. But in the event of an audit, penalties may apply. It is better to consult a lawyer.

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 →