Last update of this article: may 2025
Many families are unaware that a tax-free donation in France is possible under a temporary scheme. In a Franco-Italian context where wealth transfer is a major concern, the 2025 Finance Act introduces an exceptional scheme: Article 790 A bis of the French Tax Code. Below is the full explanatory text.
Tax-Free Donation in France: Temporary Exemption Explained
Introductory context
Donations and Successions: New Article 790 A bis of the CGI
In force since February 16, 2025
(Finance Act No. 2025-127 of February 14, 2025)
Abstract: Family donation tax-exempt up to €300,000 per beneficiary – Cash donations used for the purchase of new property or energy renovation of main residence – Temporary scheme valid until December 31, 2026.
In France, free transfers of wealth—whether through inheritance or donation—are in principle subject to gift and inheritance tax (DMTG). However, to promote capital transfers within families and support intergenerational solidarity, the legislator has implemented various exemptions, some permanent and others temporary.
Among the existing schemes is Article 790 G of the French Tax Code (CGI), which provides for an exemption on cash donations under certain conditions: the donor must be under 80 years old, the recipient must be of legal age or emancipated, and the exemption limit is set at €31,865 per recipient. This mechanism, renewable every 15 years, is a classic tool for early estate planning with no tax burden.
In addition to this scheme, a more generous but more strictly regulated temporary scheme has been introduced by Article 790 A bis of the CGI.
It was introduced by the 2025 Finance Act, entered into force on February 16, 2025, and applies to donations made until December 31, 2026.
This scheme deserves special attention from families looking to optimize their wealth transfer strategy.
Want to know if this scheme could apply to your case?
Do not hesitate to contact us in order to clarify your situation on these issues; we will be happy to help you.
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Article 790 A bis of the CGI introduces an exceptional exemption from donation tax on cash gifts, provided that the amounts are used for very specific purposes. This scheme is part of a broader policy to boost the economy and support younger generations, encouraging investment in new housing and energy renovation of main residences.
Key features of this regime
1. Restricted family relationship
The regime is limited to donations made by a private individual to a direct descendant (children, grandchildren, or great-grandchildren). In the absence of direct descendants, a niece or nephew may also be eligible. This restriction reflects the intention to keep the exemption within the close family circle.
2. Tax-exempt limit
The exemption is capped at €100,000 per donor and is not renewable. This amount is separate from the standard allowances applicable to donations. It is therefore a complementary exemption, potentially cumulative with that provided under Article 790 G of the CGI.
3. Specific use of funds
To qualify for the exemption, the donated funds must be used by the recipient within six months of receipt for one of the following two purposes:
- The purchase of a new property or off-plan housing;
- Energy-efficient renovation of their main residence (eligible for “MaPrimeRénov”).
4. Minimum holding period
The beneficiary must retain ownership of the purchased property for at least five years. Otherwise, the exemption may be revoked by the tax authority.
5. Limited timeframe
The donation must be made between February 16, 2025, and December 31, 2026. After that date, the scheme will lapse unless renewed by future legislation. It is therefore crucial to act within the prescribed timeframe.
6. Incompatibility with other state aid
This scheme is not compatible with the tax credit provided by Article 199 sexdecies of the CGI, income tax deductions, or the energy transition bonus provided by Article 15(II) of Law No. 2019-1479 of December 28, 2019.
A valuable opportunity not to be missed
This temporary scheme is a real opportunity for parents and grandparents to support their descendants while optimizing their tax position. It allows significant capital to be transferred tax-free, provided certain conditions are met and action is taken in good time.
It is highly recommended that taxpayers domiciled in France consult their trusted advisor to assess the applicability of this scheme to their family and estate situation. As the deadline approaches – December 31, 2026 – families are encouraged to act early to take full advantage of it.
Want to know if this scheme could apply to your case?
Do not hesitate to contact us in order to clarify your situation on these issues; we will be happy to help you.
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The opinion expressed in this article is for informational purposes only.
This article does not constitute legal advice.
In addition, it is important to remind that each client’s tax issue is different because each client’s personal situation is different.
Should you have a similar tax issue, please contact us for an initial discussion of your case.