Gift from parents

[Joy1]

Hi. My parents ( living in UK) want to give us a one off  ( small) gift to pay for new central heating and other house maintenance. The money will be paid into our UK bank account. Can anyone tell us if this will be subject to French Social charges?Is it best to leave this in our Uk account until we spend it? Confussed!!! What about gifts of money for birthdays? (only small amounts admittedly!) Do these need to be declared? Is there a maximum mamount that can be given/received before it must be declared? Thanks for any help offered! [8-)]

[Sunday Driver]

Gifts between parents and children are subject to an allowance of 50,000 euros per donor so a parent couple may gift up to 100,000 euros to their children without them incurring any gift tax liability.  The allowance lasts for six years and can be part used at any time, up to the maximum.  The allowance limit regenerates after the expiry of the six year period.

The recipients (or their representatives) must file a Form 2735 declaration with the service des impôts des entreprises (SIE).  This registers the gift and allows the total to be monitored and starts the clock for the six years limit. Gifts do not have entered on your tax declaration as they are not subject to income tax or social charges.

 

[Joy1]

Thanks Sunday Driver. I was getting a bit worried that I would loose 40% of any gift in social charges and tax! Taxation in France is so complicated! Will sort out the correct forms.[:D]

[Ron Avery]

[quote user="Joy1"]Hi. My parents ( living in UK) want to give us a one off  ( small) gift to pay for new central heating and other house maintenance. The money will be paid into our UK bank account. Can anyone tell us if this will be subject to French Social charges?

  NO, but if you put it in a savings account anywhere the interest will be subject to French income tax and social charges.

Is it best to leave this in our Uk account until we spend it?

Depends on exchange rate/ interest rate etc Now is a good time to bring euros to France

Confussed!!! What about gifts of money for birthdays? (only small amounts admittedly!) Do these need to be declared? NO, 

 Is there a maximum mamount that can be given/received before it must be declared?

France is a little different to the UK in this respect. The answer is Yes, in France there is a  gift tax, have a look at http://www.sykesanderson.com/articles/french_gift_tax.asp

AND  http://www.sykesanderson.com/articles/french_tax_exemption.asp

Inheritance Tax also applies in the UK for gifts if it is within a period of,  I think 10 years in the UK  before the death of donor, if it is deemed that the gifts are avoiding paying inheritance tax.

Thanks for any help offered! [8-)]
[/quote]

[Joy1]

Thanks for the reply Ron. The amount is not large enough to earn any significant interest, but will of course declare what is paid! My parents are taking equity release on their UK property and are able by UK law to gift a small amount each year(£3000 each, I think) without falling foul of Uk laws.Not to avoid inheritence tax, but to avoid value of house being used to pay for nursing care, if ever needed, instead of giving my sister and myself a (small) inheritance. We understand the UK laws, but the French system is still a bit of a mystery.[8-)]

Joy

[Missy]

[quote user="Ron Avery"]   Inheritance Tax also applies in the UK for gifts if it is within a period of,  I think 10 years in the UK  before the death of donor, if it is deemed that the gifts are avoiding paying inheritance tax.   [/quote]

 

7 years in UK. Went through that marlaky some 10 or 12 years ago. My FIL gifted his son (my OH) some land. He subsequently died and it went to probate etc... The Inland Rev. was very pernickety about it all as the date of the gift was exactly 7 years before the day that my FIL died....

The correspondance involved is not something I wish on anyone!.....  All dusted and done now and we have retained the gift intact (ie no need to sell part of it in order to pay tax)