Discussions on the next budget begin in the French National Assembly. The negotiations include, among other things, possible tax changes for inheritances.
In France, possible changes to the taxation of inheritances and gifts are under discussion.
The government wants inheritance of assets from family businesses to remain 75 percent tax-free.
The Greens and the Left want to significantly reduce the tax advantages for inheritances.
Paris. Possible changes to the taxation of inheritances and gifts are also under discussion during discussions on the French budget for 2027. The government wants to make it easier for older people to pass on assets to their offspring. However, it is still unclear which proposals will prevail in parliament, as a majority is difficult to find in France.
The government remains committed to ensuring that inheritance of assets from family businesses should remain 75 percent tax-free. The Court of Auditors had proposed reducing this tax break because it placed a heavy burden on the French national budget.
The Greens and the Left want to significantly reduce the benefits. The Greens want to reduce the deduction from 75 percent to 50 percent. In addition, the increase in the company's value - i.e. the increase in value that has accumulated up to the time of inheritance but has not yet been realized - should be taxed over four million euros. The Socialists and the moderate left's presidential candidate, Raphaël Glucksmann, want to tax an increase of over two million.
To date, the increase in company value has not been taxed upon inheritance in France. The current market value on the date of death of the testator is the new tax acquisition value for the heirs.
In France, opinions on the subject of inheritance vary: should we tax it more? Or, on the contrary, facilitate the transfer of large assets from one generation to the next in order to help the younger generation? The French government has chosen the second option. And wealth should increasingly be transferred tax-free to the next generation during your lifetime, instead of being inherited after death.
The government has proposed two measures. Up to now, you can pass on 31,865 euros to your family every 15 years without paying gift tax. She wants to increase this amount to 50,000 euros. The regulation should apply not only to gifts to children, but also to grandchildren and great-grandchildren and, if there are no children of their own, to nieces and nephews.
A temporary special regulation for donations is also being discussed, which will apply in the first six months of 2027. Accordingly, parents could give their children up to 150,000 euros and their grandchildren up to 81,865 euros tax-deferred.
In addition, parents can transfer up to 100,000 euros to each child every 15 years tax-free. In the event of an inheritance, a parent can also pass on up to 100,000 euros to each child tax-free. Around 85 percent of inheritances in France are below this limit.
Other parties in France, such as the Greens and the Left, want to tax large inheritances higher than before and give more benefits to small inheritances. The Greens propose imposing an additional tax surcharge of ten percentage points on inheritances with a taxable value of more than four million euros. For inheritances over 13 million euros, the surcharge should be a further ten percentage points.
A progressive inheritance tax rate applies to children in France. The taxable share of the inheritance is currently subject to 30 percent inheritance tax from 552,324 euros. From 902,838 euros 40 percent, from 1,805,677 euros 45 percent. Significantly higher rates apply to more distant relatives and unrelated heirs.
The Socialists and Glucksmann want to tax large inheritances starting at two million euros more heavily and increase the top tax rate from 45 to 50 percent. Jean-Luc Mélenchon from the extreme left (La France Insoumise) proposes an upper limit of twelve million euros for inheritances. Assets in excess of this should go entirely to the state. According to the Ministry of Finance, only the richest 0.1 percent of the population would be affected. In 2025, the French state collected 16.1 billion euros in inheritance taxes, according to the Ministry of Finance.
