Gift-partition: principles and effects, and what distinguishes it from a simple gift

A gift-partition is a notarized deed by which you give and distribute, during your lifetime, all or part of your assets among your presumptive heirs. The beneficiaries immediately and definitively become the owners of the assets received. Its distinguishing feature is that, with few exceptions, the value of the assets is fixed on the day of the gift and is not revalued upon your death for the calculation of the reserved portion and the disposable portion. Gift taxes are the same as for a simple gift.

This page presents the principles and effects of a gift-partition. It does not address equalization payments, partition rights, capital gains, land registration fees, or the situation of non-residents. It also does not address cumulative gift-partitions.

The principle

The French government's economic website, l'economie.gouv.fr, describes a gift-partition as a notarial act that involves transferring and distributing all or part of one's assets among one's presumptive heirs before death. The Civil Code addresses this in articles 1075 to 1078-10.

• A notarized document. The gift and the division can be the subject of separate acts, with the donor intervening in both.
• A presumptive heir. An heir is someone who, during a person's lifetime, is entitled to inherit from them. The beneficiaries must be eligible. Service-public.gouv.fr gives this example: a single donor with children has their children as presumptive heirs.
• An acceptance. The gift-partition must be accepted by at least one beneficiary to be valid and enforceable against the other heirs.
• Immediate and definitive ownership. The beneficiaries become owners immediately upon the deed of sale.

Gift-partage and simple gift: the differences

Who can give, and to whom?

The donor

The donor must be of sound mind, of legal age or an emancipated minor, and have the capacity to manage their assets. Service-public.gouv.fr specifies that there is no age limit for making a gift-partition. Under guardianship, the donor is assisted or represented with the authorization of the judge or the family council. Under curatorship, they act with the assistance of their curator.

The beneficiaries

• The children. Each spouse can only give to their own children, except in the case of a joint gift.
• A joint gift, If the gift is made jointly with her spouse, it must have at least one child from the marriage and one child from a previous marriage as beneficiaries. Children from a previous marriage do not receive assets belonging personally to the stepparent.
• A transgenerational gift, for the benefit of children and grandchildren: it requires the agreement of the child who waives all or part of his rights, and the agreement of the grandchildren who are beneficiaries.
• Collateral damage, in the absence of children, if they are presumptive heirs on the day of the gift.
• A sole proprietor can make a gift-partition in favor of descendants, but also of distant relatives or third parties.

The property

One can transfer the bare ownership or the usufruct of a property, or give away one's rights in a jointly owned property. With a spouse, the gift can cover jointly owned and/or personal property.

The key point: the value fixed on the day of the gift

According to the French government's economic website, the value of assets given in a shared gift is fixed on the date of the gift. It is not revalued during the inheritance process for the calculation of the reserved portion and the disposable portion. Assets in a simple gift are, in principle, valued during the settlement of the estate.

The source says "except for exceptions" without specifying them. These can be verified in your file.

The limits: reserved portion and disposable portion

The donor is free to distribute the gift as they see fit, but cannot exclude a forced heir. Each forced heir must receive a minimum share. If they do not receive it, they can request a reduction of the gift-partition if it infringes upon their reserved portion of the estate.

The freely transferable portion, or disposable portion, is as follows:

A forced heir can also waive their right to contest the inheritance in advance through a succession agreement. Service-public.gouv.fr indicates that the agreement is signed before two notaries.

Gift taxes and fees

Service-public.gouv.fr indicates that the amount of gift tax and the cases of exemption are the same as for a simple gift. The tax is paid by the recipient on the assets received, after the allowance related to the relationship. Any excess is taxed according to this relationship.

Tax allowances, over a period of 15 years, for the same donor and the same donee:

In direct line of descent, the tax brackets after allowances range from 5 % up to €8,072 to 45 % above €1,805,677. Another page details the allowances and tax brackets.

The notary receives a fee proportional to the full ownership value of the donated assets. The service-public.gouv.fr information sheet on gift-partition indicates the following scale:

This fee schedule is reproduced exactly as it appears on the information sheet, which does not specify which categories of property it applies to: the applicable rate should be verified with the notary. If the gift includes real estate, land registration fees are added. This page does not specify these fees.

The French government's economic development agency, l'economie.gouv.fr, reminds the public that cash gifts to a family member are tax-exempt up to €31,865 every 15 years, provided the donor is under 80 years old and the recipient is an adult. A dedicated webpage provides further details on this scheme.

Cancellation and return clauses

In principle, a gift-partition cannot be annulled. Service-public.gouv.fr cites three cases, which are argued before the court:

• the non-performance of the obligations (for example, housing or caring for the donor): 5 years from the day the donee stopped fulfilling his obligations; ;
• ingratitude, for acts committed after the gift-partition: 1 year from the day the donor becomes aware of the acts; ;
• the birth or full adoption of a child : 5 years from the date of birth or adoption, provided that the donor did not have any children at the time of the gift-partition and that the deed provides for it.

Two reversion clauses exist. The legal right of reversion applies if the child who received the gift dies without descendants. The contractual reversion clause, stipulated in the deed, applies if the beneficiary dies before the donor, with or without descendants.

Numerical example (fictitious profile)

Situation. A single mother has two children, Léa and Marc. She gives them each full ownership of two apartments worth €400,000 each, one to each child, through a shared gift. Assumptions: no prior gifts to these children in the last 15 years, unchanged tax brackets.

Issue. What value will be used for the reserve and quota calculations, and what is the cost of the operation?

Strategy. The firm reviews with the donor and her notary the composition of the lots, their value and the expected rights.

Result.

Details of duties on €300,000: €403.60 + €403.70 + €573.45 + €56,813.60 = €58,194.35.

Notary fees, calculated using the fee schedule on the service-public.gouv.fr website mentioned above, on a property valued at €800,000 in full ownership: approximately €8,481 excluding VAT, or approximately €10,177 including VAT. These fees do not include land registration fees or other expenses, and the applicable fee schedule should be verified with the notary.

Effect of a fixed value. Hypothesis: upon their mother's death, Léa's apartment is worth €650,000 and Marc's €450,000, for a total of €1,100,000. With a gift-partition, the value used for the reserved portion and the inheritance share remains €800,000, except in certain cases. With a simple gift, the assets are generally valued upon settlement of the estate: the difference, in this scenario, is €300,000.

This profile is fictitious. The values at death are hypothetical. The figures do not predict any outcome for your family.

What changes depending on your situation

• The number of children determines the available portion.
• Family composition: children in common or not, grandchildren, absence of children.
• The nature of the assets: real estate, sole proprietorship, undivided rights, bare ownership.
• Gifts already made to the same beneficiary over the last 15 years.
• The relationship to each beneficiary determines the allowance and the rate.

The rule depends on your situation and is verified on your file. No results are guaranteed.