For modest amounts, you can freely gift money to your grandchildren without any paperwork. For larger sums, only a "customary gift" (known as présent d'usage in French tax law) lets you skip declarations. These gifts have strict conditions. Alternatively, declare larger donations to authorities without immediate tax liability, thanks to generous allowances.
What qualifies as a customary gift that avoids tax reporting?
A customary gift is a cash sum (or items like jewelry, watches, artwork, or cars) given to grandchildren on special family occasions, such as weddings, baptisms, birthdays, graduations, or holidays like Christmas. It functions as a traditional family present.
Beyond the occasion, the gift's value must align with your financial situation—your assets, income, lifestyle, property, and savings. Experts generally advise keeping it under 2% of your total assets or 2.5% of your annual income to stay safe.
French tax authorities haven't set fixed limits, but amounts must seem reasonable based on your circumstances. Excessive sums risk reclassification and taxation later.
Neither you nor your grandchildren need to declare customary gifts, as they fall outside inheritance rules.
"Hand-to-hand" (manual) donations require your grandchildren to file form 2731 within the month received, but they qualify for a €31,865 tax allowance per donor.
This means you can gift up to €31,865 tax-free. It's renewable every 15 years. Above that, progressive gift tax applies: 5% up to €8,072, 10% from €8,073–€12,109, rising to 45% over €1,805,677.
With the allowance, gifts near €32,000 typically incur no tax, even after declaration.
Family donations (another category) offer the same €31,865 exemption, combinable with manual gifts. Conditions: donor under 80, recipients over 18.
From July 15, 2020, to July 1, 2021, donate up to €100,000 tax-free (declare only) for grandchildren's main residence purchase, energy-efficient renovations eligible for bonuses, or starting/growing a micro-business (<50 employees, <5 years old, no profits distributed, <€10M balance sheet).
Pay via check, transfer, or cash; funds must be used within 3 months.
