Inheritance tax: 3 examples to limit costs

How is it possible to pass on assets at a lower cost?

Bernard wants to start passing on part of his estate to his daughter Emma, by giving her an apartment that he rents out. But he doesn't want to deprive himself of everything just in case... nor does he want his daughter to suffer tax penalties.
The solution is to make a gift with usufruct reserved (known as dismemberment of ownership). In this way, the parents retain the use of the property and continue to receive the rent. Another advantage: Emma will only have to pay gift tax, with the corresponding allowances calculated on the value of the bare ownership transferred. This value varies according to the donor's age at the time of the gift. The younger the donor, the lower the value. On the donor's death, Emma will recover full ownership of the property without having to pay inheritance tax.

How much can I give my grandchildren?

Nicole and Serge wanted to give their 4 grandchildren a financial boost. They have heard that, by doing so, their children would also be exempt from inheritance tax.
In fact, each grandparent can give up to €31,865 every 15 years, free of inheritance tax. This ceiling applies to donations made by the same donor to the same beneficiary. The exemption only applies to gifts of sums of money made by cheque, bank transfer, money order or cash. But to benefit from this allowance :
- the donor must be under 80 ;
- the beneficiary must be an adult (or emancipated) and be, in relation to the donor, the donor's child, grandchild or great-grandchild.re-grandchild (or, if the donor has no descendant, his or her nephew or niece, or by representation, his or her grand-nephew or grand-niece).

Not to be confused with customary gifts
Who hasn't received (or made) a small gesture on the occasion of a birthday, the passing of an exam, a wedding? Is this a manual gift or a customary present? The two concepts have little in common. A customary present is a gift whose value is related to the lifestyle and financial capabilities of the giver. A gift of use is not "reportable" to the donor's estate, i.e. it will not be taken into account when the estate is opened and the assets distributed among the heirs. It is not subject to gift tax, due to the modest amount or value of the property donated in this way.

How can life insurance be used for inheritance purposes?

Sophie has taken out a life insurance policy for her granddaughter. She hopes to pass on the benefits of an attractive tax regime to her granddaughter, but she's not sure under what conditions.
Life insurance allows you to pass on capital to one or more designated beneficiaries under advantageous tax conditions. Life insurance is exempt from inheritance tax provided that the amount passed on does not exceed €152,500, and that the premiums were paid by a policyholder under the age of 70. If you pay into your life insurance policy before the age of 70, each beneficiary (other than your surviving spouse or civil union partner, who are exempt from inheritance tax) can receive up to €152,500 tax-free.

Marie-Christine MENOIRE