Sunday, 22 May, 2022

CQFD: inheritance and inheritance costs, how does it work?

The Minister of Public Accounts, Gérald Darmanin, once again mentioned in an interview the possibility of taxing less the heritage that parents pass on to their children during their lifetime. The subject is explosive, the government being able to be accused of favoring the heirs.

CQFD: inheritance and inheritance costs, how does it work?

Inheritance is financial or real estate heritage passed down from one generation to the next. For some, it is a source of inequalities, because it provides certain families with a comfortable standard of living, unattainable for those who would never have received an inheritance. For others, inheriting is a right, and on the contrary, transmission must be encouraged, as evoked by the Minister of Public Accounts, Gérald Darmanin.

In France, when a person dies, his heirs have to pay inheritance fees. In an inheritance, each part is taxed separately. The tax is calculated for each of the heirs according to their link with the deceased. No tax for the spouse, on the other hand, on condition of being married or in a civil partnership.

The growing share of inheritance in heritage

Children are entitled to an allowance of 100,000 euros. Beyond that, the tax is calculated by installment and the inheritance is taxed from 5% to 45%. Thanks to the allowance, the majority of heirs do not pay tax. In France, 50% of heirs receive less than 29,400 euros. This tax was therefore especially designed to tax the largest inheritances.

But according to economist Clément Dherbécourt, the wealthiest escape the maximum tax. In recent years, the weight of inheritance in heritage has grown. In 1980, inheritances and donations represented 8% of a household’s disposable income, compared to 19% today. Each year, inheritance tax brings the state nearly 12 billion euros.