Money. Our advice for understanding the tax on your donations

Whether it's to keep a home within the family or to protect a new spouse, gradual gifts and residual gifts offer great benefits.

In fact, they are based on the principle of double beneficiary: a donor transfers an asset to a donee who must in turn transfer it to a second person.

The only difference between the two types of donation is that for the gradual donation, the property must be transferred by the first beneficiary in the same condition in which it was when he received it; which is not the case for the residual donation, the second beneficiary only receiving from the first what the latter has not used.

Like any donation, these are subject to tax. However, the method of taxation is specific in this case since there are two beneficiaries involved.

Thus, during the first transfer, the donee is taxed according to the rules specific to donations, with a possible reduction depending on their relationship with the donor.

At that point, even if mentioned in the deed, the second beneficiary has no right to pay. The following transmission takes place between the first and second donees.

However, transfer taxes are applied not according to this relationship, but according to that existing between the donor and the second beneficiary.

And the assets are valued at the time of the first donee's death. Furthermore, in addition to the allowance that the second beneficiary can also benefit from, the transfer taxes paid at the time of the first transfer are deducted from those that this second donee must pay.

Georges uses the gradual donation to transfer a property worth €300,000 to his son Lucas and then to his granddaughter Alice.

As a child, Lucas benefits from a €100,000 tax deduction on the property's value. He must then pay transfer tax on the sum of €200,000 according to the following scale.

Remember that a calculation is performed on each slice before adding each of them:

€8,072 x 5% = €403.60

(€12,109 - €8,072) x 10% = €403.70

(€15,932 - €12,109) x 15% = €573.45

(€200,000 - €15,932) x 20% = €36,813.60

In total, Lucas will owe the tax authorities €38,194.35.

Upon Lucas's death, the property is revalued before being transferred to Alice. Let's say it goes from €300,000 to €350,000.

As Georges' granddaughter, Alice benefits from an allowance of €31,865 and will therefore be taxed on the value of €318,135.

The same calculation is then carried out by tranche to arrive at the sum of €61,821.35. Fortunately for Alice, the rights paid by Lucas are subtracted from this amount.

So he still has to pay: €61,821.35 - €38,194.35 = €23,627.