France proposes temporary tax cuts on family gifts and cash transfers in 2027 budget plan

The Transmissions 2027 initiative

On 12 September 2026, the office of French Prime Minister Sébastien Lecornu unveiled a policy package titled Transmissions 2027, slated for inclusion in the upcoming 2027 draft finance bill. The initiative sets out temporary fiscal measures aimed at encouraging families to transfer wealth to younger generations during donors' lifetimes rather than waiting for posthumous succession. According to briefing documents released by Matignon, French households have accumulated substantial private savings, but wealth transfers frequently occur after heirs have already established their careers, bought homes, and settled down. The government intends for these measures to take effect in 2027 to stimulate domestic economic activity by making funds available when young adults face high initial costs.

France saves a lot, but transmits too late. Yet it is at the moment when one finds housing, starts a family, invests, or starts a business that this money is most useful.

Cash gift exemption ceilings

A central element of the draft plan involves raising the tax-free allowance for family gifts of money. Under existing French tax legislation, an individual can give up to 31,865 euros in cash to a family member without triggering gift tax liability. The Transmissions 2027 plan proposes raising this tax-exempt threshold to 50,000 euros. To qualify for the exemption, the donor must be under 80 years of age, and the recipient must be an adult child, grandchild, or great-grandchild. The prime minister framed this measure on social media platform X as a direct tool to transfer private liquidity to younger adults seeking to enter the property market or fund business ventures.

Flat tax rates for standard donations

The government also outlined a simplified tax regime for classic donations involving full property ownership within the family circle. Under the proposal, the taxable portion of a gift remaining after standard statutory deductions will face a temporary single flat tax rate of 6%, capped at 100,000 euros per donor and adult recipient. For a transfer reaching that 100,000 euro ceiling, the tax owed would drop from the standard 18,200 euros under existing rate schedules to 6,000 euros. Furthermore, Matignon extended the reach of this 6% flat rate to the wider family network, including transmissions from aunts and uncles to nieces and nephews. The plan also includes an incentive for philanthropy, lowering the flat rate from 6% to 5% when the donor makes a simultaneous contribution to a charity providing assistance to disadvantaged groups.

Corporate transfers and budget debate

The temporary donation rules are designed to align with France's existing corporate succession framework. Matignon noted that the Transmissions 2027 plan complements the long-standing Dutreil pact, which reduces tax liabilities when passing family-owned businesses to descendants. The plan also operates alongside the Papin pact, introduced in the second week of September 2026 by Minister Serge Papin to facilitate employee buyouts of enterprises.

Circulating savings earlier to young people and charitable associations, and encouraging business takeovers by employees: this supports economic activity and renews the bond of solidarity across generations.

The proposal establishes a different fiscal approach from left-wing parties that advocate for higher inheritance taxes. The provisions will face formal legislative review when the National Assembly examines the 2027 budget legislation.