What is a simple donation?
Definition of the Civil Code
According to article 894 of the Civil Code, the donation is a “ act by which the donor actually and irrevocably divests himself of the thing given in favor of the donee who accepts it “. In fact, a person, called the donor, graciously transfers property during his or her lifetime to another person, called the donee (child, grandchild, spouse, other family member, person outside the family circle, etc.). This may be movable property (money, securities, objects, etc.) or real estate.
Example of a donation during one’s lifetime to one’s child
It often happens that parents want to help their child purchase their first home. In this context, they have the possibility of making a simple donation of a sum of money, or even accommodation.
What are the two types of simple donation?
Simple donation can take two main forms: donation in advancement of inheritance and preciputary donation.
Donation in advancement of inheritance share
The donation in advance of inheritance consists of transmitting property to a reserved heir (child, grandchild) in advance of his or her future share of inheritance. This donation is reportable to the estate. This means that at the time of the donor’s death, the value of the donated property is reintegrated into the estate in order to guarantee equitable distribution among the heirs.
Preciputal donation
The preciputary donation allows property to be transmitted to an heir or a third party without this donation being reported to the estate. It is therefore not reportable and is deducted from the available portion (part of the assets that the donor can freely allocate without prejudice to the hereditary reserve).
What is the difference between sharing donation and simple donation?
The donation-sharing is a particular type of donation which allows you to distribute all or part of your assets between your presumptive heirs (children, grandchildren) during your lifetime. Unlike a simple donation, the value of the property is fixed on the day of the donation. It allows you to distribute your assets equitably and definitively between your heirs, thus reducing the risk of conflicts. The sharing donation requires a notarial deed.
How to make a simple donation?
Making a simple donation depends on the nature of the property.
Conditions to be met
To be able to make a donation, the donor must meet three conditions:
- Be sane
- Be an adult or anticipated minor
- Have the legal capacity to manage your property
Declaration of the recipient of manual donations and sums of money on the tax website
If the donation concerns movable property such as money or an object (jewelry, painting, car, etc.), it is possible to make a manual donation, from hand to hand. The donee must make a declaration to the tax authorities of the donation he received. We then speak of revelation. He must estimate the value of the donated property to be able to know the amount of gift tax. The declaration is made online from your personal tax space.
The donee can benefit from tax reductions. They apply to donations made by the same donor to the same donee over a period of 15 years. The amount varies depending on the relationship. For example, each parent can donate up to 100,000 euros per child without there being any gift tax to pay. A couple can therefore transmit to each of their children 200,000 euros in exemption from duties.
To note : a gift (birthday, wedding, Christmas, etc.) is not considered a manual gift, but a customary gift. No formalities need to be carried out in this case.
Drafting a mandatory notarial deed for the donation of real estate
Regarding the donation of real estate, the drawing up of a notarial deed is obligatory. The donor must therefore call upon a notary who will be responsible for drawing up the deed of donation, registering it with the tax administration and paying the corresponding duties.
What are the notary fees for a donation?
A donation by notarial deed involves notary fees. Their amounts vary depending on the full ownership value of the donated goods. Here is the table of fees depending on the type of donation:
Can a simple donation be carried over to the estate?
The donation in advance of inheritance is reportable to the estate. In this context, the value of the donated property is taken into account for the calculation of the share of inheritance due to the donee. On the other hand, regarding the preciputary donation, no connection to the inheritance is made. The value of the property is therefore excluded in the calculation of the donee’s share of inheritance.
What are the advantages and disadvantages of simple donation?
Tax reductions
Simple donation has several advantages:
- It allows you to anticipate the transmission of your personal and real estate assets during your lifetime.
- It offers tax advantages which take the form of reductions applicable depending on the relationship.
These reductions are renewable every 15 years. Between parents and children, each parent can give up to 100,000 euros to each of their children without gift tax. Between grandparents and grandchildren: the reduction is 31,865 euros per grandparent and per grandchild.
Another advantage is that a simple donation does not always require the use of a notary.
The donation is irrevocable
On the other hand, once made, the donation is, barring exceptions, irrevocable. It can also sometimes lead to inequalities between heirs.
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