Inheritance age rising in France

In France, the average age at which people inherit from their parents has increased significantly over the decades. In the 1950s and 1960s, inheritance often occurred around age 40, linked to major life events like buying a home or starting a business. Today, the average age is nearly 60, and it is predicted to rise to 62 by 2035 to 2040, according to a study by the OFCE.

Proposed tax changes for family gifts

The French government, led by Minister Sebastien Lecornu, is considering tax reforms to address the shifting inheritance landscape. Article 4 of the draft finance bill, submitted on October 1, proposes a six-month period from January to June 2027 where the tax-free threshold for family gifts would increase from 31,865 to 50,000 euros. Gifts above this amount would be taxed at 6 percent, up to 100,000 euros per donor and beneficiary.

Wealth distribution and targeted incentives

According to the Bank of France, retirees hold more than 37 percent of household wealth in France, but this wealth is mostly held in life insurance, savings accounts, and real estate. The government aims to redirect up to 30 billion euros toward younger adults, typically between 25 and 40 years old, who are more likely to borrow, settle down, or start businesses. The proposed tax changes are more focused than a September announcement, with the 6 percent rate applying only to beneficiaries under 50.

Potential impact on families and wealth transfers

For some families, the proposed changes could significantly reduce the tax burden on inheritance. For example, an uncle without descendants could give his nephew money at a 6 percent tax rate instead of the current 55 percent. Wealthy families could pass on larger sums at a reduced rate, avoiding a tax scale that could reach 45 percent upon death. Wealth management professionals expect a surge in such transactions in early 2027, similar to a 2004 policy that was later extended and made permanent.

Tension between retirees and the state

The proposed changes create a paradox, as the same budget requires about 5.5 billion euros in savings from retirees, often through reduced pension increases. While the government aims to encourage the movement of wealth rather than its accumulation, the measure primarily benefits families with assets to transfer. Some of the money given in 2027 will later escape inheritance taxes, meaning the state is trading future revenue for immediate economic activity. The measure is not yet finalized, and Parliament may adjust or eliminate it. Meanwhile, the question for older generations is no longer when they will inherit, but when they will decide to pass on their wealth.