Step-children: French MPs favour new €31,865 inheritance tax allowance
Amendment also calls to lighten tax on siblings, nephews and nieces - but to tax wealthy direct heirs more
The current top band of inheritance tax is 45% for direct descendants
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French MPs have voted in favour of a proposal to help step-children who inherit from step-parents, a group that is currently highly taxed in France.
Under existing rules, a step-child who inherits money pays tax at 60% after an allowance of just €1,594, a rule which many people see as out of step with today’s families.
Adopting an amendment to the government’s 2025 budget law, cross-party MPs in the Assemblée nationale’s Finance Commission have voted to raise the allowance for step-children (and step-grandchildren) to €31,865.
They also voted to double the allowances available to brothers, sisters, nephews and nieces.
The amendment also proposes a new 49% tax rate, aimed at the largest inheritances for direct descendants (children and grandchildren), a step up from the current maximum 45%.
The Commission des Finances adopted the measure on October 17, after examining the government's proposed 2025 budget.
Yet, despite the committee’s adoption, the proposals are far from becoming law. They will still need to be voted through in the full Assemblée nationale when it examines the budget bill.
Read also: French inheritance tax: current rules and what reforms are proposed
MPs from the Ensemble pour la république (EPR) had proposed to “modernise the taxation of gifts/inheritances”, and the amendment was tabled by David Amiel, the new leader of the Macron alliance on the committee.
Easing tax to relatives other than direct heirs, as well as new rules helping step-children, were promised by President Macron (who is a step-father himself) before his re-election in 2022.
The proposed measure has two parts.
This would see the doubling of allowances available to brothers and sisters, and nephews and nieces. Similarly, it would create new allowances for step-children and step-grandchildren.
Under current law, recipients in the indirect line only benefit from an allowance of €15,932 for brothers and sisters, and €7,967 for nephews and nieces. This is in contrast to recipients in the direct line (children), who benefit from an allowance of up to €100,000.
Mr Amiel said: “As far as step-children and step-grandchildren are concerned, there are currently no specific allowances for them, so we are proposing to create new allowances, also set at €31,865.”
Read also: Explained: 2024 inheritance tax for family members in France
MPs are planning “at the same time to increase the tax threshold to 49% for inheritances received by direct descendants which are in excess of €3,611,354”.
This equates to creating a new inheritance tax bracket of 49%. Under the current code général des impôts (general tax code), the highest bracket in the inheritance tax scale for direct descendants affects sums “in excess of €1,805,677”. These are currently taxed at 45%.
