The 2025 finance bill is arousing keen interest with a proposed amendment aimed at increasing theinheritance tax allowance. This measure, adopted on October 24 by the deputies of the National Assembly, could have a significant impact on the transmission of heritage between generations. Let us examine in detail the issues and implications of this potential reform.
Towards an increase in the tax allowance to 120,000 euros
The adopted amendment proposes to increase the tax deduction applicable to donations between parents and children from 100,000 to 120 000 euros. This measure aims to facilitate direct line transmission and to promote intergenerational mobility of capital. Concretely, if you leave assets of 150,000 euros to your children, only 30,000 euros would be taxable according to this new amendment.
This proposal is part of a context where France applies high tax rates on inheritances, which can reach 45% for direct heirs. The objective is to stimulate the early transfer of assets and release a share of wealth earlier, thus allowing younger generations to invest and consume more.
It is essential to note that this measure is in addition to the changes announced for 2025 taxes, in particular the revaluation of the progressive scale.
Economic and social implications of the reform
The increase in the inheritance tax allowance could have significant repercussions on the French economy. Here are the main expected effects:
- Stimulating household consumption
- Strengthening the purchasing power of younger generations
- Orientation of capital towards people capable of valorizing it
- Encouragement of the circulation of savings
According to estimates, the overall savings of the French amount to approximately 6 billion eurosor double the public debt. Currently, two thirds of this sum are placed in savings or sitting in bank accounts. The implementation of tax incentive tools could therefore make it possible to mobilize this capital and boost the economy.
On the other hand, it is important to consider the implications for property owners, who could be affected differently by these tax changes.
Financing and uncertainties surrounding the reform
The financing of this increase in the reduction raises questions. The amendment provides for the creation of an additional tax on the excise on tobacco to compensate for lost tax revenue. However, the final adoption of this measure remains uncertain.
The government could indeed resort toarticle 49.3 of the Constitutionallowing it to impose its text and select the amendments to retain. This procedure could call into question the increase in the allowance to 120,000 euros.
| Measure | Benefits | Uncertainties |
|---|---|---|
| Reduction of €120,000 | Facilitation of transmissions | Final adoption |
| Tobacco tax | Financing the reform | Impact on consumers |
Future prospects for wealth transfers
Beyond the increase in the allowance, other measures are envisaged to facilitate the transfer of assets. A second amendment proposes to relax the rules concerning life insurance contracts funded before age 70. This provision would allow up to 152,500 euros to be transferred to a beneficiary of their choice, thus encouraging earlier estate planning.
These reforms are part of a broader desire to modernize wealth taxation in France. They join other initiatives, such as the modifications made to the “Non-professional furnished rental” system, which also impact the management and transfer of assets.
The evolution of these tax measures could redefine intergenerational transmission strategies and influence the investment choices of the French. It remains to be seen whether these proposals will come to fruition and what their long-term effects will be on the French economy and society.
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