Gift Tax Allowances Europe 2026

Germany gift tax planning example: each parent can give each child €400,000 every 10 years free of Schenkungsteuer (gift tax) / Erbschaftsteuer (inheritance tax) — the Freibetrag applies equally to lifetime gifts and inheritance, renewing completely every 10 years. Family of 2 parents + 3 children: over 10 years: 2 parents × 3 children × €400,000 = €2,400,000 transferred tax-free. Over 20 years: €4,800,000 tax-free. Over 30 years: €7,200,000 tax-free. Strategy: parents start gifting at age 55 (children approximately 25-30); gift €400,000 to each child; wait 10 years; gift again; repeat. The Freibetrag is cumulative for the 10-year window — giving €100,000 each year for 4 years uses the same €400,000 as one lump sum; the clock resets on the 10th anniversary of the first gift (not on an annual basis). Business succession: Betriebsvermögen (business assets) Freibetrag extends to €26,000,000 for qualifying business transfers — Germany is specifically designed to facilitate family business succession without forcing sales to pay tax.

UK PET mechanics: under IHTA 1984 Section 3A, any gift of cash, property, or assets is a 'Potentially Exempt Transfer' — potentially exempt because it becomes fully exempt if the donor survives 7 years. During the 7-year period: PET counts as a 'failed PET' if donor dies; included in cumulative chargeable transfers for IHT calculation; subject to taper relief if death is between 3-7 years (charge reduces proportionally). After 7 years: completely outside the estate; no IHT regardless of amount. No registration required: unlike some countries' gift regimes, UK PETs do not need to be formally registered or declared at the time of the gift (though documentation is strongly recommended for evidence). No cap: there is no maximum to PETs — a billionaire can give £100,000,000 to their children and it is IHT-free if they survive 7 years. UK gift planning strategy: start PET programme as early as possible; use the 7-year rule to plan multi-year gifting; combine with annual £3,000 exemption (immediately outside estate without the 7-year wait); use trusts to manage larger transfers; document all gifts carefully with dates and values. Seven-year life insurance: a term life policy covering the potential IHT on a PET (paid for by the donor) protects beneficiaries if donor dies within 7 years — this is called 'gift inter vivos' insurance and is a standard component of UK estate planning.

French donation abattement mechanics: each parent can give each child €100,000 every 15 years free of droits de donation (gift tax). The 15-year window: if a parent gives €100,000 to a child on Day 1, the abattement is fully used; if the parent gives again 14 years later: the gift is fully taxable (5-45% progressive); if the parent gives again in year 16: full €100,000 abattement available again. Critical interaction with inheritance: the abattement is shared — if parent gives €60,000 during lifetime, the child's abattement at the parent's death is reduced to €40,000. Early gifting strategy (parent age 55): two parents give €100,000 each to each of three children = €600,000 total at year 1; wait 15 years (parent age 70); give again €600,000 at year 16; at parent's death (age 85): full €600,000 abattement available again. Total transferred tax-free: €1,800,000 over 30 years. Late start (parent age 75): one 15-year cycle before typical life expectancy; maximum one additional tax-free transfer to each child. The French planning imperative: start gifting early to maximise 15-year cycle renewals; combined with assurance-vie (separate €152,500 tax-free per beneficiary for pre-70 premiums), France's wealthy families can structure substantial estate transfers.