Renouncing an inheritance in favour of your children: skipping a generation and its tax cost

How and when do you renounce?

A renunciation “is not presumed”. To be enforceable against third parties, it is sent or lodged with the court in whose district the estate was opened, or made before a notary, who sends a copy to the court within one month (Civil Code, art. 804).

• Not before death. The option cannot be exercised before the estate is opened, not even by marriage contract (art. 770). The advance waiver of the action to reduce excessive gifts (art. 929) is a different mechanism, which does not pass your share to your children.
• Time limits. You cannot be forced to choose for four months; after that, a creditor, a co-heir, a next-in-line heir or the State may serve formal notice on you to decide, and you then have two months, failing which you are deemed to accept outright (art. 771 and 772). Without formal notice, the option lapses after ten years and a silent heir is then deemed to have renounced (art. 780). Since the inheritance tax return is due within six months of a death in mainland France (CGI, art. 641), the decision is made before then.
• Do nothing that amounts to acceptance. Tacit acceptance results from any act that “necessarily implies” the intention to accept (art. 782). Paying the funeral costs or the deceased's taxes remains a protective act (art. 784); selling an estate asset or assigning your rights counts as acceptance (art. 782 and 783).
• An almost final decision. You may withdraw your renunciation by accepting outright, as long as the limitation period has not run, but only if the estate has not already been accepted by another heir (art. 807). Once your children have accepted, there is no way back.
• Your children must accept. If they are minors, their legal administrator cannot accept outright on their behalf without the authorisation of the guardianship judge (art. 387-1, 5°); acceptance limited to the net assets remains available.

Outright or transfer renunciation: what difference for tax?

The French tax authorities' doctrine (BOFiP) treats the two forms in opposite ways (BOI-ENR-DMTG-10-50-80, § 250 to 300).

• Outright renunciation. The tax due by your descendants is “calculated as if they had been the direct beneficiaries of the estate”, with no double computation (§ 270). They apply the direct-line scale, from 5% to 45% (CGI, art. 777, table I), and the €100,000 allowance granted “on the share of each child living or represented following predecease or renunciation”, divided between the representatives (CGI, art. 779, I). If the division leaves each of them less than €1,594, that amount applies instead (CGI, art. 788, IV; § 270).
• Gifts from the deceased to the renouncing heir count. To determine the allowance still available, the tax authorities take into account the allowances the renouncing heir used on gifts received from the same deceased in the last fifteen years (CGI, art. 784; BOI-ENR-DMTG-10-50-50, § 110).
• Transfer renunciation. Made “in favour of a specific person who accepts it”, it triggers two transfers: you pay inheritance tax on your share, then the beneficiary pays gift tax (§ 300). This mirrors article 783 of the Civil Code: a renunciation, even gratuitous, in favour of one or more specific heirs, or made for consideration, amounts to outright acceptance. A renunciation “in favour of” a specific person that does not in fact change the statutory devolution is still treated as an outright renunciation (§ 300).
• The abuse-of-law limit. The tax authorities have treated as an abuse of law a double renunciation organised to tax at the direct-line rate what should have been taxed between an uncle and his nephews and nieces (ruling no. 2008/17 of 22 July 2008, reproduced at § 290). See our page on abuse of law in French tax.

Compare the tax: renounce, or accept and then give

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What happens to gifts already received, and to the only child?

Renouncing does not take away the gifts you received from the deceased: you may keep them up to the disposable portion, unless the donor expressly required them to be brought back into the estate in the event of renunciation, in which case you compensate the accepting heirs for any excess (Civil Code, art. 845).

• When your children represent you. Unless the donor provided otherwise, the gifts made to you are charged against the reserved portion (forced heirship share) that would have been yours (art. 754, para. 3), and a renouncing child counts in calculating the reserved portion if represented or bound to bring back a gift (art. 913, para. 2). Your children, inheriting by representation, bring back what was given to you (art. 848).
• When you are an only child. According to the tax authorities, representation requires several branches; your children then inherit in their own right. The authorities nevertheless grant them the €100,000 allowance that would have been yours (BOI-ENR-DMTG-10-50-20, § 50; BOI-ENR-DMTG-10-50-80, § 330; ministerial answer Le Nay no. 86052, JO AN of 23 November 2010, p. 12822).
• The specific risk for an only child who has received gifts. Inheriting in their own right, your children do not bring back what was given to you (art. 848); they are, however, reserved heirs, descendants being included under the term “children” (art. 913-1). You keep your gift only up to the disposable portion (art. 845); if it exceeds that portion, the excess is exposed to an action for reduction by your own children. This needs to be worked out, figures in hand, before renouncing.

What the courts have decided

• Tax representation follows the statutory devolution. Nephews claimed the brothers-and-sisters rate by representation of a sister disinherited by will. The Court of cassation quashed the judgment that had granted it: the tax rules apply to representatives “only if they inherit through the statutory devolution”, and the law does not provide for the representation of a disinherited heir (Cass. 1re civ., 17 April 2019, no. 17-11.508, published in the Bulletin).
• A renouncing heir has never been an heir, with all that follows. The children of a donee, who had died first, renounced her estate; the gift contained a reversion clause in case of death without issue. The Court held that a renouncing descendant cannot block the reversion, and the assets returned to the donor (Cass. 1re civ., 16 September 2014, no. 13-16.164, published in the Bulletin).
• A renunciation for a price is acceptance. An heir had waived, in a settlement, the legacy of the disposable portion left to her by her mother. Since it came with consideration that amounted to its price, the waiver implied acceptance, and the legacy remained taxable (Cass. com., 26 June 2012, no. 11-21.160, published in the Bulletin, decided under former article 780 of the Civil Code, whose rule is now in article 783).