A couple aged 55 owns a rental apartment and a portfolio of shares in a family real estate investment company (SCI). In the event of death without prior donation, their two children will pay inheritance tax calculated on the full ownership, without optimizing the usufruct scale. The entire difference lies in the timing of the transfer.
Making a donation before the age of 61 allows the value of the usufruct to be fixed at a low level in the tax scale, which mechanically increases the share transmitted in bare ownership under the allowance. Waiting a few more years shifts the balance against both the donor and the donees.
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Tax scale of usufruct: the 61-year threshold changes everything
The legal scale of usufruct operates by age brackets. Before 61, the value of usufruct is estimated at 50% of full ownership, meaning that the bare ownership transmitted only represents the other half. Once you cross the 61-year mark, usufruct drops to 40%: bare ownership rises to 60%, thus increasing the taxable base.
To understand why to make a donation before 61, one just needs to reason about a real estate asset. The lower the value of the bare ownership transmitted in tax terms, the more one stays within the limits of legal allowances without triggering any tax. This mechanism works for both a direct apartment and for shares in an SCI.
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Notaries have also observed a marked increase in donations-sharing before the ages of 60-62, driven by this scale logic. This trend is documented by the Court of Auditors in its report on inheritance tax, published on October 11, 2023, which highlights the rise of very early transmissions between the ages of 40 and 60.
Donation with dismemberment before 61: a concrete mechanism on a real estate asset
Let’s take a real estate situation. One owns a property and wants to pass it on to their children while continuing to occupy it or receive rent. Dismemberment of ownership separates usufruct and bare ownership, and the donor retains the use of the property until their death.
When the donor is under 61, the transmitted bare ownership is valued at 50% of the property’s value. If the same donor waits until they are 61 years old, this bare ownership rises to 60%. On a significant real estate asset, the difference in taxable base is not negligible.
What it changes for donation rights
Each child benefits from a renewable allowance every 15 years on donations received from each parent. By transmitting a lower value in bare ownership, one maximizes the chances of staying under the allowance ceiling. The result: zero donation tax to pay if the arrangement is calibrated correctly.
The gain doesn’t stop there. Upon the donor’s death, the usufruct automatically extinguishes, and the children recover full ownership without any additional tax. The reconstitution of full ownership is tax-neutral.
Allowances and renewal: why timing matters as much as the amount
We often think in terms of amount, rarely in terms of timing. The 15-year period between two donations benefiting from allowances requires anticipation. A 55-year-old donor who transfers today will be able, at 70, to make a second donation with new allowances.
- A first donation before 61 uses the most favorable usufruct scale and consumes a first allowance per child.
- A second donation 15 years later benefits from the renewal of allowances, even if the usufruct scale is then less advantageous.
- By combining the two operations, one can transmit a substantial estate with very reduced, or even zero, rights.
Starting early allows for two cycles of allowances over an active life, whereas a first gift at 65 leaves only one cycle before an advanced age. The returns vary on this point depending on the composition of the estate, but the timing logic remains valid for the vast majority of situations.
Online declaration of gifts and anticipation: what changes in practice
Since the generalization of online declaration on impots.gouv.fr, including for manual and family gifts exempt from tax, the tax administration has increased traceability. Declaring donations in a planned framework avoids alert signals related to a late transmission peak.
Spreading operations between 45 and 60 years, rather than concentrating a large donation at 68, provides a coherent reading for the tax authorities. Each gift is declared, dated, and fits into a visible strategy. The General Directorate of Public Finances confirmed this orientation in the instruction BOFiP BOI-ENR-DMTG-20-10, updated in June 2024.
Family SCI and wealth holding: vehicles suited for early donation
The Court of Auditors has identified a clear trend towards transmissions via family SCIs or wealth holdings among donors aged 40 to 60. These structures allow for the transmission of shares with a valuation discount, in addition to the dismemberment mechanism.
One can thus give the bare ownership of SCI shares to their children while retaining usufruct (and therefore rental income). The combination of share discount and usufruct scale before 61 significantly reduces the taxable base.
Waiting until 65 or 70 to organize the transmission of one’s estate means losing two fiscal levers simultaneously: a favorable usufruct scale and the possibility of chaining two cycles of allowances. Donating before 61 is not an optimization gadget; it is the foundation of a transmission that preserves the interests of each child without enriching the public treasury more than necessary.