Four changes are provided for gift and inheritance taxes in order to reverse the reductions enacted by the previous Parliament.

The Act provides lowering the personal allowance applicable to gifts and inheritances for each parents’ and child’s share from 159,325 euros to 100,000 euros.

Increased from six to ten years for certain gratuitous transfers in the July 2011 reform, the tax adjustment statute of limitations period for gifts granted among the same individuals will be modified again.  Indeed, there is a provision to lengthen the period generally to 15 years for gifts, gifts-sharing between generations, transfers of shares in farm land groups, and rural property under long-term leases.  This new statute of limitations period will also be applicable to renewal of the exemption period for family gifts of money.

This new reform of the tax adjustment statute of limitations period will not benefit from the graduation mechanism as provided by the July 2011 Amending Finance Act.

Lastly, there is a provision to cancel all annual pegging of the rates, allowances and limits applicable to the gratuitous transfer taxes based on the annual increase of the income tax schedule.

These provisions will enter into force on the date on which the act is published, with the exception of the cancellation of the pegging, which will enter into force on January 1, 2013.