Waiver of Inheritance and Tax Recall of Prior Gifts

Waiver of Inheritance and Tax Recall of Prior Gifts

On 8 July 2026, the Commercial Chamber of the Court of Cassation issued a ruling on the liquidation of gratuitous transfer duties. (Cass. com., 8 July 2026, No. 25-13.219)

The Court of Cassation establishes the principle that gifts previously made by the deceased to a waiving heir cannot be set up against that heir’s representatives for the purposes of applying the progressive scale under Article 777 of the French General Tax Code.

The Court of Cassation requires a clear distinction between the representative heir and the waiving predecessor. Representatives are taxed personally, based on their own degree of kinship with the deceased, and not on the degree of kinship of the waiving predecessor.

For the purposes of applying the progressive scale under Article 777 of the CGI, only gifts that the representatives personally received from the deceased are taken into account. Gifts received by the waiving predecessor are not fiscally added back with respect to the representatives.

For practitioners, the ruling of 8 July 2026 calls for greater vigilance in drafting estate tax returns. Going forward, it is necessary to distinguish, for each heir or representative, between gifts they personally received from the deceased and those received by the predecessor they represent. This distinction is useful for calculating the duties owed and essential for challenging any tax reassessments that fail to observe this rule.

Ultimately, the ruling of 8 July 2026 confines the personal scope of the tax recall strictly to the deceased’s donees, heirs, and legatees.

For wealth managers, this solution, grounded in a strict interpretation of the relevant provisions, provides greater certainty for family strategies faced with an inheritance waiver, and offers stronger legal protection to representatives, who will not be tax-penalized for gifts received by the predecessor who waived their inheritance.