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World

France looks to ease family gifting rules to reduce savings glut

  • Like many countries, France has seen a surge in savings during the coronavirus crisis due to various restrictions on movement that prevented people from spending in bars, restaurants, cultural venues and on trips.
  • The central bank estimated last month that households had built savings in excess of what could be expected under normal circumstances of up 120 billion euros ($144.4 billion) last year.
Updated 04 Mar 2021

PARIS: French Finance Minister Bruno Le Maire said on Thursday he would make proposals to encourage the transfer of wealth within families to help young people whom he said had suffered most during the coronavirus crisis.

Like many countries, France has seen a surge in savings during the coronavirus crisis due to various restrictions on movement that prevented people from spending in bars, restaurants, cultural venues and on trips.

The central bank estimated last month that households had built savings in excess of what could be expected under normal circumstances of up 120 billion euros ($144.4 billion) last year, which the government is eager to see steered into the economy to help fuel a post-COVID-19 recovery.

Le Maire rejected calls from some politicians on the left for a tax increase on savings as a way to get people to draw down their surplus savings and said he was looking instead at how to boost intergenerational family donations.

"Those for whom this crisis was the most unfair, the hardest was the youths. They had it worst because they were deprived of everything that's normal for someone when they're 18, 19 years old," Le Maire said in an interview with website Politico.

"So thinking about the possibility of making it easier for parents or grand-parents to pass down money to these generations is an interesting option on which I will make proposals," he added.

Currently each parent can give each child every 15 years up to 100,000 euros without paying gift tax and grandparents can give 31,865 on the same conditions.

Lawmakers tried to increase the limit last year when the 2021 budget was going through parliament but the government shot the amendment down.