Article 751 of the French General Tax Code (CGI) establishes a presumption of ownership that can have significant consequences in the event of inheritance. This tax provision allows the administration to presume that certain assets belong to the deceased, even in the absence of formal proof of ownership. Understanding this mechanism is essential to anticipate tax presumptions and avoid unexpected reassessments.

What is Article 751 of the French General Tax Code concerning inheritance?

Article 751 of the French General Tax Code (CGI) establishes a rebuttable presumption that tangible personal property located in the deceased’s home is deemed to belong to him or her. This simple presumption, which can be rebutted by proof to the contrary, is designed to simplify the work of the tax authorities by establishing a consistent tax base when declaring an estate. It mainly concerns furnishings, works of art, vehicles and other movable property present in the deceased’s home at the time of death. In practice, the tax authorities apply a flat rate of 5% of the gross estate assets if the value of the furniture is not declared or appears insufficient, illustrating the practical application of this presumption.

Scope of the Presumption

The presumption set out in article 751 of the French General Tax Code applies exclusively to tangible assets present in the deceased’s home. However, it does not apply to real estate, bank accounts or securities, which are subject to separate tax rules. Thus, a painting hung on the wall of the home falls within the scope of the presumption, unlike shares held in a securities account, even if the latter are physically kept at the home.

How Presumption works in Estate Planning

Article 751 of the General Tax Code establishes a simple presumption, rebuttable by proof to the contrary. Specifically, the tax authorities apply a lump-sum tax of 5% of the gross estate assets when no detailed inventory is provided, or if the declared value of the furniture appears manifestly insufficient. Heirs can rebut this presumption by providing evidence of the real value of the deceased’s movable property.

Lump-sum valuation and detailed declaration

You can choose between applying the 5% flat-rate tax or making a detailed declaration of movable property. The detailed declaration, drawn up by an auctioneer with a precise inventory of each item, is advantageous when the actual value of the furniture is less than the fixed rate, provided that you can provide the tax authorities with solid proof.

Reversing the presumption of Article 751 of the CGI

As the presumption established by article 751 of the CGI is not irrefutable, you can challenge it by providing evidence that certain assets did not belong to the deceased. Acceptable means of proof include purchase invoices in the name of a third party, certificates of prior donation, loan or deposit contracts, and any document establishing third-party ownership of the property concerned.

Effective protest strategies

To overcome this tax presumption (751 CGI), you need to build up a complete documentary file before filing your tax return: purchase invoices in the name of third parties, certificates of previous donations, loan or deposit contracts. With the support of a tax lawyer, you can identify the legal loopholes in the presumption and present your evidence in the best possible way to the tax authorities.

Tax consequences and risk of adjustment

When the tax authorities deem that the declared value of the furniture is insufficient, they proceed with a tax reinstatement that significantly increases the estate’s tax base. This tax adjustment entails additional inheritance tax calculated according to the applicable progressive scale (up to 45% for direct descendants), plus late payment interest of 0.20% per month, and potentially penalties of up to 80% in the event of deliberate concealment. This can have a considerable impact on the total tax burden for heirs.

Calculation of Additional Inheritance Tax

Under-valuation of movable property has serious tax consequences: the tax authorities apply inheritance tax according to a progressive scale ranging from 5% to 45% for direct heirs, and up to 60% for non-parents, plus late-payment interest of 0.20% per month (i.e. 2.4% per annum) calculated from the deadline for filing the tax return. For example, on the reintegration of €50,000 of undervalued furniture for a direct-line heir (20% bracket), the adjustment amounts to €10,000 in duties, plus around €1,200 in interest after one year, i.e. a total cost of €11,200 for this omission alone.

Relationship with Usufruct and Bare Ownership

Where the deceased held a dismembered right in certain movable property, the presumption of article 751 of the CGI applies only to the share corresponding to his real rights. In the case ofusufruct, only the value of the usufruct or bare ownership held by the deceased is included in the estate assets, calculated according to the tax scale in article 669 of the CGI based on the age of the usufructuary on the day of death. For example, for a usufructuary aged under 61, the usufruct represents 40% of the full ownership, while between 61 and 70, this value rises to 50%, then 60% between 71 and 80. This valuation mechanism also applies to movable property presumed to have belonged to the deceased, making it possible to accurately determine the taxable basis for inheritance tax.

Special cases of surviving spouses

Although the surviving spouse has benefited from total exemption from inheritance tax since 2007, article 751 of the French General Tax Code (CGI) remains fully relevant for determining inheritance assets. This determination remains necessary in the presence of other heirs to establish the estate to be shared and calculate the hereditary reserve. The presumption also plays a decisive role in distinguishing the deceased’s own property from that belonging to the matrimonial regime, in particular to identify what comes under the marital community or belongs to the deceased, thus facilitating the division between the surviving spouse and the other heirs.

Anticipation and Estate Optimization

To minimize the impact of article 751 of the CGI, you need to take a global, anticipatory approach. Rigorous documentation is the cornerstone of any strategy: systematically keep purchase invoices, gift certificates and supporting documents establishing the origin of movable property. At the same time, lifetime gifts are an effective way of reducing estate assets subject to the presumption of inheritance. These early transfers benefit from substantial tax allowances – €100,000 per parent and per child – renewable every fifteen years, thus optimizing the overall tax burden. The support of specialized professionals will help you identify the optimization levers best suited to your asset situation, and secure your steps.

The role of the Specialized Tax Advisor

Given the complexity of article 751 of the CGI and the financial stakes involved in an inheritance, the involvement of a tax lawyer can prove useful in three situations: when the value of movable assets significantly exceeds the 5% lump-sum, when the presumption is challenged and a solid evidential case is required, or when complex assets involve ownership dismemberment or valuable assets. The lawyer’s professional secrecy also guarantees confidentiality in dealings with the tax authorities.

Mastering Presumption to Secure Inheritance

The presumption set out in Article 751 of the General Tax Code is a major tax issue that every taxpayer must anticipate when planning an inheritance. From rigorous documentation of your moveable assets, to wealth optimization strategies and informed challenges to abusive presumptions, you have concrete levers at your disposal to protect your heirs from tax reassessments. Given the complexity of these mechanisms and the considerable financial stakes involved, the support of a specialized tax lawyer is the guarantee of a secure and optimized inheritance. Don’t wait for the opening of the succession to take action: anticipate today to preserve the family patrimony.