Article 751 of the French General Tax Code (CGI) is one of the most feared mechanisms by taxpayers when it comes to inheritance. This provision establishes a presumption of ownership, enabling the tax authorities to reinstate in the estate assets certain assets of which the deceased was not the formal owner. You need to understand this rule if you are to anticipate the tax consequences of inheriting property and avoid unforeseen tax reassessments.

What is article 751 of the CGI?

Article 751 of the French General Tax Code stipulates that “in the absence of proof to the contrary, all movable and immovable property belonging in usufruct to the deceased and in bare ownership to one of his presumptive heirs or descendants is presumed to form part of the estate”. More broadly, this provision establishes a tax presumption that tangible personal property (furniture, vehicles, works of art, jewelry) located in the deceased’s home is deemed to belong to him or her. This presumption applies automatically when the estate is settled, unless you provide proof to the contrary.

For example, a master painting valued at €50,000 found in the deceased’s living room will be presumed to belong to him and included in the estate assets, even if it actually belonged to one of his children. Similarly, jewelry worth €30,000 found in the bedroom will automatically be taxed, unless you can prove that it belonged to a third party.

This presumption, which has existed for several decades and has been confirmed by consistent case law, is designed to combat tax avoidance strategies in which valuable assets are artificially attributed to third parties in order to evade inheritance tax. The tax authorities thus have a powerful tool at their disposal to reconstitute actual inheritance assets and prevent wealth concealment.

Scope of the presumption

Assets covered by article 751 CGI

The presumption applies exclusively to tangible personal property present in the deceased’s principal or secondary residence at the time of death. This includes furniture, vehicles, collections, jewelry and precious metals.

Intangible assets (bank accounts, securities, receivables) are not covered by this presumption. Similarly, assets located outside the deceased’s domicile are not subject to the application of article 751 of the CGI.

Application conditions

For the presumption to apply, three conditions must be met: the property must be a tangible movable, it must be located in the deceased’s residence at the time of death, and no evidence to the contrary must be adduced by the heirs.

The tax authorities do not have to prove that the deceased was the owner. It is up to you, as heir or beneficiary, to prove that the property belonged to a third party.

Assets covered by article 751 CGI

The presumption applies exclusively to tangible personal property present in the deceased’s principal or secondary residence at the time of death. The assets most frequently targeted by tax reassessments are, in order of frequency of dispute: luxury or collector’s vehicles, works of art, jewelry and precious metals, followed by valuable furnishings. Cash found in the home is also subject to this presumption, which justifies particular vigilance regarding its origin and declaration.

Intangible assets (bank accounts, securities, receivables) are not covered by this presumption. Similarly, assets located outside the deceased’s domicile are not subject to the application of article 751 of the CGI.

Please note that in the absence of a detailed inventory of movable property, the tax authorities apply a lump-sum tax of 5% of the gross estate assets. This lump sum represents a minimum basis for taxation, which can be contested if you can prove that the actual value of the furniture is lower, or increased if the tax authorities can prove the existence of assets of significant value (collector’s vehicle estimated at €50,000, work of art worth €100,000, etc.).

Application conditions

For the presumption to apply, three conditions must be met: the property must be a tangible movable, it must be located in the deceased’s residence at the time of death, and no evidence to the contrary must be adduced by the heirs.

The tax authorities do not have to prove that the deceased was the owner. It is up to you, as heir or beneficiary, to prove that the property belonged to a third party.

Mechanism of presumption and burden of proof

Reversal of probationary period

Article 751 of the CGI reverses the burden of proof. Contrary to the general principle whereby the administration must prove the existence of a taxable item, here it is up to the taxpayer to demonstrate that certain assets were not part of the deceased’s patrimony. This presumption applies automatically, even if the deceased never declared the property in question in previous tax returns.

This mechanism places heirs in a defensive position, with potentially heavy financial consequences. For example, if a vehicle worth €40,000 is present at the deceased’s home, the tax authorities may reinstate it in the estate assets and claim between €8,000 (for a child at a rate of 20%) and €18,000 (for a nephew at a rate of 45%) in additional inheritance tax. You have 30 days in which to formulate your observations and produce evidence.

To make it easier to contest a claim later on, you need to build up a convincing file even before the death: keep original purchase invoices in the name of the true owner, notarized donation certificates, signed and dated loan or deposit contracts, and bank statements showing who financed the acquisition. This preventive documentation is your best protection against questionable tax reintegration.

Admissible means of proof

To challenge the presumption, you need to provide evidence that the property in the deceased’s home belonged to a third party. The probative value of such evidence varies considerably according to its nature.

Hierarchy of proofs according to their probative value :

Authentic deeds (notarized donations, bills of sale) are the most solid proof. They benefit from a presumption of validity that is difficult for the tax authorities to overturn. Next come written proofs: purchase invoices in the name of another person, loan or deposit certificates, bank statements demonstrating third-party financing, or contracts establishing a right of use. To be fully effective, these documents must be contemporaneous with the acquisition of the property.

Testimonials and detailed attestations have less probative value. In a ruling dated February 8, 2017 (n°394315), the Conseil d’Etat specified that simple declarations by family members, not corroborated by objective elements, are generally not sufficient to rebut the presumption of article 751 of the CGI.

Indirect evidence such as bank statements is admitted by case law, but under strict conditions: it must demonstrate a coherent and traceable financial flow between the third party and the acquisition of the property. A decision by the Paris Administrative Court of Appeal on June 15, 2020, upheld the claim of an heir who produced bank statements proving that his mother had financed the entire purchase of a vehicle found at the deceased’s home, accompanied by the vehicle registration document in her name.

Practical recommendation: keep all these documents for at least 10 years after acquiring the property, or even until death if you are housing property belonging to a third party. The more complete, coherent and up-to-date your documentation, the greater your chances of success with the authorities.

Special cases: usufruct and dismemberment

The application of article 751 of the CGI raises specific difficulties in the case of dismemberment of ownership. Where the deceased was usufructuary of movable property, the presumption may apply to the value of the usufruct, calculated according to the tax scale in article 669 of the CGI.

Calculating the value of the usufruct according to the tax scale

The tax scale determines the value of the usufruct according to the age of the usufructuary at the time of death. The older the usufructuary, the lower the value of the usufruct. Here are the main thresholds:

• Under 21 years of age: 90% of the full value of the property
• From age 41 to 50: 60%.
• From age 61 to 70: 40% of sales
• From age 71 to 80: 30%.
• From 81 to 90 years: 20%.
• Over 91: 10% of the total

Example: A 70-year-old deceased was usufructuary of furniture and works of art in his home, worth a total of €100,000. The usufruct represents 40% of this value, i.e. €40,000, which will be added to the estate assets and subject to inheritance tax. Bare ownership (€60,000) is not affected if it already belongs to the heirs.

Situations in which the presumption can be waived

In several specific situations, ownership dismemberment can effectively neutralize the application of article 751 of the CGI. Firstly, when the dismemberment results from a prior gift formalized by notarial deed, the bare-ownership assets are not presumed to belong to the deceased usufructuary, provided that the gift was made sufficiently long ago (generally at least 3 months before the death).

Secondly, if you have documentary evidence establishing that the property belongs in full ownership to a third party who simply made it available to the deceased, the presumption can be rebutted. Such evidence includes purchase invoices in the name of the bare owner, attestations of previous gifts, or bank statements showing financing by the bare owner.

Thirdly, when the dismemberment results from a previous succession (the deceased having inherited the usufruct from a previous deceased), the administration cannot presume that the property belongs in full ownership to the second deceased.

Risks of abuse of rights and precautions

The tax authorities are keeping a particularly close eye on dismemberments carried out shortly before death. A dismemberment carried out less than three months before death is liable to requalification as an abuse of rights, as the administration may consider it to be a maneuver designed solely to evade tax.

To ensure the security of a dismemberment, it is advisable to respect a minimum period of one year between the transaction and death, and above all to justify the transaction on non-tax grounds (family organization, anticipation of inheritance in a context of stable health). Formalizing the transaction in a notarial deed and keeping all supporting documents are essential guarantees.

In the case of assets of significant value, it is essential to consult a tax lawyer before carrying out any dismemberment operation, in order to avoid subsequent disputes and optimize the transfer in compliance with the law.

Strategies for avoiding tax reintegration

Preventive documentation

The best defense against a tax reinstatement is to organize preventive documentation. Systematically keep purchase invoices, donation receipts, loan agreements and any other documents proving ownership of goods in the home.

Draw up regular inventories clearly distinguishing between assets belonging to the deceased and those belonging to other household members. This practice considerably facilitates estate settlement.

Anticipated wealth structuring

Careful estate planning can limit exposure to article 751 of the CGI. Regular gifts with reservation of usufruct, properly formalized, are an effective solution for passing on bare ownership while retaining enjoyment of the property.

The involvement of a lawyer specializing in estate taxation is essential to ensure the security of these operations and avoid subsequent challenges from the tax authorities.

Preventive documentation

The best defense against a tax reinstatement is to organize preventive documentation. Systematically keep purchase invoices, donation receipts, loan agreements and any other documents proving ownership of goods in the home.

Draw up regular inventories clearly distinguishing between assets belonging to the deceased and those belonging to other household members. This practice considerably facilitates estate settlement.

Anticipated wealth structuring

Careful estate planning can limit exposure to article 751 of the CGI. Regular gifts with reservation of usufruct, properly formalized, are an effective solution for passing on bare ownership while retaining enjoyment of the property.

The involvement of a lawyer specializing in estate taxation is essential to ensure the security of these operations and avoid subsequent challenges from the tax authorities.

Litigation and appeals against the application of article 751

Dispute procedure

If the tax authorities apply the presumption set out in article 751 of the CGI and make an adjustment, you have several avenues of appeal. The first step is to formulate observations within 30 days of the rectification proposal.

You can then refer the matter to the departmental conciliation commission, and if no agreement is reached, take your case to the administrative court. The quality of your arguments and evidence will determine the outcome of the dispute.

Recent case law

The courts adopt a nuanced approach to article 751 of the CGI. They require the administration to justify the existence and value of assets presumed to belong to the deceased, while imposing a rigorous burden of proof on the heirs.

Several recent rulings have allowed the presumption to be challenged when heirs produce converging evidence of a third party’s ownership, even in the absence of a single piece of formal evidence. This evolution in case law offers increased opportunities for defense.

Dispute procedure

If the tax authorities apply the presumption set out in article 751 of the CGI and make an adjustment, you have several avenues of appeal. The first step is to formulate observations within 30 days of the rectification proposal.

You can then refer the matter to the departmental conciliation commission, and if no agreement is reached, take your case to the administrative court. The quality of your arguments and evidence will determine the outcome of the dispute.

Recent case law

Case law relating to article 751 of the CGI has evolved significantly in recent years. In a ruling handed down on February 8, 2022 (CAA de Paris, n°20PA02156), the Administrative Court of Appeal confirmed that the administration must justify the material existence of assets presumed to belong to the deceased, and not simply invoke the presumption. This decision illustrates increased control over the proportionality of tax measures.

In its decision of December 15, 2021 (n°445328), the Conseil d’Etat clarified the criteria for assessing evidence to the contrary. The judges allowed the presumption to be challenged when the heirs produced a body of corroborating evidence: bank statements demonstrating financing by a third party, attestations from family members, and the temporal consistency of evidential elements. The Court thus validated the principle that evidence can be derived from a set of converging elements, even in the absence of a formal title deed.

More recently, the Lyon CAA (ruling of June 23, 2023, no. 22LY01847) adopted a position favorable to taxpayers with regard to commonly used goods. It ruled that in the case of furnishings of modest value, the tax authorities should provide concrete evidence to justify their reinstatement, particularly where several people were living in the deceased’s home. This case law reflects a gradual relaxation of the presumption, with the courts now requiring the administration to take a more rigorous approach in applying the presumption, while maintaining a substantial burden of proof for contesting heirs.

Practical implications and recommendations

Article 751 of the French General Tax Code represents a considerable financial challenge: according to data provided by the tax authorities, this presumption is applied to between 15% and 20% of inheritances, with an average reinstatement amount of between €35,000 and €80,000, depending on the composition of the movable assets. The resulting adjustments generate additional inheritance tax of between 15,000 and 48,000 euros on average.

The cost of tax litigation under article 751 of the CGI is particularly high. Litigation before the administrative court generally takes 18 to 36 months, with legal fees ranging from 8,000 to 25,000 euros, depending on the complexity of the case. Conversely, preventive assistance from a tax lawyer costs an average of €2,500 to €5,000, giving a particularly favorable cost-benefit ratio.

Faced with these financial challenges, three preventive actions are essential: set up a documentary traceability file for each asset worth over 5,000 euros in your home, formalize any donation with usufruct reserve in a notarial deed to provide legal certainty for transactions, and carry out a wealth audit every 3 to 5 years to identify areas of tax risk.

If your personal assets exceed €100,000, or if you own works of art, collectors’ items or prestige vehicles, the services of a specialist tax lawyer are essential. This professional will help you to optimize the structuring of your assets and defend you in the event of a tax audit, with a success rate in litigation of around 60% when preventive documentation has been correctly drawn up.