The Finance Act for 2026, which would normally have been adopted in December 2025, was ultimately passed in 2026, with entry into force on 21 February 2026. A number of concerns regarding potential changes to rules applicable in an international context have, fortunately, been dispelled.
We set out below the two main regimes for which amendments had been contemplated:
1st measure: criteria for territoriality of tax in relation to gifts and inheritance
Under the current rules, French gift or inheritance tax applies only if one of the following three criteria is met:
- The donor or the deceased is a French tax resident (Article 750 ter, 1° of the French Tax Code);
- The transferred asset is located in France or deemed to be a French asset (Article 750 ter, 2° of the French Tax Code);
- The donee, heir or legatee is a French tax resident at the time of the transfer and has been resident in France for at least 6 years during the previous 10 years.
Certain proposals aimed to extend the scope of taxation, notably by removing the 6-year residence requirement. This would have led to taxation in France whenever the beneficiary is a French tax resident at the time of the transfer, even if such residence were only temporary.
This proposal was not retained, and the current regime therefore remains unchanged.
2nd measure: Exit Tax
When a taxpayer transfers their residence outside France, they may be subject to exit tax on unrealised capital gains relating to shares and similar securities, where the value exceeds €800,000.
- The tax becomes payable if the shares are sold within 2 years (value below €2,570,000) or 5 years (value above €2,570,000) after departure;
- If the disposal occurs after these periods, no French exit tax is due.
Some parliamentarians proposed to extend these time limits to 15 years, in line with the pre-2019 regime, while the government considered an extension to 8 years.
No extension was ultimately adopted, meaning that the current system remains unchanged.
27 March 2026
By Pascal Julien Saint-Amand / Anaïs Fiquet, Althémis Paris (France)
