Almost every year, polling institutes question the French on inheritance taxation. Apart from a few percentages, the results are unequivocal: a large majority of participants are in favor of their reduction. According to the latest study Odexa for the magazine Challenges of April 25, 84% of respondents want parents to transmit “as much heritage as possible for their children” and 77% find that this tax is unjustified. In 2022, a survey ofOpinionway-Les Echos concluded that 81% of French people were against an increase in inheritance taxes. This tax is much more unpopular than the others, according to the study.
How many people receive large inheritances?
This rejection of the inheritance tax tax is paradoxical when we note that it concerns a minority of French taxpayers. Indeed, a person can receive an inheritance without being subject to this tax, because reductions on the sums transferred apply depending on the relationship between the deceased and the heir.
The amount of the reduction reaches 100,000 euros for a direct line inheritance. For example, if a parent transmits 150,000 euros of assets to their child, taxation will only be on 50,000 euros. The scale is then progressivewith tax brackets varying between 5% and 45% depending on the amounts.
According to INSEE, in 2018, only 14.6% of parents transmitted inheritances greater than 100,000 euros and were therefore subject to inheritance tax.
The amount of the reductions varies depending on the parental relationship: it is 15,932 euros for a brother or a sister and 7,967 euros for a nephew or niece. The scales are also higher (35 to 45% for brothers and sisters, up to 55% for relatives in 4e degree, 60% in other cases).
According to INSEE, of all inheritances transmitted (grandparents, nephews, etc.), the vast majority (38.7%) do not exceed 8,000 euros, and only 12.9% exceed 100,000 euros. .
How to explain this unpopularity?
Why so much aversion to increasing this tax which ultimately only concerns a minority of French people? L‘Observatory of inequalitiesin a 2022 study, believes that the wording of the questions could guide the opinion of respondents: ” On the one hand, [il y a] a simple wording [de la question] who speaks to the heart, give to his children. On the other, an abstract economic reasoning which is not obvious. »
The economist Guillaume Allègre, who published a study for the French Observatory of Economic Conditions entitled “Inheritance taxes: why are economists not listened to? », puts forward another explanation: “Individuals are poorly aware of the characteristics of the inheritance tax and overestimate its weight and the probability of being subject to this tax themselves. (…) However, this explanation is not sufficient: the progressive tax is unpopular with all social categories,” he added in his analysis published in 2022.
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In the latest Odexa study, one of the questions tells respondents that “the majority of inheritances are tax exempt”. However, 79% of people still want a reduction in this inheritance tax.
How much does this tax bring in to the State?
The inheritance tax scales have been unchanged since 2011. Inflation for more than ten years has increased the value of assets in the heritage of the French. Combined, the two phenomena have de facto increased tax revenues. In 2022, inheritance and gift taxes brought in 18.5 billion euros to the State, compared to 8 billion eleven years ago. This is significantly less than income tax (nearly 110 billion euros gross) or VAT (nearly 273 billion euros).
According to a report of the Economic Analysis Council (CAE) of 2021, “inheritance fuels a dynamic of strengthening wealth inequalities whose magnitude is much higher than that arising from work income.” Many economists, such as Thomas Piketty in his work Capital in the 21ste century (Threshold), identify inheritance as one of the main causes of social inequalities. As the economist summarizes Nicolas Frémeauxauthor of The New Heirs (Threshold), questioned by TeleramaA ” A third of the population inherits nothing, another third very little. On the other hand, 10% of heirs capture more than half of the total inheritance.”
People affected by inheritance tax can opt out of it by using legal and tax tools. They have the possibility of making donations during their lifetime, of creating family real estate companies to transmit property through company shares, or of carrying out property dismemberments to share and transmit property to reduce costs. tax. According to the CAE estimate, 40% of the transferred assets escape the tax administration through these various mechanisms.