A manual donation is taxable if it is discovered after a tax check

Two spouses are subject to a tax audit. In the first interview with the verifier, the wife stated that she had received more than EUR 1 million from her biological father for three years. After the interview, she files two disclosure forms for manual donations and requests the option to report these donations within one month of the donor’s death, as required by tax law. Indeed, for a donation greater than €15,000, it is possible to declare the gift and to pay the related fees within one month of the donor’s death (and not within one month of the disclosure of the gift).

Claiming that the disclosure was not spontaneous, so that the wife could not exercise the option of deferred declaration of gifts, the tax authorities sent her a proposal for adjustment. As her claim was rejected, the wife brought proceedings before the Nanterre General Court against the tax authorities in order to be relieved of the rights claimed. If the original judges rejected his application, the Versailles Court of Appeal ruled in his favor.

On appeal by the tax authorities, the Commercial Chamber censure the appeal judgment and uphold the judgment of first instance. It recalls that the intention of the legislature was to encourage donees to spontaneously disclose manual donations to the tax authorities. The tax law reserves the possibility of deferring the declaration of such gifts and the payment of transfer duties free of charge after the death of the donor only to the cases of spontaneous revelation, without any verification or fiscal control procedure.