# Transferring money to parents in France, avoiding gift tax



## cfb

I just arrived last week in France with my fiancee, a french national. Given our circumstances it will be difficult for us to find an apartment as we have money, but not income or recent work history. Our plan was to have her mother rent the apartment in her name, and then we would simply pay the rent to her mother. 

What I am not sure about is how to transfer the money to her mother without it being taxed. I found information on gift amount limits for parents and grandparents gifting to children (ascendants to descendants) but could not find anything in English on gifting from children to parents. 

Does anyone know where she or I would go to look up that info? Or does anyone have experience transferring money to parents?

I also read online that there is a special tax treaty between France and the US, where I am from, that would allow the gift tax to be paid through the US system, and would possibly not create a tax liability on her mother's side in France, because of the treaty, or my side in the US, because of exemptions in gifting money. 

It is described on a this website Gifts of Securities, Cash by U.S. Resident to French Resident Exempt up to $11.7M

Does anyone have experience gifting money between US and France in general or under this treaty? 

Or maybe I am approaching this in entirely the wrong way? Is there a simpler way to transfer funds to her mother, maybe just by opening a joint bank account? Does that not still count as taxable income for her?


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## Bevdeforges

A couple of caveats here: First of all, take a look at the title of the article you cited: Cash by U.S. *Residents* to French Resident... If you are moving to France you are no longer resident in the US and different rules may apply.

Why not have your mother-in-law act as guarantor for your lease? Many of the expats here can't establish guarantors because their parents don't live in France, but you've got pretty much the classic set up. You rent in your own names, and pay the rent directly from your French bank account. They only turn to your mother-in-law if something keeps you from making your rental payment.


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## cfb

Bevdeforges said:


> A couple of caveats here: First of all, take a look at the title of the article you cited: Cash by U.S. *Residents* to French Resident... If you are moving to France you are no longer resident in the US and different rules may apply.


I planned to get around that by having a family member in the US, whom I share a joint account with and I have given power of attorney to, to do the transfer under her name. 

As far as her acting as a guarantor vs. directly signing the lease, my understanding was that having a guarantor was often not good enough for landlords, in addition the GLI insurance only accepts a guarantor if the lessee is a student. My fiancee is a doctoral student, but I am not and we are not married yet, so we thought that might have caused issues. Your thinking having a french person as guarantor will be enough to make the rental process go smoothly? I don't have any experience with this. I've only read all of the apartment rental horror stories online.


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## Bevdeforges

Nothing you can do will necessarily make everything go "smoothly" (however defined), however the use of a guarantor is not that uncommon - even for doctoral students with foreigner hubands/boyfriends. Going through an elaborate procedure to rent a place in someone else's name and then wire money back and forth, trying to avoid the gift tax (which isn't really a huge factor here unless you're renting something super luxurious and talking about thousands of euro a month in rent) is probably more likely to cause problems (if found out by the landlord or the bank) than offering your mother-in-law as guarantor.


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## LoriEleanor

My experience with GLI is that the tenants themselves must earn the qualifying income to be accepted by the insurance company running the GLI. Most said they would not accept a dossier that needed a guarantor when GLI was required.

Of course, things can vary from region to region, but this was our experience in the Paris region and in the South of France region.

They normally do not like dossiers where most of the wealth is held in U.S. accounts. Even when the French bank account held considerably more than the amount of the total rent for the 3 year contract. Very frustrating.


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## BackinFrance

LoriEleanor said:


> My experience with GLI is that the tenants themselves must earn the qualifying income to be accepted by the insurance company running the GLI. Most said they would not accept a dossier that needed a guarantor when GLI was required.
> 
> Of course, things can vary from region to region, but this was our experience in the Paris region and in the South of France region.
> 
> They normally do not like dossiers where most of the wealth is held in U.S. accounts. Even when the French bank account held considerably more than the amount of the total rent for the 3 year contract. Very frustrating.


You are correct. Only tenants who present a minimum risk are acceptable. 


https://www.pap.fr/bailleur/loyers-impayes/se-proteger-contre-les-impayes-de-loyers/a1298/lassurance-loyers-impayes#:~:text=La%20Garantie%20des%20loyers%20im


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## SPGW

As you describe it, this may not be a ‘gift’. You are reimbursing the person who is paying your rent.


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## Chrissippus

Does the OP's mother have a US bank account? If so, do the transfer from US bank to US bank. If not, have her open an account at sdfcu.org, a credit union that will open accounts for expats.


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## Bevdeforges

Chrissippus said:


> Does the OP's mother have a US bank account? If so, do the transfer from US bank to US bank. If not, have her open an account at sdfcu.org, a credit union that will open accounts for expats.


I think they were talking about transferring money through the OP's fiancée's mother, who is French and living in France. The credit union you seem so anxious to promote may not be a viable option here.


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## cfb

Thanks for the replies everyone!


LoriEleanor/BackinFrance - You are describing what I read online, but it seemed like there might be an exception for students, it just isn't clear to me if that would work in our case since we are not both students.

Bevdeforges - Sorry, maybe I wasn't clear, we weren't trying to present our circumstances to the bank or landlord as anything different from what I described to you. I assumed this would not be a problem for them. My fiancee's mother would be responsible for payment and if there was an issue with non-payment they would come directly to her for repayment, she is still fully responsible. The fact that we send payments back to her to reimburse her expense (and have the money to do so) should look good not bad, right? 

My fiancee briefly looked into this online on French-language forums, apparently this arrangement does exist, just that usually our names will also be included on the contract and who is an who isn't living where is also shown on the contract.

I imagine that landlords view guarantors as a last resort and there would be delays/admin procedures involved in getting repayment through them, so that is why it isn't enough for many landlords and having her name on the contract would make for a more attractive dossier. I don't know for certain if that is true. 

SPGW- If my mother-in-law is the one on the lease I figured payments she made on the rent were not considered payments on our behalf and we are not seen as reimbursing her. I assumed any amount we gave her mother would be taxable somehow, and if we paid her 12000 per year for a 1000 Euro per month rental that would be taxed as 12000 of income or taxed as a gift at some other rate. Again, I may be mistaken on that, especially if our names end up on the lease in the end. I will continue to investigate that.

I basically just wanted to find a way to give her, or give her access to a sum of money from our savings that she can use to pay our rent that would not cause us or her to be taxed again on that money. The only ways I could think of were gifting through this US/France tax treaty, some kind of tax exempt gift based on her relationship with her daughter (which doesn't seem to exist), or a joint account. But if we are the ones funding the joint account and she is the one spending the money on rent I am concerned that would still be considered a gift.


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## BackinFrance

Not all landlords subscribe to GLI, far from it because premiums are high and this insurance requires a fair bit of additional paperwork. 

I would be concerned about an arrangement where the lease is granted to someone who is not the tenant (sub-lets require written authorization by the landlord).

Why not try something like Sabattical Homes or some other form of tenancy?


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## LoriEleanor

I agree with BackinFrance about the person responsible (your wife's mother) being the name on the lease yet not living on premise. I really don't think ANY GLI would touch that. GLI insurance rules are very very specific and make - from my experience - no exceptions to any of their rules (which there are many).

If you are renting in the Paris region, it is hard to avoid GLI. Not impossible, but not easy. In my part of the South of France, GLI is not uncommon, but you can find things without it. Real Estate agencies down here operate in quite the same way as GLI's do. Most will not accept a dossier where the income and/or wealth is held outside of France.

Try finding a rental that is handled solely by the actual owner like on PAP, SeLoger, etc.


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## EuroTrash

Re the money, the simple solution that occurs to me - which is so simple that there must be a reason why it isn't possible, or someone else would have suggested it - is, for your fiancée and her mother to open a joint bank account here in France. Fiancée feeds the account, mother writes the cheques.

Still leaves the problem of the names on the lease though.


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## Bevdeforges

cfb said:


> give her access to a sum of money from our savings that she can use to pay our rent that would not cause us or her to be taxed again on that money. The only ways I could think of were gifting through this US/France tax treaty, some kind of tax exempt gift based on her relationship with her daughter (which doesn't seem to exist), or a joint account. But if we are the ones funding the joint account and she is the one spending the money on rent I am concerned that would still be considered a gift.


I don't know why you assume this. What you're proposing is a simple "pass-through" arrangement. You are not gifting anything to anyone. A "gift" is something you give someone with no strings attached. (Over-simplified definition, but basically what you have here.) She will not have the ability to use the money on herself, but is obligated (morally, anyhow) to use it to pay your rent for you. 

Try doing things the "simple" way at first. You obviously have the funds available in order to transfer a year's worth of rent to your fiancée's mother. Start out offering that without the middle(wo)man, and if that isn't acceptable, then offer the guarantor approach. In lots of areas of France, using a guarantor is more common than you would think. And it isn't necessary that both of you be students. Here in the area where I live (Ile de France) we have lots of foreign students who bring their spouses with them for a year (or two or three) in France and they rent just fine in the area. You really do want to have the lease in your own names - and since you are the source of the funds anyhow, why not just go direct?


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## cfb

Ok, if it is the simple way to apply directly for ourselves without proof of income or recent work history for me than we will try that approach. I had just read online about people who, instead of being rejected flat out, got dragged around for days or weeks trying to close a deal on an apartment only to be rejected at the very end. We were thinking presenting the most secure arrangement upfront might allow us to avoid that, but if having her mother rent it directly rather than act as guarantor doesn't make the application look better, just more complicated, than we will present it to the landlords as you suggested.


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## Bevdeforges

Depending on field your fiancée is in, you might check with the university to see if they have any resources for helping grad students find reasonable housing arrangements. There is an organization in the Paris area called Sciences Accueil for students in the scientific universities and research institutes in the Saclay area. There may be something similar for the university your fiancée is going to be working with.


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