France assesses tax breaks for grandparents who hand over money to their grandchildren in order to economic recovery and mobilize more than 100 billion euros ($ 118 billion) in excess savings accumulated during the pandemic.
Turning Spending savings are crucial for the economies of European countries like France, where massive government assistance to support incomes during lockdowns has been largely hidden from consumers. French Finance Minister Bruno Le Maire estimates that the sum of surplus savings could reach 200 billion euros by the end of the crisis, double the amount the government has forecast plan to revive economic growth.Raising the limits on what grandparents can pass to tax-free grandchildren could prove controversial as it would only favor families rich enough to benefit from the measure. Still, Le Maire said the vast majority of French people realized additional savings during the pandemic, and that tax exemptions would only apply to “several thousand” euros and not tens of thousands.
“What kind of country do we live in? For me, giving a few thousand dollars to your grandson or granddaughter is not a policy for the rich; it is a policy of equity for the middle classes, for solidarity between the generations ”, declared Le Maire on France Info.
The current rules in France allow parents to donate a total of 131,865 euros to their children, tax-exempt over 15 years. For grandparents, tax-free transfers are effectively capped at 63,730 euros every 15 years.
The Mayor did not specify how the new measure could work. He said President Emmanuel Macron, who faces an election in a year, will decide to go ahead in the coming days.
But the finance minister reiterated that Macron’s government would not increase the tax on excess savings to encourage spending, as some left-wing lawmakers have demanded.
“It would be deeply unfair at a time when people put money aside for unforeseen events during the crisis, and it would be totally ineffective as it would prevent an economic recovery,” said Le Maire.
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