Planning to make a manual or bank gift? Do it before the end of 2024!

What is a manual or bank gift?

Manual and bank gifts are simple and tax-efficient ways to transfer wealth:

• A manual gift involves the physical delivery of goods or money to the recipient.

• A bank gift involves a bank transfer from the giver's account to the recipient's account.

After such a gift, both parties usually draw up a pacte adjoint, a written document setting out the terms and conditions of the gift. Until this pacte adjoint is officially registered, no gift tax is due. However, be aware that if the donor dies within the suspect period, the amounts gifted will still be included in the estate and will be subject to inheritance tax.

What's changing?

Currently, the suspect period is three years. If the donor dies more than three years after the gift is made by hand or by bank transfer, the recipient will not owe any inheritance tax on the gift.

From 1 January 2025, this period will be extended to five years, increasing the period during which the gift could still be subject to inheritance tax if the donor dies.

What does it mean for you?

Do you want to limit the risk to three years instead of five? Then it's wise to arrange your manual or bank gift before the end of 2024.