What Happens In France When Both Donor And Donee Are Non-Residents?

When neither the donor nor the recipient is fiscally domiciled in France, French gift tax applies on a strictly territorial basis. In this episode, we break down exactly when France can still tax the gift—and when it cannot.

🔎 What You’ll Learn in This Episode:

1️⃣ The Starting Point: No French Residence

Where both parties are non-residents, France does not apply worldwide gift taxation.

➡️ The analysis turns entirely on where the asset is located.

2️⃣ Assets That Can Still Be Taxed

French gift tax applies only to assets with a French situs, typically including:

• French real estate

• Certain movable assets located in France

In these cases, the gift may still fall within the French tax net, even though both parties live abroad.

3️⃣ Assets That Are Fully Outside French Tax

If the gifted asset is located outside France:

• The gift falls entirely outside the French gift tax system

• No French gift tax applies

Residence alone is not enough—territorial connection is required.

4️⃣ Legal Basis

This territorial limitation is expressly set out in Articles 750 ter and 757 of the Code général des impôts.

5️⃣ Practical Takeaway

When both donor and donee are non-residents:

• French-situs asset → French gift tax may apply

• Foreign-situs asset → No French gift tax

Correctly identifying the location of the asset is therefore the decisive step.

This episode highlights a rare area of certainty in French gift taxation—showing how territorial limits apply cleanly when France has no personal tax connection to either party.