the donor or deceased. Assets passing on death between spouses and PACS partners are now exempt from French succession tax, but gifts are still taxable between spouses and PACS partners. As for wealth tax, the value of your main home can be reduced by 30% for succession tax purposes provided the property is also occupied as a main home by the surviving spouse or by one or several children. PACS partners can also benefit from the 30% deduction. The tax rates for 2010 are as follows: Allowances are available, and the main ones are: For example, a child can receive 100,000 * 2 = €200,000 from their parents in allowances before being taxed. PACS partners In France, unmarried couples (regardless of gender) can enter into a PACS (Pacte Civil de Solidarite) agreement. The PACS is a written agreement which can now be achieved by going before a Notaire who then registers it with the authorities. The relations between the partners are similar to those of husband and wife. A PACS can be entered into by: any couple living in France of whatever nationality, AND any couple living outside France provided at least one of them is a French national The tax position for PACS partners is now aligned with that of a married couple. For income tax purposes, the couple is assessed to income tax as a household from the day the PACS agreement takes force. For succession tax, the surviving PACS partner is exempt from tax on inheritances. For gifts, the allowance is now €79,533 and the tax rates are as for married couples. If a PACS agreement is broken before the end of the year following the year it was entered into, for motives other than marriage of the couple or death of one of the partners, the allowance will be denied and the tax relief clawed back. As of 14 May 2009, France recognises most foreign Civil Partnerships as equivalent to a PACS. Income taxes In France there are three categories of taxes on income: the corporate tax, the income tax for individuals and taxes for social purposes (CSG and the CRDS, paid by the households). Taxes paid by employers on wages, namely social contributions, are not considered as taxes by the French central government. Income tax The impôt sur le revenu (IR) is a tax on all income available to individuals in a year. With certain