In 1993, parents give one of their three children the bare ownership of a building, subject to his paying a sum at the date of the gift, 60,369.91 euros. At the partition of their estates, the property is worth 336,000 euros. The donee argues that the charge must be revalued like the property, and that the rapport (the bringing back of gifts into the estate for equal division) is only the difference between the value of the property and the updated charge. The Nîmes court of appeal sets the rapport at 275,630.09 euros, value of the property at partition less the charge at its nominal amount. The Cour de cassation (the French supreme court for civil matters), on 16 November 2022, in a reported decision, approves: “rapport is owed only up to the net benefit procured by the gift, computed by deducting from the value of the gifted property at the time of the partition, according to its condition at the time of the gift, the amount of the charge determined at the date of its performance”. For the valuer, the formula is simple to apply, and it shows that a charge paid thirty years ago weighs far less today than it did then.
The facts
A couple die in 1995 and 2001, leaving three children to whom they had made several gifts. One of them received, by deed of 29 December 1993, the bare ownership of a building on condition of paying a charge consisting of a sum payable at the date of the gift. Difficulties arise in the accounts, liquidation and partition of the estates.
The Nîmes court of appeal, on 17 December 2020, sets at 275,630.09 euros the rapport owed by that donee, by deducting from the value of the property at the date of partition, 336,000 euros, the nominal value of the charge set at the date of the gift, 60,369.91 euros. The donee appealed: in his view, the rapport of a gift with a charge is only the difference between the value of the property and the charge, “determined at the date the charge was performed and then revalued at the date of partition”.
The decision
The first civil chamber dismissed the appeal (Cass. 1re civ., 16 November 2022, no. 21-11.837, reported). “It follows from article 860 of the Civil Code that, where a gift is coupled with a charge on the donee to pay a certain sum, by periodic payments or as capital, rapport is owed only up to the net benefit procured by the gift, computed by deducting from the value of the gifted property at the time of the partition, according to its condition at the time of the gift, the amount of the charge determined at the date of its performance.”
The court of appeal “rightly held, in determining the amount of the rapport, that, in the case of a gift with a charge payable at the date of the gift, the value of the net benefit was established by deducting the amount of the charge burdening the gift, without revaluing it at the date of partition”.
What this changes for valuation
A formula in two terms that do not move at the same pace. The gifted property is brought back at its value at the date of partition, in its condition at the date of the gift: it follows the market over the whole period elapsed. The charge, by contrast, is a sum of money; it is deducted at its amount on the date it was paid, without indexation. Thirty years of rising property prices increase the first term and leave the second unchanged, so that the gratuitous share of the gift grows with time. That is mechanical, and the valuer shows it by presenting the two terms separately, with their dates. The glossary recalls the rules of the rapport des donations.
The value of the property remains the central assignment. The ruling changes nothing in the valuation itself: value at partition, condition at the gift, without the improvements financed by the donee or the deteriorations caused by him, as recalled by the article on gifted land valued as bare land. Here the gift concerned the bare ownership; at partition, after the death of the usufructuaries, it is the full ownership the donee holds, and that is what is brought back, the reunion of the usufruct not being a new gift. The report makes that point, because it changes the value of the first term.
A charge paid in instalments is deducted at each performance. The Court refers to charges settled “by periodic payments or as capital”: an annuity or instalments are deducted at the amounts actually paid, each at its date, not at their updated value. The valuer asks for proof of payment, because a charge stipulated but not paid is not deducted, and because the total of the payments is the only measure admitted.
What the donee cannot claim. The appeal sought to revalue the charge like an investment. The Court refuses: the charge is not an improvement expense on the property, which would open a claim according to the added value, it is the partial price of a gift, and it is not revalued. The valuer therefore separates, in the donee’s accounts, the charge of the gift, deducted at nominal value, from the works he financed on the property, excluded from the condition brought back; the two are treated differently.
For the notary, a computation to document. The expert report supplies the value of the property at partition in its original condition, with the references; the notary applies the deduction of the charge according to the deed and the proof of payment. Presenting the formula and its two terms in the report avoids later arguments about what was deducted, and at what date. The guide on gift partition shows how to prevent those debates from the deed onwards.
The same rule for the reserve, as early as 2017. In a reported ruling of 11 October 2017 (Cass. 1re civ., no. 16-21.692), the Court had held that, “where a gift carries, in the donor’s favour, a care obligation, only the net benefit procured by the gift must be included in the mass for computing the reserve, the amount of the charge being determined by reference to the loss of earnings or the expenses that its performance generated for the donee”, and approved the refusal of any deduction where no cost was proved. The article on the net benefit of a gift with a care obligation presents that ruling.
What the valuer takes from it
- The rapport of a gift with a monetary charge is limited to the net benefit: value of the property at partition, according to its condition at the gift, less the charge at the date it was performed.
- The charge is deducted at its nominal amount, without revaluation; the property, by contrast, follows the market until partition.
- Periodic payments are deducted at the sums actually paid, each at its date, on evidence.
- The charge is not an improvement expense: it is not revalued according to added value.
- The report presents the two terms separately, with their dates, for the liquidating notary.
Further reading
The Market value page describes the assignment, its timescale and its fee. The guide Lifetime gift partition: valuing the lots between children and the glossary entries rapport des donations, nue-propriété and date de valeur complement this article. On the same theme: Gift rapport: property given on again is valued at that date and Farmland sold to the tenant son: rapport is measured as let. The decision is available on Légifrance.
What next
A gift coupled with a sum to pay, a property that has gained value, and a rapport to compute between heirs?
I establish the value of the gifted property at the date of partition in its condition at the date of the gift, and set out the computation of the net benefit, charge deducted at the date it was performed, in a report the liquidating notary can rely on.
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