Lifetime Gift in Luxembourg
The lifetime gift lets you pass on all or part of your wealth to your loved ones in advance. In Luxembourg, this transmission can benefit from tax allowances and allows you to organise your estate during your lifetime to avoid future conflicts.
The Types of Gift
Simple gift (full ownership)
You give the property in full. The donee becomes 100% owner.
Advantages
- ✓Complete transmission
- ✓Simplicity
Disadvantages
- ✕You lose all rights over the property
- ✕No more rental income
Gift with reserved usufruct
You give the bare ownership but keep the usufruct (use of the property).
Advantages
- ✓Continue to live in or rent out
- ✓Reduced duties (on bare ownership)
- ✓Progressive transmission
Disadvantages
- ✕Bare owner's consent required to sell
- ✕Routine maintenance at your expense
Gift-partition
Fair distribution between several children, with immediate effect.
Advantages
- ✓Avoids conflicts
- ✓Values fixed on the day of the gift
- ✓No reporting to the estate
Disadvantages
- ✕All children must be present
- ✕More complex to organise
Focus: Gift with Reserved Usufruct
How does it work?
You give the bare ownership of your property to your children, but you keep the usufruct: the right to live in the property or collect the rents.
On your death, the usufruct ends automatically and your children become full owners with no formality or additional duties.
Tax advantages
- ✓Duties calculated on the bare ownership only
- ✓Bare ownership value = total value × coefficient (by age)
- ✓The younger you are, the higher the discount
- ✓Duty saving of 30% to 70% depending on age
Link with Dismemberment
The gift with usufruct uses the mechanism of property dismemberment. The calculation coefficients are the same as those of the usufruct/bare ownership tax scale.
Gift Procedure: Step by Step
Define your project
Which property to give? To whom? With or without usufruct? These preliminary questions will determine the structure of the gift.
Appointment with the notary
The notary analyses your situation, advises you on the optimal option and assesses the tax consequences.
Property valuation
The notary has the property valued. This value will be the basis for calculating the gift duties.
Drafting the deed
The notary drafts the authentic deed of gift with all the clauses (usufruct, conditions, etc.).
Signing and registration
Signing at the notary in the presence of the donor and the donees. The notary then registers the deed.
Gift or Life Annuity: What Is the Difference?
| Criterion | Gift | Life Annuity |
|---|---|---|
| Beneficiary | Family/loved ones | Third-party buyer |
| Consideration | None (free) | Bouquet + annuity |
| Stay in the property | Yes (usufruct) | Yes (right of use and habitation) |
| Income for you | No | Yes (lifelong annuity) |
| Transmission to children | ✓ Yes | ✕ No |
| Duties to pay | Gift duties | None for the seller |
The Life Annuity If...
You prefer to receive income rather than give for free, or if you have no direct heirs to pass on to. The life annuity provides you with capital and an annuity while allowing you to stay in your home.
→ Learn more about the occupied life annuityFrequently Asked Questions
How do you make a lifetime gift in Luxembourg?
A property gift requires a notarial deed. Make an appointment with a notary who will analyse your situation, draft the deed of gift and carry out the registration formalities.
Can you give while keeping the right to live there?
Yes, this is the gift with reserved usufruct. You give the bare ownership but keep the usufruct (the right to live in or rent out the property) until your death. This is the most commonly used arrangement.
Is a gift revocable?
In principle no. A gift is irrevocable except in very exceptional cases (serious ingratitude of the donee, birth of children in certain cases). You should therefore think carefully before giving.
What are the fees for a gift?
The fees include the gift duties (depending on the family relationship and the value), the notary's fees and the registration costs. The notary will provide you with a precise quote before proceeding.
Need Advice on Transmission?
Gift or life annuity? Our experts help you choose the best solution for your family and wealth situation.