France’s recent overhaul of inheritance tax regulations is set to change the game for family-owned wineries, empowering them to stay in the hands of the next generation.
This year, numerous domaines in the Burgundy region will start navigating this transition, thanks to significant updates in the country’s inheritance tax policies.
Significant Changes in Inheritance Tax
For years, estates valued at more than €500,000 were subjected to full inheritance tax rates, placing heavy financial strain on families.
On the flip side, properties under this amount only received a 75% tax exemption—a figure that seemed inadequate given the booming wine sector in Burgundy.
However, this threshold has seen a remarkable leap from €500,000 to an impressive €20 million, a change largely driven by passionate advocates from the Côte d’Or region.
Thibault Huber, a well-respected winemaker and head of the Confederation of Appellations and Winegrowers of Burgundy (CAVB), has been vocal in his criticism of the outdated inheritance tax system.
He warned that if these regulations remained unchanged, many esteemed estates could fall into the hands of wealthy outsiders, consequently displacing family-owned vineyards and creating an undesirable, feudal-like dynamic akin to medieval times.
Advocacy and Legislative Efforts
This urgent need for reform was highlighted last year when Poisot Père & Fils, a winery in Aloxe-Corton, was compelled to sell 1.3 hectares of their coveted Grand Cru vineyards to luxury giant LVMH for a staggering €15.5 million, largely due to their crushing inheritance tax obligations.
One family member expressed their dismay, emphasizing that such tax burdens were simply unmanageable.
Huber pointed out that discussions surrounding the need for changes in inheritance tax had persisted for years.
In a concerted effort, he, alongside Côte d’Or senator François Patriat and Saône-et-Loire deputy Benjamin Dirx, pushed for reform directly with former Prime Minister Michel Barnier, particularly spurred on by the distressing sale involving the Poisot family.
Outlook for the Future
The proposal received a warm reception and passed through several legislative reviews, even sparking debates on whether it unfairly favored the wealthy.
In response to these concerns, Patriat clarified the reform’s true purpose: to safeguard Burgundy’s rich winemaking tradition rather than cater to the affluent.
There is just one condition for the new inheritance tax benefits: all related parties must collectively hold the properties for a minimum of 18 years.
In light of this monumental shift, Huber expressed genuine excitement, viewing this as a huge win for the wine community.
He acknowledged the steadfast advocacy from groups like the National Confederation of Wine and Wine Spirits Producers with Appellations, particularly as soaring vineyard prices had led to family disputes over inheritances.
With these reforms in place, Huber predicts a surge in generational transfers of Burgundy domaines in the upcoming year, providing a hopeful outlook for local notaries and families eager to preserve their legacies.
Source: Wine-searcher
