French inheritance law and your estate
Moving to France could have huge implications on how your estate is redistributed, should you die while a fiscal resident of France.
France does not allow you to bequeath your belongings as you wish. You must set aside a minimum portion for your children and you cannot transfer your property to your spouse alone in your will.
Unlike the UK, which levies inheritance tax on the estate, France taxes what the beneficiaries receive, at a rate that depends on their relationship.
Couples who are not married or in a civil partnership should look very closely at their affairs. The French system also fails to recognise the rights of step-children.
Useful tip:
- Even if you live in Britain, French succession law and tax will still apply to any homes (bricks and mortar property) in France, but any tax paid on the estate will be deducted from the UK bill.
In the full Moving to France helpguide, we explain:
- Children’s position as “reserved heirs”
- Rules on gifts to children and spouses
- Legal arrangements to protect a surviving spouse
- France’s attitude to English wills
- How inheritance tax depends on relationship
- Marriage regimes and civil partners
- The situation with estranged children
Download the guide as a PDF now from this link
…or ask a question about this topic in the comment box below.
My Mother and her two brothers inherited a hotel in France 2 years ago. One brother has since died. So the heirs are my Mother, her brother and her deceased brother’s 4 children and widow ( my cousins and aunt) My Uncle ( 1/3) and my Mother (1/3) and one of my cousins all want to sell the hotel now, as with the euro and the economy and world situation, we feel we should not wait until the present business lease is up in 2016. Either way, we will have to pay an indemnity to the man with the hotel business who is leasing the property now, we understand that. My question is, if there are multiple heirs, do they all have to be unanimous on decisions like that, or does majority rule apply here?
And if it does, would it go by number of heirs, or percentage of the estate. My Mother and her brother own 2/3 of the estate.
Thanks,
Jade
[Reply]
My partner and I co own one house and I solely own the other. The house I solely own I wish to leave to my two children only, but the first house it should be shared between his two children and my two children with the stipulation that it can not be sold unless they all agree. Is this possible?
[Reply]
Moving to France editor Reply:
February 1st, 2012 at 5:04 pm
Robert Kent, from Kentingtons, responds:
“No problem at all to leave your house to your children. Indeed there is no issue with leaving your half of the other property to your children and your partner leaving the other half to theirs. Assuming that this property is held directly (not in a property company) then all owners would need to agree any sale / buyout etc. meaning you wishes are already achieved.”
[Reply]
I am a widow.I donot have any brothers, sisters,or children.My parents are dead.
I own a half of a house in France.The brother of my late husband and his wife own the other half.
I am in the process of making a french will whereby my half of the property will be left to a niece of my late husband
When I die(providing that we still own the property) what percentage of my French estate do I have to pay in taxes
[Reply]
Moving to France editor Reply:
February 1st, 2012 at 5:04 pm
Robert Kent, from Kentingtons, responds:
“The issue is that the ‘estate’ does not pay tax in France, as assets are left to beneficiaries and it is they that pay the tax depending on their relationship to you. If they are not related to you then they will pay 60% of the value that you leave them, which is probably not what you want to hear. Even if it was your niece, they would be deemed as related to the fourth degree and taxed at 55%. Assuming that you own the property directly, there is nothing you can do to avoid this apart from sell your part of the property.”
[Reply]
My husband and I have been married for 37 years, no children. Lived in France for 6 years. Have signed a French legal document to give the property to the survivor everything is in joint names do we did a will please
[Reply]
Moving to France editor Reply:
February 1st, 2012 at 5:03 pm
Robert Kent, from Kentingtons, responds:
“I think the question is, do you need to do a will. The answer depends on exactly what you signed. Either you signed a tontine clause inserted in the purchase contract (that will be referred to in the contract as a ‘clause d’acroissement’) or you have changed your marriage regime. If you have a tontine clause on the property then a will is advisable to be sure that your wishes are met on other assets. If you have a marriage regime of community, then this is arguably not required if all your assets are in France, though having a will does no harm (some notaires refuse to do a will if a you have a community regime). If you have property in the UK, then you need a will in the UK as it will fall under UK law.”
[Reply]
I am 60 and have lived with my partner for 36 years. Neither of us have ever been married but I have a 41 year old son. My partner has no living relatives. We have lived in France permanently for 6 years. The house is in my partners name only because we did not understand the implication in the future. The house is valued at 300,000€.
Can you tell me if there is anything we can do to insure the house would be mine in the event of his death.
[Reply]
Moving to France editor Reply:
February 1st, 2012 at 5:03 pm
Robert Kent, from Kentingtons, responds:
“Your situation is not quite as complicated as you think, regarding succession law, but the problem will be inheritance tax if you take no action. The fact that your partner has no reserved heirs means that he can leave to you whatever he wishes, so the property is not an issue as long as he writes a will leaving it to you. The issue is that there is no formal connection between you, meaning that you will be assessed as a non relative and so will pay inheritance tax at 60%! The solution to this is to formalize your partnership, either by marriage or a PACs agreement. Married or PACsed partners are exempt from inheritance tax on death, so curing any potential problems for you.”
[Reply]
When we bought our house in France in France in 1999, we donated the property to one of our three children – our married daughter (in her name only) as the other children did not intend to ever live in France.
Now our daughter – the child who recieved the donation – does not live at the property (we have rights to live there til our death) but my husband and I and our 2 sons do continue to live there.
We would like to reverse the donation and have spoken to the notaire but our daughter is refusing to allow the reversal.
Is there anything to do to ensure we can reverse the donation as we have nothing to leave to our other two children and they are dependent on us financially as my husband and I are both disabled and are cared for by these 2 boys?
We have also always paid the tax foncier and supported our daughters family for several years and done about 30000 euros + labour of works to the property.
[Reply]
I’ve heard mention that the French inheritance laws will need to be reconciled under an EU directive in order to facilitate the EU right to “freedom of movement”. Is this true? And, if so, how soon might this directive take effect? I have read that the form of this directive might be choice of law for international couples, thus, a UK couple resident in France could choose UK law in respect to inheritance so that the surviving spouse would have the right to re-settle with no encumbrances. Thank you.
[Reply]
Moving to France editor Reply:
August 30th, 2011 at 7:18 pm
http://www.connexionfrance.com/news_articles.php?id=2293
[Reply]
We are a non-married couple who intend to enter a PACS & plan to reside perm. in France-There is one child from a previous marriage-How do we ensure that if I die first(Mother of child)My partner/stepfather can remain in the property and ultimately leave the property to my daughter- without her incurring 60% taxes on her inheritance from him.My partner has not been previously married & has no children from any previous relationship/marriage. Thank you
[Reply]
Moving to France editor Reply:
June 15th, 2011 at 8:34 am
Robert Kent, from Kentingtons, responds:
“If your only objective is that the survivor can remain in the property, a French last Will and testament will achieve your objective. It is possible to bequeath the “usufruit” or right of use to your partner. You do not have to be married to do this. This means the ‘bare’ ownership would pass to your daughter on your death and your partner would have the right to remain in the property during his life time. He may do any work to the property he wishes and he may even rent it out if he wishes to move. Only selling the property becomes an issue as your daughter would be entitled to her rights at this time. To do a will you just need to visit your local notaire, who will guide you in the wording and notarise it for you.”
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Fay Brooke Reply:
June 22nd, 2011 at 8:25 pm
Many Thanks appreciate your reply & time – Would it be better to purchase ‘en tontine’ or ‘en division’?- or does this not impact on your above advice?
[Reply]
I have recently bought a house and moved to France from the UK.
I can’t stand my brother. He is a grasping, greedy selfish man. My other sibling has plenty of money and doesn’t need anything from my estate. Is there a way that I can stipulate that, should I die everything goes to, for example, a home for abandoned cats?
[Reply]
Moving to France editor Reply:
March 10th, 2011 at 10:04 am
Moving to France respond:
French law stipulates certain proportions of your estate must go to héritiers réservataires, however, today this essentially means children. You would not be able to give all your estate to abandoned cats if you have children. Siblings are not héritiers réservataires so you are not obliged to leave money to your brother or your sister. It is worth noting that if you do not give all your estate to cats, that some charitable bequests are exempt from inheritance tax, should you wish to give to other people.
[Reply]
Robert Kent of Kentingtons responds:
This is a very difficult question to answer without more information, this is because there are so many variables. However, here are some things you should be thinking about, as well as a couple of the more popular options.
You need to decide equal shares of what; your estate only or your joint estate? Is your spouse’s objective to leave money only to your daughter or is he / she for it to be split between the two children?
Any child receiving assets from a step parent would be liable for inheritance tax at 60%, so this is generally not desirable.
Do you know also what matrimonial regime you have, as this will affect how your estate will be treated?
One solution is to merely leave each other the usufruit (right of use) of the estate, instead of giving the survivor full ownership. This way the step child would avoid 60% inheritance tax and would be sure of receiving his share, since he would receive the bare ownership immediately. It must be considered that this would leave the survivor less flexibility, so you need to decide what is most important to you.
For those with reasonable capital assets, another popular way is to place capital in an “assurance vie” investment structure. There are several ways of using this structure to get around inheritance tax and succession law.
One way is for the natural parent to leave their child the property, whilst the step parent only leaves capital to their step child via the “assurance vie”. Leaving money this way means the child would get an extra allowance of €152,500 (the limit per beneficiary, so for two children €305,000 etc.) and would pay no more than 20% inheritance on the value above this threshold, which is certainly more attractive than paying 60% on the whole amount.
There are also other options, such as the use of a “quasi usufruit” or “clause de démembrement” in the contract.
The great advantage of using an “assurance vie” structure is that you have flexibility. Generally, you can alter the beneficiary clause at any time and it can be a complex or as simple as you wish, so you can always equal out what the children will get. You can even have your clause registered with a notaire with a set of instructions to do certain things in certain scenarios, essentially behaving like a trust.
In conclusion, it is rarely clear cut for those with children from former marriages and it is important to have a solution tailored to your objectives, thus I would strongly suggest that you seek professional advice from a suitably French qualified and regulated tax and investment consultant.
[Reply]
we are a married couple with a daughter (35 yrs)
from our marriage I have a son (43yrs)from my first marriage how can we make sure that my son gets equal shares on our deaths?
[Reply]
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