Inheritance Tax

It is important to plan for inheritance tax but it should be noted that in France, the system is very different and much more complex than it is in the United Kingdom.

For instance, in France forced heirship rules apply and French inheritance rules are based on residence. This, in effect, means that if an individual is a long-term resident in France, he or she will fall under the category of French Succession Tax rather than pay UK inheritance tax.

Moreover, in France there is no concept of ‘domicile’, which ultimately means that if you are a resident if France, it automatically means that you are a French tax payer.

The French inheritance tax - also known as ‘Droits de Succession’ - is based on the amount transferred and the relationship to the beneficiary. Tax is then paid by each individual beneficiary. As of 2015, EU regulations will allow an individual to choose which Succession Law can apply although tax paid will still fall under the country of residence. Thankdully deVere France is on hand to help you through this very diffuicult period in your life.

In France, the following applies:
 
Transfers between spouses and Civil Partners are tax-free but lifetime gifts are taxable.

The main allowances are the following:

  • €100,000 for direct line inheritances and gifts (scale applicable as from 1 September 2012).
  • €15,932 for inheritances between siblings.
  • €159,325 for inheritances and gifts to disabled people (this allowance is added to the allowance to which such people are entitled within the family).

The principal allowances applicable to gifts only, in addition to those listed above, are as follows:

  • €80,724 for gifts between spouses.
  • €31,865 per share for all gifts to grandchildren.
  • €5,310 per share for all gifts to great-grandchildren.

This allowance is applicable only once every 15 years.

Transfer in favour of ascendants and descendants taxed at:

Up to €8,072

5%

From €8,072 – €12,109

10%

From €12,109 – €15,932

15%

From €15,932 – €552,324

20%

From €552,324 – €902,838

30%

From €902,838 – €1,805,677

40%

Above €1,805,677

45%

       
       

Transfer between blood relatives up to the fourth degree (whatever the amount)

55%

Transfer between remote blood relatives (beyond the fourth degree) and unrelated parties (whatever the amount)

60%

 

Wealth tax scale

The scale includes 6 rates (from 1 January 2013):

 

Fraction of net taxable value of assets

Applicable rate (%)

Not exceeding €800,000

0

Greater than €800,000 and less than or equal to €1,3 million

0.50

Greater than €1,300,000 and less than or equal to €2.57 million

0.70

Greater than €2.57 million and less than or equal to €5 million

1

Greater than €5 million and less than or equal to €10 million

1.25

Greater than €10 million

1.50

Why not let deVere France handle the headaches of Inheritance Tax Planning for you? Contact deVere France here for a free, no obligation consultation today.