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Guide 2 Inheritance and Sucession Planning in France

Category: Money and Finance

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In France succession tax is equivalent to inheritance tax in the UK.  Succession tax is levied on inheritances and lifetime gifts and is paid by the beneficiary of the inheritance or gift and can depend on the beneficiaries relationship to the deceased.

 

If you are a French resident succession tax is levied on your worldwide assets but if you are a non resident then succession tax is only payable on your real estate actually in France.  Succession tax is due if;

 

  • The deceased is resident in France on the date of their death, or

  • The beneficiary is a French resident when they take receipt of the inheritance and has been so for at least 6 of the previous 10 years, or

  • The gift or inheritance is physically located in France

 

There is no tax to pay on inheritances between spouses and PACS partners.  And inheritances are also exempt if passed to a sibling who is single, widowed or divorced aged over 50 and suffering from an illness which prevents them from employment, providing they lived with the deceased during the five years prior to death.

 

 

2010 allowances

 

Spouses and PACS partners on gifts (inheritances exempt)

79,533 €

To each natural or adopted child from each parent

156,974 €

To each natural or adoptive parent

156,974 €

To children on your divorce (up to age 18)

2,700 € py per child

To a grandchild (gifts only)

31,395 €

To a great-grandchild (gifts only)

5,232 €

Cash gifts to a child, grandchild or possibly nephew/niece subject to donor’s/donee’s ages (non-renewable)

31,395 €

To unmarried brother/sister over 50 or invalid who has lived with deceased for at least the last five years (gift only)

79,533 €

To a sibling not covered above

15,697 €

To a nephew/niece (gifts and inheritances)

7,849 €

To a nephew/niece by representation of a sibling

15,697 €

To any other person 

1,570 €

To any disabled person – additional to above

156,974 €

 

The living representatives of a deceased descendant share that descendant's allowance between them in addition to their own allowances.

 

Allowances increase annually in line with inflation.

 

 

2010 Succession Tax Rates

 

Direct line rates, including adopted children but excluding step children

 

Less than 7,953  €

5% 

7,953  € to 11,930  €

10% 

11,930 € to 15,697  €

15%

15,697  € to 544,173  €

20% 

544,173  € to 889,514  €

30%

889,514  € to 1,779,029  €

35%

1,779,029  € +

40%

 

Indirect line rates i.e., siblings, other relatives and non relatives

 

Less than 24,069 €

35%

Above 24,069  €

45%

 

 

The value of the deceased's main property may also be reduced by 30% if the house is also used as the main home by a surviving spouse, PACS partner or children.

 

 


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