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Property for sale in France

French Inheritance Tax

Guide to French Inheritance Tax implications when selling property in France. French inheritance tax law can be confusing so we have created an easy to read guide on inheritance tax for property owners.

Legal Guide to Inheritance Tax in France

French inheritance tax is paid by each beneficiary pro rata to the value of net possessions received after deduction of all legal responsibilities. If you die habitually resident in France, French inheritance tax is payable by each beneficiary on their share of your worldwide possessions. If you die domiciled outside France, then only your possessions in France are liable to French inheritance tax.

Exemptions

The following amounts are (currently) not taxable:

€ 76,000 to widow or widower
€ 50,000 to ascendants and descendants

The exemptions apply equally to gifts, and are available in full every 10 years.

In addition, and in relation to successions only, a further €50,000 global allowance is available for immediate family members, defined as being the widow or widower, descendants and ascendants of the deceased.

The Rates

French inheritance tax is due on the registration of the déclaration de succession. But delays or payment by instalments can be obtained from the French Revenue, if necessary, although interest will be charged. French inheritance tax varies from 5 per cent to 60%.

Lifetime Gifts

Lifetime gifts may be a tax-efficient way of giving away your possessions. Rates of tax and abattements are generally the same as for inheritance except that the abattement of € 5,000 available to brothers and sisters, more distant relatives and unrelated beneficiaries in successions does not apply to lifetime gifts.

Usufruct (Usufruit)

Usufruct helps to reduce the French inheritance tax. The property owners give away their house to their children whilst retaining a lifetime right (usufruit) to live there. The property owners are also entitled to any income (such as rent) that the property may produce. The younger the donors, the more effective is this technique.

More information 

* This article was adapted and used with permission from Prettys Solicitors and is intended as a guide only. You can find more information on their website. Information relating to individual circumstances should besought by contacting Prettys solicitors direct and mentioning you have seen this article on French Connections.