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ISSUE NO.1 : FRENCH INHERITANCE TAX

22 Sep 2015

Sean O'Connor brings you in on this as follows :

In France as in the UK there is no Inheritance Tax between husband and wife.

But the rate between so-called strangers in blood, i.e., persons who are not related, is 60%. So if you have remarried and want to leave a part of your Estate to your spouse's previous child, that child pays 60%.

If you are not married, and leave your property to your partner, that partner pays 60%.

Ways of dealing with this situation : You can take out a Life Policy in own life expressly written in favour of beneficiary. You can do this either in the UK or in France (or elsewhere). The Policy monies do not fiscally form part of your Estate so beneficiary picks up a cheque from Insurers and pays the Tax with it. There are some restrictions on this when you are aged 70 or above.

If you are living primarily in France unmarried, you can if you want enter into a French Civil Partnership [Pacte Civil de Solidarité or PACS for short]. There is no same sex restriction on this as there is in the UK. So it is available whether same sex or different sex. With a PACS there is no Inheritance Tax at all between the persons concerned. You simply wipe it out. The main legal difference between marriage and a PACS is that with a PACS you can sack your partner at once.

The parent - child Inheritance Tax rates can on a simplified basis be said to be none on the first € 100,000 per child and 20% above that, although the rates go higher on a slicing basis if you are fairly or very rich.