French inheritance tax applies to beneficiaries receiving assets from a French estate or from individuals who are tax residents of France.
The amount payable depends on the relationship to the deceased, the value of the inheritance, and the location of the assets.
For UK nationals, cross-border rules and forced heirship laws can significantly impact how assets are distributed and taxed.
For many expatriates, the issue is not just how much tax is payable, but who inherits what, and whether their wishes will be respected under French law.
Writing a French will if you live in France is vitally important. The deceased’s estate is distributed according to intestacy rules when someone dies without a will.
In France, this means that the estate proceeds would be distributed in compliance with French succession law, irrespective of any personal wishes.
Writing a French will if you live in France is vitally important. The deceased’s estate is distributed according to intestacy rules when someone dies without a will.
The separation of assets is linked to the relationship between the deceased and their heirs. France practices a forced heirship system, wherein there can be no deviation from the rules regarding how much can be passed on and to whom.
Let’s take a simple example of a married couple with two children. Assuming all assets were jointly owned by the couple, only the half owned by the deceased would be subject to inheritance tax.
The other half would remain the property of the surviving spouse. The estate of the deceased would thereafter be split along the following lines:
Where there is no expression of wishes, the court and family would have to decide what happens with the extra 1/12th.
It is at this point that many expatriates realise that their estate may not be distributed in the way they had originally intended.
**Note: Since 2015, an individual can request the application of Regulation (EU) No 650/2012.
This allows the law of their country of nationality to apply to succession.
However, this applies only to who inherits, not to how inheritance tax is calculated.
Things are different in France, where succession tax is levied on the beneficiary rather than the estate.
Each beneficiary is granted an allowance depending on their relationship to the deceased.
The most significant of these allowances is between spouses or civil partners (PACS), where there is no liability to inheritance tax.
Inheritance tax in France is payable on the ‘net assets’ of the deceased.
Marital law provides that couples each own 50% of any jointly held assets.
As such, on the death of a spouse, only their share is subject to inheritance tax.
The market valuation of property is normally carried out by a notaire or an appointed expert.
Any debts or liabilities are deducted before tax is calculated.
It is also necessary to declare any gifts made within the previous 15 years, as these may affect the final tax liability.
Gifting is a popular way of managing the pre-tax position of an estate.
Knowing what can be gifted, and how the rules apply, is essential.
The most common form of gifting is between parents and children.
A tax-free allowance of up to €100,000 per child is available every 15 years.
Gifts must be declared to the French tax authorities to benefit from these allowances.
There are specific rules regarding the gifting of property in France.
Transfers must be handled by a Notaire, and stamp duty applies.
Costs can be significant, so it is important to weigh the benefits carefully.
Assurance Vie contracts are widely used in France as a tax-efficient planning tool.
They allow funds to grow with favourable tax treatment and can also play an important role in inheritance planning.
Each beneficiary may benefit from a tax-free allowance of €152,500, depending on when contributions were made.
For many expatriates, Assurance Vie provides a degree of flexibility that is otherwise difficult to achieve under standard succession rules.
While French inheritance tax cannot always be avoided entirely, there are steps that can be taken to reduce exposure:
Early planning is essential.
For expatriates, the position is often more complex.
It is necessary to consider both French rules and those of your home country.
A double tax treaty exists between France and the UK, which helps prevent the same assets from being taxed twice.
French inheritance tax is not just a legal issue — it is also a financial planning consideration.
Axis Financial Consultants can help ensure that investments, pensions and assets are structured appropriately for life in France.
French inheritance tax cannot usually be avoided entirely, but it can often be reduced through planning, including gifting, Assurance Vie, and structuring assets appropriately.
Children can inherit up to €100,000 per parent tax free. Spouses are generally exempt.
French law requires that a portion of the estate passes to children. Only the remaining share can be freely distributed.
Yes, a treaty exists to prevent double taxation, although proper planning is required.
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