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Old Oct 29th 2015, 9:33 am   #1
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Default French Inheritance Tax (possible Sticky?)

Calcul - Droits de succession : Tout savoir sur le calcul des droits de succession | De Particulier Particulier - PAP

indicates the percentage of Taxe de Succession to be paid by heirs named in the deceased's Will on the value of their inheritance.
Despite the possibility of choosing the country of validity of a Will, French Taxe de Succession will still be levied on French property.
This is particularly important for couples who aren't legally bound and who buy property jointly or in one name only. In the event of one of the "partners" dying, the surviving partner must pay 60% of the value of their inheritance (by Will). This 60% has to be paid within a few months of the decease, which may mean financial difficulties in order to pay the Taxe. If the partner dies intestate, the survivor inherits nothing.
The 60% also applies to any other nominated heir who has no legal or blood relationship to the deceased. And further complications arise if either or both partners have children from earlier relationships, as well as children of their own. In such a case, it's highly recommended to consult a Notaire who will advise as to the best way of protecting everyone"s interests.
Corrections and additions welcome!
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Old Oct 29th 2015, 2:30 pm   #2
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Default Re: French Inheritance Tax (possible Sticky?)

I would strongly advise to take an "assurance vie" if the person savings are less than 30500 euros.
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Old Jan 11th 2016, 5:35 pm   #3
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Default Re: French Inheritance Tax (possible Sticky?)

Hi DMU, any advice on this situation

My parents lived in France for 10 yrs until ill health forced them back to the UK. Mum is now in a nursing home and Dad in a flat of his own but his health, like my mother's, is precarious. We now have an empty house in Brittany which we are trying without much success to sell. Do the inheritance rules still apply if they die and we still haven't sold the house? Does the fact they will probably end up selling the house with a significant lost make a difference.
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Old Jan 11th 2016, 6:31 pm   #4
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Default Re: French Inheritance Tax (possible Sticky?)

Quote:
Originally Posted by jjmb View Post
Hi DMU, any advice on this situation
Do the inheritance rules still apply if they die and we still haven't sold the house?
I'm not DMU but - unfortunately yes, it's not an uncommon situation. There is a deadline for paying the tax, which I believe is 6 months after you inherit (ie after the death) but I think you can arrange a further delay, though AFAIK there would be interest added.
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Originally Posted by jjmb View Post
Does the fact they will probably end up selling the house with a significant lost make a difference.
Well yes, in that, you would pay less tax. If you're a direct offspring of both you'd get a 100,000€ allowance from each parent before any inheritance tax is due. So as long as there is nothing complicated about the succession, then if the estate that you inherit is below 200,000€ there would be no liability.

I'm a bit confused though because your post sounds a bit as if you're imagining inheriting the house, and at the same time you're imagining the house being sold before your parents die. If they sell the house before they die you won't be inheriting a house will you - you'll just inherit money. So in fact, if they are now UK residents and if the house is sold before they die, French inheritance tax needn't be an issue. CGT might possibly, but only if the house is sold at a profit.
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Old Jan 11th 2016, 6:44 pm   #5
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Default Re: French Inheritance Tax (possible Sticky?)

Hi Eurotrash,

the situation is that at the moment, my parents are alive but not living in France. Mum is hanging on to a thread and Dad had a stroke in March 2015. They moved back to the UK in 2015, Mum in a nursing home and Dad in a flat of his own. We have been trying to sell the house since last summer but no joy. The house market in Brittany is dire and their house is not well situated. We would like to sell the house before they die but there is a good possibility, it will happen after that event now, as both of them are very frail healthwise. We live day by day. So knowing all the good advice I have got from this forum in the pass, I thought I would ask a what if question.
From what you say, there should not be taxes payable on death as the house value is well below the threshold and in fact they will probably get less than they paid for it in 2002 despite all the renovations they have made.
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Old Jan 12th 2016, 8:24 am   #6
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Default Re: French Inheritance Tax (possible Sticky?)

Quote:
Originally Posted by jjmb View Post
Hi Eurotrash,

the situation is that at the moment, my parents are alive but not living in France. Mum is hanging on to a thread and Dad had a stroke in March 2015. They moved back to the UK in 2015, Mum in a nursing home and Dad in a flat of his own. We have been trying to sell the house since last summer but no joy. The house market in Brittany is dire and their house is not well situated. We would like to sell the house before they die but there is a good possibility, it will happen after that event now, as both of them are very frail healthwise. We live day by day. So knowing all the good advice I have got from this forum in the pass, I thought I would ask a what if question.
From what you say, there should not be taxes payable on death as the house value is well below the threshold and in fact they will probably get less than they paid for it in 2002 despite all the renovations they have made.
Hi, ET has answered for me! In fact the link that I posted doesn't give details on the "allowance" for each heir before the Succession Tax is levied, and you wouldn't have to pay this Tax if your parents were to die before the property is sold and the selling price is less than 200 000€.
My former neighbour's UK heirs are in the same position as yourself, in that they didn't pay any Taxe de Succession when she died. On the other hand, they still have an empty house on their hands and have already reduced the asking price by one-third. The French property market is definitely a buyers' market at the moment, and you may have to accept a substantial reduction in order to sell it. From experience with my neighbour's children, who were considering selling the house in their mother's lifetime (she had returned to the UK), it might be advisable to enquire about your parents' signing Procurations (prepared by a Notaire, not an Estate agent) in case their house is sold in their life-time.
Hope this helps a little....
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Old Jan 12th 2016, 9:08 am   #7
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Default Re: French Inheritance Tax (possible Sticky?)

All you can do if you just want rid is reduce it to a silly price, put it on the market with every estate agent who will take it, put it on leboncoin (France's main buy&sell website) too if you can find a French-speaking person to handle that for you, and somebody will snap it up as a bargain.

If it comes to it, you can refuse the succession and have nothing more to do with the house, it will be left to the commune to deal with and will probably stand empty for decades but at least you won't have annual property taxes to pay on it - but that wouldn't help the situation if social services are including the value in your parents' estate.
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Old Jan 12th 2016, 12:03 pm   #8
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Default Re: French Inheritance Tax (possible Sticky?)

Quote:
Originally Posted by EuroTrash View Post
All you can do if you just want rid is reduce it to a silly price, put it on the market with every estate agent who will take it, put it on leboncoin (France's main buy&sell website) too if you can find a French-speaking person to handle that for you, and somebody will snap it up as a bargain.

If it comes to it, you can refuse the succession and have nothing more to do with the house, it will be left to the commune to deal with and will probably stand empty for decades but at least you won't have annual property taxes to pay on it - but that wouldn't help the situation if social services are including the value in your parents' estate.
Be careful about selling a property at a silly low price. A french neighbour of mine did exactly that with a house and the fisc issued them with a tax demand. They assumed that there was a non-declared cash element in the sale and the tax bill represented the tax on the difference between the declared sale price and what the fisc thought that the property was worth.
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Old Jan 12th 2016, 12:16 pm   #9
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Default Re: French Inheritance Tax (possible Sticky?)

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Be careful about selling a property at a silly low price. A french neighbour of mine did exactly that with a house and the fisc issued them with a tax demand. They assumed that there was a non-declared cash element in the sale and the tax bill represented the tax on the difference between the declared sale price and what the fisc thought that the property was worth.
That's a fair point. Clearly the fisc do have to be alert and proactive on property sales below market value because people try all kinds of tricks to avoid tax - selling cheap to a family member or friend, or cash under the table as you say. But in this case it sounds as if there would be no tax to be avoided in any case - even if the house sold at 'market value' there would be no CGT liability and no potential inheritance tax liability - so why would the fisc have an interest? what tax bill could they send? There is no tax on simply 'selling a house'. And since the OP could easily show the property has been on the market for years, progressively dropping in price, I really don't think they need worry.
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