summersky14

Can anyone please clarify a couple of points I'm not sure of. Firstly will I pay tax on my state UK Pension again in France having paid already in the UK. Secondly, Have I got it right that step children must pay 60% inheritance tax when they come into their inheritance from the surviving partner of a second marriage, and is it 60% each for their respective share or 60% from their joint sum inherited. Thanks for any help. Summersky 14.

EuroTrash

If you live in France you pay tax on your UK state pension in France not in the UK.
Yes if step children are classed as non-relatives they pay 60 per cent inheritance tax. They each get a tax free allowance of approx 1,500€ and they each pay 60 per cent on everything they receive above that. (Unless one of them happens to be disabled in which case they get extra allowances.) But, you need to ask a notaire because I have a feeling that if the 'surviving partner' took them on when they were children and brought them up, it is treated differently.

cyrian

You get your UK pension paid tax-free but if your pension is greater than the tax-free personal allowance then your tax code is adjusted to deduct the correct total tax from other income.
You will not be taxed twice on any UK income because you declare foreign income i.e. UK income plus tax already paid in the foreign income section of your French tax return.
Step children are regarded the same as friends and will pay the current level if IHT for non-relatives.
a) If you know that one partner is about to die then any jointly owned assets can be transferred to an account of the surviving spouse prior to death.
b) You can keep cash in joint accounts where the step children inherit
nothing. The surviving spouse can then either gift the appropriate amount or they can wait until the 2nd death.
c) move back to the UK before you die.

Have a look here: http://www.notaires.fr/notaires/en/home

TinaBee

Your UK state pension is subject to French tax. To have this taken into account by HMRC you need to complete a France Individual form - see here

http://www.hmrc.gov.uk/cnr/france-individual.pdf

There are inheritance planning measures you can take to reduce or avoid the inheritance tax paid by stepchildren, but as the other posters have said, you need to consult a competent and up-to-date notaire.

One option is to have the biological parent leave their share of any property to their children as a residual legacy (in French "legs residuel"). This is a process whereby the property can be left to the spouse (with no tax) with the proviso that it reverts to their children when the spouse dies and therefore avoids the 60% tax between non-relatives.

For movable goods, e.g. bank accounts, shares, etc. the parent can specify a "clause quasi-usufruit" in a will, which allows the spouse full use of the goods during their lifetime with the children inheriting the value of those goods, when the spouse dies.

If you google these terms you may find some more comprehensive information on this. And as with all things in France, the interpretation of how these things actually work is often dependent on the Notaire involved.

cyrian