Home Finance Taxes Inheritance and estate taxes in France
Last update on June 25, 2020
Written by Valentine Sergon

When does French inheritance law and inheritance tax in France apply to your assets? This guide explains French inheritance rates, plus new inheritance laws for non-residents and foreigners.

Once you become an official residentretire in France, or buy French property, you will need to consider if French inheritance law and French succession laws apply to your assets. In some cases, foreigners and non-residents can choose the law of their country of nationality to apply, although there can still be some restrictions on how you can divide France-based assets under French succession law.

This guide explains the rules of French inheritance law and whether inheritance tax in France applies.

French inheritance law and succession rules

French inheritance law derives from the French civil code and operates a residence-based system regarding inheritance law, meaning that French inheritance law applies to all French residents regardless of nationality.

Family life in France

Contrary to laws in most English-speaking countries – typically allowing assets to be left to anyone you choose and, if there is no will, spouses inherit over children – French inheritance laws practice forced heirship, protecting the direct line of descent – that is, children, grandchildren, and parents. Traditionally the intent was to protect the family, for example, to stop an unscrupulous outsider from coercing an elderly person to disinherit family members, although more than half die without a valid will.

Inheritance law on pensions in France

The intersection of inheritance law and pensions is complex and depends on a number of factors and is not automatic. This becomes even more complicated if the deceased was receiving a pension from another EU (or non-EU) country. The tax stakes can be high, so be sure to consult expert professional advice so that you do not end up making costly mistakes.

Inheritance law restrictions

French inheritance law is restrictive and forced heirship applies to children. So, irrespective of the specifications of a will, a certain proportion of the deceased’s estate (called the reserve) must be set aside for children, or the spouse if there are no children. After this, the remainder can be distributed freely according to a French will.

Children can renounce their right to a French inheritance, if done in the presence of two notaries. However, this cannot be revoked after the parent’s death.

Under inheritance law in France, the amount set aside as the reserve is as follows:

  • If there is one child, they receive 50% of the estate.
  • With two children, they receive 66.6% of the estate between them.
  • With three or more children, they receive 75% of the estate between them.
  • If there are no children, then the spouse can claim 25% of the estate.

Spousal rights and restrictions

According to French inheritance laws, a couple needs to be married at the time of death for the spouse to be legally entitled to their share as part of the reserve. Unfortunately, if in an unmarried partnership, a civil union or divorced in France, the surviving spouse will have no predetermined legal right to a share of the estate. However, a recent change in French inheritance law now grants survivors in civil partnerships the right to reside in the family home for up to one year after the partner’s death.

Marital regimes

The rights of the spouse under French inheritance law depend on the marital regime chosen by the couple when married in France:

  • If the marital regime is en indivision (property purchased during the marriage is co-owned), then a surviving spouse retains their 50% share and the remainder forms part of the deceased’s estate and is subject to forced heirship rules.
  • If the couple opt for communauté universelle marriage, any jointly owned property is considered community property. This means that the surviving spouse is the sole surviving owner and forced heirship doesn’t apply, unless the deceased has children from a previous marriage.
  • Another option is to purchase property in France en tontine, which means that the whole property is transferred to the surviving partner.

Beyond the above French inheritance restrictions, a person can leave the remainder of their estate to whomever they wish by writing a French will.

What if there is no will?

If a person dies without leaving a will, then French rules of intestacy apply. This means that the estate is divided between surviving children and spouse accordingly. The spouse can choose either outright ownership of their share (minimum 25%) or life interest (usufruit) in the French property (the right to use it throughout their lifetime). In these cases, ownership of the whole estate splits between the children.

Spousal situation

A spouse’s use, rental, and enjoyment of the estate (usufruct) doesn’t mean they can touch liquid assets belonging to the children; however, they are permitted to live in the family house until their death when any children would inherit it outright. However, a judge might intervene if adult children wouldn’t get their inheritance for too long a time. If the children are minors, the surviving spouse must apply to a court to sell any assets or administer the children’s share.

While largely a formality, a spouse may have to communicate with a judge to demonstrate they haven’t absconded with the children’s inheritance. A judge may also prohibit the guardian of the children from using their inheritance to pay for care, meaning parents might be forced to borrow money to cover their family’s finances while investing children’s inheritance until they became adults.

Succession

In cases where children have died and leave behind grandchildren, French inheritance law allows grandchildren to inherit the same rights. If there are no children or grandchildren, then the deceased’s parents are entitled to 25% of the estate each, with the remainder going to the spouse. In cases of civil partnership, cohabitation, and divorce, the surviving partner or ex-spouse has no entitlement to the estate of the deceased unless a will stipulates otherwise.

If there are no children, grandchildren or spouse, the order of succession is:

  • parents (25% each);
  • siblings;
  • nieces and nephews;
  • grandparents;
  • uncles and aunts;
  • cousins.

French inheritance tax

Once you are an official resident in France, all your assets worldwide can be subject to French inheritance law – except real estate owned elsewhere. This is because foreign real estate is generally subject to the inheritance laws of that particular country, unless stated otherwise via a will.

If a child aged under 18 inherits property in France, French inheritance law states that no debts must be pending on the property (including mortgage reimbursements).

Inheritance tax rates

French inheritance tax rates depend on the relationship status to the deceased. In fact, inheritance tax is partly why the French are concerned with carrying life insurance, or assurance décès, particularly if inheritance will go to a non-blood or distant relative. You can take out multiple policies for various family members, your children, a friend, or a lover.

Current French inheritance tax rates and allowances are below:

Spouses

Married couples and those in civil partnerships are now exempt from paying inheritance tax in France.

Parents, children, and grandchildren

  • Tax-free allowance: €100,000
  • 5% tax up to €8,072
  • 10% on €8,072–€12,109
  • 15% on €12,109–€15,932
  • 20% on €15,932–€552,324
  • 30% on €552,324–€902,838
  • 40% on €902,838–€1,805,677
  • 45% over €1,805,677

Brothers and sisters

  • Tax-free allowance: €15,932
  • 35% tax up to €24,430
  • 45% on more than 24,430

Other relatives up to the fourth degree

  • Tax-free allowance: €7,967
  • 55% flat-rate tax

Remote relatives and other beneficiaries

  • Tax-free allowance: €1,594 (€159,325 if disabled)
  • 60% flat-rate tax

Estate tax in France

French property law recognizes ownership according to the named person on the title deeds; this means you need to register your property after buying a house in France to have it included as part of your estate. With property jointly owned by a married couple, they must decide whether they co-own the property (50% share each) or if it’s under community property (where the surviving spouse maintains ownership of the entire property).

Inheritance tax on real estate in France generally falls under the normal tax bands listed above. Depending on the value of the property and on the relationship between the recipient and the deceased, the corresponding amount of tax allowance will be provided.

Gifts under French inheritance law

Assets that are given as gifts during someone’s lifetime are subject to similar rates to French inheritance tax rates, and are offset by similar allowances. The main difference is that there is no exemption from gift tax between spouses/partners, although the tax allowance on gifts between spouses/partners is €80,724.

Tax-free gifts up to the designated tax allowance can be made once every 15 years. In fact, the 15-year period needs to have expired for the gift to be excluded from the estate of the person giving the gift. In other words, if you gift someone an asset within the tax-free allowance and then die before the 15-year period has passed, it will be added to the value of your estate for French inheritance tax calculations, plus some other tax costs may be incurred.

Paying inheritance tax in France

When the deceased passes on, it will take some time for the banks, insurance agencies, and relevant government agencies to get an accurate understanding of the assets. You have six months to submit a declaration to the tax authorities, though you can usually get an extension if the deceased lived outside of France. The government can then contest the numbers behind the declaration and tax calculation. If they don’t, you should pay the tax as soon as possible, but tax authorities may allow deferred payments for five to ten years, depending on the relationship to the deceased. If, however, more than half of the inheritance is in liquid (cash) assets, you must usually pay the tax within six months.

No matter your situation, the smartest decision you can take is to employ a licensed estate planner to guide you through the process.

Double taxation

If inheritance law in France applies to your estate, then French inheritance tax will be levied on all worldwide assets if you are a French resident, or on assets only located in France if you are a non-resident.

In some cases, this can lead to situations of double taxation (where assets are liable to tax in two different countries). Fortunately, France has tax treaties with several countries, including the UK and the US, to avoid double taxation. A list of French tax treaties is available here and instructions on applying for an agreement. Read more about taxes in France and how to file a French tax return.

Reducing your inheritance tax in France

Whether (and how) you can reduce the amount of tax you owe on an inheritance is highly specific to your situation and relationship to the deceased, as well as myriad other factors than cannot be generalized. So, do yourself a favor a get a good estate planner to walk you through it all and to minimize the amount you pay in taxes.

French inheritance laws for non-residents and foreigners

If you are an expat living in France with EU citizenship and want the inheritance laws of your country of nationality to apply rather than French inheritance law, you need to express this clearly in a will or separate declaration. Generally, these laws will then apply as long as they don’t contravene local public policy (e.g., discrimination of heirs based on gender or whether born out of wedlock).

The EU rules do not apply to the following matters linked to your inheritance:

  • Inheritance taxes
  • Your civil status
  • The property regime of your marriage/partnership (how your property should be divided after the death of your spouse/partner)
  • Matters concerning companies

French inheritance advice

With numerous aspects and changes to French inheritance law, it is important to seek professional advice for your individual situation. Certain allowances have been gradually added to French inheritance law which can be of benefit, for example:

  • The heirs of a property don’t need to agree unanimously to administer the estate, for example, a decision to rent out an inherited property; the sale of an inherited property still requires unanimous agreement among the heirs.
  • A marriage contract, régime de marriage, can be changed without court approval with the consent of adult children (except in the presence of minor children). Such changes are sometimes made to change a spouse’s status in terms of legal claim to the estate.

Important inheritance vocabulary in French

  • Inheritance in French: l’héritage
  • Tax on inheritance: l’impôt de succession
  • Inheritance law: loi sur les successions  

Useful resources