Inheritance tax France and UK

I am resident in France but I also own a house in the UK. I’m single with two children. But I also brought up my grandson (both parents still living but were unable to do so). I always wanted to leave everything equally to the three of them, but always understood that French law means my grandson would have to pay 60% tax on the value of the French property. So I thought I’d just leave him a third of the English property. I’ve now been informed that even if I elect to have my English will dealt with under English law, my grandson will still have to pay 60% of his inheritance to the French tax office. Can that really be true? It is grossly unfair if so!

You should be able to gift it to him as a donation which won’t attract tax in France as far as I remember (but will attract cgt in UK).

You can give grandchildren 31k free of tax every 15 years while you are alive, and I think another 31k by a donation. Once you die only 1500 is free of tax, but I think there is a sliding scale of tax so not 60% if only a small sum.

So yes grossly unfair. On another thread somewhere there was discussion that you can do a simple adoption of adults in france, which might be worth looking at as a way round this especially if yiu brought this boy/man up.

I think you can also put the house in a UK trust for the three of them, and that might bypass french IhT. The french tax people hate trusts, and see them as tax evasion but I was told if it relates to physical property they will accept it.

Take professional advice!

Hi Harriet

The Law is quite clear and not unfair… even if you might not be happy about it. :thinking: :upside_down_face: :wink: :wink:

I suggest you go to a Notaire and explain what you want to happen and ask advice on how to achieve this without too much IHT…
Discuss gifting etc… examine all avenues…

then you can make an informed decision on how to proceed.

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You can adopt adults here but I think they have to have French citizenship.

Thanks Vero

Thanks Jane. I will look into these things.

Thanks Stella. The reason I think it’s unfair is that I pay tax in the UK on the income from the UK house, so don’t understand why the French tax office has the right to charge IHT on it. In any case as you and others suggest I will explore all avenues.

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Thanks Tim. I check this out.

Being a “foreign” French Resident does sometimes bring in a conflict of ideas of what is fair and unfair… :upside_down_face:

If you were Resident in UK… would this “second home” be liable to Death Duties … presumably yes, according to where the Total Estate came on the sliding scale of things… :thinking:

French Inheritance Laws are quite strict, so it’s quite a plus to be able to leave “whatever” to whomever we please by invoking Hague Convention…

Your Notaire will be able to look at all the angles…

good luck.

What I think is fair is that I pay less income tax in France than I would in the UK… now, that’s a real living bonus!
Most if not all of the seriously rich people I know all say that they will leave nothing to their heirs. Saves all the squabbling by the graveside and makes them go out and earn their keep rather than just wait for a fortune to be handed to them…
I think it’s called skiing :relieved:

Our daughter has simply asked that we don’t leave her any debts…


Hmmm, maybe but be careful not to confuse with… (courtesy of urban dictionary) “I can reveal that skiing is in fact a series of increasingly complicated and grubby sex acts. It turns out that skiing is essentially an extreme sport version of the the Kama Sutra. Get ready to learn some things you’ll never be able to unlearn… “. I won’t quote more on this forum as might put people off their dinner

No. The adopter has to be at least 28 and at least 15 years older than the adult adoptee. Those are the only conditions.