Hello Stella, your suggestions make sense but not an option for me.
Regards, Ian
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Would selling it as a viager work? That way you still keep living there all your life, however long that is, and you receive cash but the property is no longer part of your estate so rigid succession rules do not apply.
Notaires know this stuff and yours could probably say immediately if this could achieve what you need to.
Isn’t that usually recommended for people who are property rich but cash poor, and have no desire to leave anything to next generation? Interesting if it would work in other contexts?
A friend of mine tried to do this with his house in our commune. There were no buyers. He was told it was the location, too rural. Good idea but may not work for the above reasons.
Ian
I’m joining this conversation late in the day, Ian - sorry. Some interesting concepts, as usual. The problem with any crafty solution (like adult adoption, or even en tontine **) is that when the time comes, the Impot will simply over-rule it, as an obvious tax dodge mechanism. In my 25 years living in France I have come to recognise two things: 1] Go with the (inheritance tax) flow; and 2] Only use the very limited alternatives available - if they suit you.
The first of these ‘limited alternatives’ you have already started on - you have put funds into an Assurance Vie. You will therefore already know that you can set the fund up with whichever beneficiaries you like. There is no tax taken, even if they are not a direct line inheritor. This would seem to be the best route for you to go down now - even if, as in Stella’s example, you have to sell up to free the money to invest, and live in a rented property from now on.
Secondly: you can put your house (assuming this is your main assett that you are concerned with) into a limited company ownership - an SCI, with your chosen successors as the owning directors, including yourself. On your death you cease to be a director; and they can do what they choose with the property - rent it out, live in it, or sell it. They would share it according to the shareholding that you had predetermined. It is not covered by Inheritance Tax, but other, smaller, taxes would apply to a company disposal.
I’m sure that it is hard for you to have to focus on such things at this time, Ian - you tried to plan ahead, but events have overtaken you. A warning to us all!
With my best personal wishes, Michael
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Thank you Michael, a good bit of info there. There is an assurance Vie in existence so we did something right. It isn’t a huge one but will help come the time. My bank manager said don’t tell the Notaire about it. It’s nothing to do with them. Wow, ok but too late, he knows.
With our situation we were advised to buy en Tontine. We did and I have to deal with that. The tax thing is a foregone conclusion unless we take the company route. The beneficiaries don’t speak French , mine is limited. I don’t think they would cope with the intricacies of it. I spoke to my step daughter last night and asked her if they, her brother, would want to keep the house for family holidays. I don’t believe they would and that is , I think not really an option… It’s fairly rural, not much to do for children.
My head is spinning with it all. Hopefully get a better idea when I see the Notaire again.
Thanks again,
Ian
Take your time, Ian . . . wait 'till your head can stop spinning . . . nothing needs to be done right now, all in good time. I assume that I can see both of you in your little photo, you old fox! Sad and worrying times - but the start of a new phase, of course. Courage!
I understand your concern about your family not speaking French. But don’t overlook the fact that there are many people out there, small businesses, some of them, who will hold the necessary hands, and do everything necessary. It will cost a few hundred euros, but can be well worth it.
So - I would also have to say that you should take good care with your notaire. Sometimes they can be very constructive and helpful - I don’t know about yours, obviously. But never forget that they are paid by the State to be tax assessors and collectors. They are consequently not expected to tell you how to avoid tax.
My suggestion is that you should firstly concentrate on getting wized up on the potential benefits of your Assurance Vie. The fact that you already have one is good news - you can add to it - and take out additional ones if that fits your needs (They are aggregated together for tax purposes). If - hopefully - you took out your existing one before you were 71 years old, that’s great news from a tax point of view!
You need to get some professional input - why not start by making contact with SF’s highly knowledgeable and non-bullshitting Fabien? You’ve already been told that old adage about ‘don’t tell your notaire’! Why do you think that blind donkey is still doing the rounds?
Think of it another way - I’d suggest that you delay seeing your notaire until you have the necessary knowledge to be able to tell him what you want to do.
Concerning Insurance, not inheritance as far as I’m aware.
We are seeking advice from UK solicitor that specialises in cross border succession as the beneficiaries are UK based.
Thanks, Jane - I was referring to advice concerning the intricacies of an Assurance Vie. It’s a life insurance, as I know you appreciate.
I have respect for Fabien, but Assurance Vie is a long term investment not insurance and I don’t believe it is something he deals in. So really best to take advice from a professional in that field.
Re the Notaire, i don’t think it will be anytime soon. It’s taken since July to sort out the French bank. I do business with Fabien, good man and on the ball. I’ve been a client for a few years now, house, contents, motor and health.
I will glean info where I can. It’s hard when you don’t have support/ input after all the years. If I had died first I don’t know how she would cope. She didn’t even use her bank app !!!
I’ll look at it later was the reply.
Thanks once again for your knowledge and suggestions.
Ian.
I’ve been looking into AV’s lately, and the more I study them, the more complicated they seem to get. There are various options to be considered, e.g. how much of your money goes into shares, whether you want it managed, etc. All this costs money in charges. The basic return on the non-invested part is less than from a livret A. There are online AV’s that have less charges. I wouldn’t take the first best offer from your home bank. A comparison site like moneyvox.fr can be useful, and even then, an AV that’s been good in the past isn’t guaranteed to be good in the future, and once your in it’s not so easy to get out.
One golden rule of investing is don’t just invest in something because you can save tax by doing so. The investment should be a good one even without the tax break.
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This is precisely why I’ve avoided them and just bunged our savings in boring old comptes à terme. Much to our bank conseiller’s horror.
I really cannot be a*sed with AV.
I take your point on AV’s. One my wife had was very poor in returns. The larger amount one is slightly better. We took them out to negate the 60% tax liability for my wife’s children.
Bottom line? A nightmare.!!!
We are not good with financial things as it bores us. But the one thing I have grasped is that diversification is good. So yes we have AV’s. A Prudential one in sterling but which meets all French requirements, and one from the ‘union notariale financière’ which was done in conjunction with our notaire. I have more trust in him than my bank! Not brilliant performers, but plod on in the right direction.
Interesting - I might be asking you more about that at some point, if I may. 
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Of course, because they get good commission for “selling” them. Comes out of your return.
Yup. Our conseiller at the Soc Gen dumped us because she was so incensed at our failure to follow her « advice » (for which read sales patter).
Most of our worldly (financial) goods are in AVs, with mixed results. We’ve gone for fully managed,.100% invested in the markets AVs (ie no cash deposits). We also wanted to diversify providers so have allocated 85% to bricks and mortar traditional bank managed AVs, and 15% with an online fintech.
Performance wise, the bank AVs have been poor, with high charges and disappointing results. Today, by coincidence,is the first day in 3 years that our investment has broken even, and it’s taken record stock exchange highs globally to do so (the bank took an incredibly over- optimistic view of China, and was far too overweight in Chinese stocks ). By contrast the fintech, with far lower charges, despite being fully managed, has produced very satisfying returns.
Is this not one of the basic rules of investing that, no matter how well the underlying investment does, high charges will kill the return? Edited to add: That sounds a bit more teaching granny to suck eggs than I intended as I’m sure you’re well aware about charges.
I’m just looking at AVs for when we become properly resident so would be interested in any experiences.
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