Tax Implications of Passing on a Property to one child

It is agreed within my family (two children, two step-children - all adult) that I should hand on my French property- worth about €190,000- to one of my children and not the others will inherit in different ways. In UK law (and I’m a UK resident) it is tax efficient to do this 7 years before you die. Does anyone know what the tax (or other) implications would be in France?

You need a notaire to give away property located in France, and you will pay tax for transferring ownership etc, but the detail depends on many things and particularly the blood relation to you.

This gives a broad idea, a direct child gets an exemption but only 15 years rather than 7

Fiscalité des donations en présence d’un non-résident fiscal français - Succession : Faire face - Cabinet Avocats Picovschi.

French property is subject to French inheritance laws. If you have two children, each one must receive at least a third of the value of your “heritage”, you can’t heave your French estate to just one child unless you have some other French assets that will balance the value of the property. You’ll need to set this all up with your notaire, who’ll advise.

Many of us are hopping that the 2021 codicil that enforced this will be overturned some time soon. We want to return to the previous position where British national could leave their assets according to British law. (Paying tax according to French laws of course).

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I don’t believe that to be entirely correct.

As of the date of writing (02/02/2025) Brussels IV still allows you to apply the succession law of your country of nationality (i.e. ignoring the reserved shares for children), but the 2021 provision means that a child who is left out of a will can make a claim for their share, but ONLY if they are an EU national or habitually resident in the EU.

As an example a UK national who was habitually resident in France (& dies there) can implement Brussels IV & it can only be challenged if their child/ren are EU nationals or habitually resident there &, even then, they have to make a claim. If the child/ren are UK nationals, living in the UK they cannot claim their reserved share.

This is how I understand it, but I’m always open to being proved wrong.

Sounds logical to me.

French inheritance tax still applies though, so as I don’t have a wife or kids my siblings are going to get lumbered with 35-45% IHT.

I think I shall spend it all myself before I pop off, they’re all richer than me. :smiley:

Sadly, that is true. We have significant concerns about my step children inheriting from me. We talk a lot about what are usually fruitless workarounds.

We are in discussion about this at the moment, and it’s not quite that simple. France looks at one’s worldwide assets, so despite Brussels V and even if no claim raised against the codicil can determine that a child or children have been unfairly treated.

And can then mess with French assets to redress the balance. And of course tax issues for second death can be swingeing.

Very bluntly I would now strongly recommend that anyone who has a recomposed family with disparity between the two sides should ABSOLUTELY NOT become resident here until this sorted.

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From my experience, if you’re giving away property in France, it counts as a “donation,” and they have a system where the tax is based on the value of the property and who you’re giving it to. If you’re passing it to your child, the tax rate is lower compared to giving it to someone else, but it still depends on how much it’s worth. France also has allowances for transfers to children, so that could help reduce the tax burden. The main thing to keep in mind is that if you make the gift more than 7 years before you pass, it can lower the inheritance tax for your other children, as long as everything is structured correctly. I’d recommend speaking to a notaire in France, though, just to make sure everything is done right.

We have no intention of favouring any one child/step child. Everything will be fair.

In my case the sound of the stable door closing whilst watching the horse bolting into the distance happened over 20 years ago :roll_eyes:

I think you’ve put your finger on it. The original question wasn’t about inheritance, I read it as being about giving house to one daughter now, with the others compensated through inheritance later. So somewhat more complicated.

That wasn’t the case when my wife passed away suddenly in 2013, luckily our Notaire deemed that what was in France was subject to French law and what was abroad was subject to that jurisdiction’s inheritance rules. Otherwise it could have been messy.

Then the “you can choose the regime” option came in and about three years ago I spoke to our Notaire again and agreed all that. Now it appears France is delinquent and has regressed from even the earlier position :roll_eyes: The sooner they are dragged into line the better.

But who knows, they might go rogue again before I pop my clogs. This EU membership is a Smörgåsbord attitude, where you pick and choose the rules you adhere to pisses me off, no matter which country is doing it.

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I’m sure that has the potential to be a nightmare.

Then the only possible hitch is that of reserved heirship. And again it may not bother you, but I am not at all happy about the possibility that I will only have full ownership of 62% of the house.

Again, this is not an issue as such for us.

Current thinking is for me to donate my share of the house to my wife, but have usufruit over the whole. If she predeceases me then (using Brussels IV to exclude me) the house then passes to her three natural children, plus some savings that are in her name only.

Then, when I die they get the house back to sell as theirs, dodging the 60% step child tax problem, but maybe suffer some capital gains tax.

If I can manage to keep the majority of savings in AVs with the step children as the second in line beneficiaries (see other thread) I reckon that’s a good as it gets.

A downside of the above is that I wouldn’t have the capital to finance a property elsewhere if I ever wanted to move, as the savings would not be sufficient.

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Yes, that is my concern plus the fact that it could be very contentious,

Do you say that due to your own circumstances/relationship with siblings/step kids/whatever?

Yes. I imagine in many families this wouldn’t be an issue as the various offspring would want to do the right thing by all parents even if not their biological parent.

However recomposed families where not all offspring are of a similar mind can be problematic.

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