If I sell my home of 26 years here in France and divide the proceeds between my 4 children, will this be taxable in France. Two are British, one French and one Australian. I have been reading up on it but find it v complicated…..because it is probably. Grateful for any information. I know I would have to live another 7 years after sale to avoid IHT. …..I think!
Are you still living in France, Meggie?
Yes I am and managing fine. But I am now 80 and on my own. I have not the slightest desire to sell but if it starts to get too much for me or I am unable to get some help I may not have a choice. So I have to focus now and get educated on the ins and outs of it all. If I die here the children will inherit but then if I need to go into care here I will need to sell to pay for that. Too many what ifs going round in my head I have a flat in uk but have absolutely no desire to go back. Obviously need to talk to a tax person about it all but I just wanted some sort of steer.
If you live here and it’s your main residence you pay no tax or social charges on the sale of your house. Then if you have 4 children you can give them €100,000 each tax free, so it depends on what your house might be worth as to whether they would need to pay tax.
The same tax free amount applies if you die and this is their inheritance.
In terms of care costs there are quite a few things that you could be eligible for, and would not need to sell your home but the amount would be taken from your inheritance in due course. Why not ask to see an assistante sociale who will explain the care options and costs to you and hopefully reassure you!
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Thank you so much Jane. Your information has clarified certain aspects for me,should have known all this already of course but you just tally lappy along for years don’t you until you suddenly realise you are not going to live forever! I find it quite difficult without my husband to,sort this sort of stuff out but know I can do it You have been v helpful. Maybe I’ll just fall off a ladder checking gutters and not have to worry about any of it !
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As I’m sure you probably know, that’s actually a UK IHT rule. Broadly, provided you are not UK domiciled, (ie have lived outside the UK for more than 10 out of the last 20 tax years) and continue to live permanently in France, you shouldn’t have to worry about UK IHT on gifts to your UK based children (bar the point below).The UK rules on gifts do not apply to those taxpayers outside the UK IHT net - except for UK assets - see below.
Please don’t!!
What you do need to bear in mind is UK capital gains tax (CGT) if you were ever to gift your UK flat. You would potentially be liable to UK CGT, as the gift of an asset, even by a non UK resident, is treated as if you’d sold it at its market value. You would also be liable to French tax on any gain calculated in €, albeit could no doubt offset UK CGT against a French liability.
Finally you would be within the UK IHT net if you still hold the flat at the time of your death, subject to the availability of ‘nil rate’ tax bands (ie tax free allowances) and of course depending on the value of the flat. France will allow the UK IHT to be offset against your French IHT liability under the UK France IHT (“Estate duty “) treaty.
Hope this helps.
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Thank you George. Very helpful. Lots of thinking to do now. My flat is not worth a great deal and I would probably be nowhere near the threshold for IHT Depending on my savings etc of course. It’s all a bit of a minefield to me but beginning to understand it better now. Thanks again
You may be surprised to find it’s worth [a lot] more than you think. If you’ve had it for some years the inflation of UK property has surged in leaps and bounds.
Depends to a degree on what and where it is but you might do well to get some prices from agents locally and/or look up prices of similar properties on Zoopla https://www.zoopla.co.uk/house-prices/