The rules of succession differ from country to country and what’s more, local inheritance tax rules and rates differ from nation to nation as well. One of the countries in which expatriates and foreign property owners often fall foul of the different and complicated laws is France – did you know that in France there is no IHT exemption over and above a 76,000 euro personal allowance for transfers between spouses upon death for example?
With the Institute for Public Policy Research estimating that around 200,000 British people already own property and remain resident in France full time, you can no doubt see how important it is to spread knowledge about how to protect your property in France from French IHT as a foreign buyer. In this article we explain the issues in further detail as well as the options open to all those with French real estate.
As stated there is a relatively modest exempt transfer allowed in France between husband and wife upon the death of the first partner…the allowance for children is even smaller at a current sum of EUR 50,000 and after that local French inheritance tax begins to be levied at rates varying from 5 to 40%.
If you are an unmarried couple resident in France with French assets you will potentially face estate duty upwards of 60%...so what all this goes to prove is that you need to shelter yourself from any local French IHT liability.
The good news is that inheritance tax is dubbed by many as ‘a voluntary tax’ – this is because in the likes of the UK and France you are perfectly at liberty to make use of any and all legitimate options available to protect you, your assets and your heirs from inheritance tax.
In France there is a method that some expatriates make use of that not only protects them from future French IHT liabilities, but which also protects them from the annual wealth tax that is also notorious in France. The method is to use a product called Assurance Vie which works like a personal portfolio bond and which can and should be put in place by qualifying persons before they become resident in their French property.
There are many local and international companies who can provide the tax and financial planning advice that you need if you own property in France or have French assets and taxation liabilities and so you have no excuse – protect your property in France from French IHT today! If you take out a mortgage in France from Barclays Bank they can advise you on your options for example, you can click here to be redirected to the mortgage enquiry form on their website.
