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inheritance tax

Posted by george74-956178 - Created: 3 years ago
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10 replies (Showing replies: 1 to 10)

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Posted by tinabee - 3 years ago

mimi - the new law does not affect the tax

kanak - the inheritence allowances will depend on how the couple have set up their plans, for example, if they have arranged a French marriage regime, a donation between spouses, etc. Normally, on the death of the first spouse, in the absence of any plans, the children will inherit a part of the estate (with the allowances of 100,000 each). On the death of the second spouse, the children will inherit the remainder of the estate, again with an allowance of 100,000 each. This assumes the couple own property 50/50. Unless very specific plans have been put in place, the spouse will not normally inherit the whole estate as the children will inherit their share before the spouse, but you are right, there are no inheritance taxes between spouses,

I would imagine that if you write a will under English law, leaving your whole estate to your spouse, then the childrens' allowances would be as you describe - i.e. only one lot. So it really does depend on what inheritance plan you have put in place.

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Posted by Kanak - 3 years ago

tinabee,  I'm not an expert in this, but I thought if spouses give their estate to the surviving spouse, tax-free, then at the second death, all the children get the abattement from one parent, not getting the allowance doubled as in U.K.  Would like to think otherwise if anyone out there can confirm.

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Posted by mightymimi-923305 - 3 years ago

Fear no more George74.  Just read in the new Connexion dated Sept 2015 article titled New Succession law could be bonanza for the taxman, the following:  On August 17, the new Europeen succession regulation came into force.  ... is that the law of the state in which the deceased was "habitually resident" at death applies.  However, an individual can elect to apply the law of their nationality.

Hope this help

Mimi

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Posted by tinabee - 3 years ago

george74 - there are allowances for children inheriting from parents. The allowance before ANY tax is due is €100,000 from EACH PARENT per child. So the tax liability of your children will depend on how many you have and the value of your property. After these allowances, the taxes are levied in tranches starting at 5%. So for example, if you have 3 children, there would be no tax to pay unless your estate is valued over €600,000. If you are concerned about them having a tax bill to pay, there is a type of savings/investment account that you can open called an "Assurance Vie" which allows you to leave cash to your children outside of your estate, i.e. not subject to inheritance tax, so that they will have access to the money they may need to pay any inheritance tax. If you would like to read a comprehensive guide to French inheritance, and what planning measures you can take, have a look at this website.

 

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Posted by Reveuse-918439 - 3 years ago

Yes that is tough, but it happened because you are not the child=blood relative of the deceased, he was your uncle not your father, he did not beget you. If your uncle had had children of his own, you likely wouldn't have got anything, everything would have gone to the children. And if the estate was 400K and there were 4 children then in France none of them would have paid any tax. Whereas in the UK, there would have been inheritance tax to pay on a 400K estate no matter who inherited. It's a totally different system, it's all about keeping the estate within the same branch of the family, seems strange to us but to the French who've grown up with it, it seems normal. Fair and unfair doesn't come into it, the notaire has to do what the law says. I guess the moral is that your uncle should have planned ahead better, which is what george74 and sprossie are trying to do.

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Posted by NellP-986196 - 3 years ago

But mightymini, you are not talking about  children of the deceased, you are talking about nephews and nieces, the tax inheritance tax liability for nephews, nieces, brothers, sisters etc. is much higher than that for children of the deceased.  Have you inherited directly from a parent and experienced a high tax liability?  If you have, you should revisit the Notaire responsible!

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Posted by mightymimi-923305 - 3 years ago

Me again.  I don't know where this threshold comes about but let me tell you the rest of the story.

My aunt at her passing, gave her assets to my uncle, (our mother's brother).  He passed, they didn't have any children.  Notary was taking care of the inheritance.  A genealogist verified the lineage and discovered that my uncle and my mother had a half sister (my ex-grand father had remarried and gotten a child) who got a child, our half cousin that I or my sister or my uncle or anybody else on this side of the family knew or even met.  So The inheritance got slipt.  25% for me and my sister and 50% for him.  I questionned the rationale (there wasn't any) the law was that IF my mother or his mother had been alive they would have each received 50%, therefore my sister and myself get 50 (25, 25) and he gets 50.  That's the sick law.   Out of 173.000Euros, after tax chop, I get 20.000  YES you are reading right.

Mimi

 

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Posted by Reveuse-918439 - 3 years ago

A direct line heir would only pay tax at 45% on the portion of the inheritance that exceeds 1,905,677€. Everything between the 1K threshold and that amount would be taxed at lower rates, on a sliding scale.

Wow, that must be some inheritance, MM!

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Posted by kervéor - 3 years ago

Inheritance system and tax system are different ,now you use and English will BUT you are still taxed under the french tax system .There ways around it but the 15 yr rule comes into play .The age the person dies also comes into it.

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Posted by paul & nadine - 3 years ago

Sprossie,

You can leave you estate to your child using english rules about wills, but the TAX will still be payable under french rules. But the first 100k is tax free, for a child.