Jennie Poate from Beacon Wealth Management has kindly written this article for us regarding the 2015 inheritance changes in France.
In the UK, after a person has died, it is the estate that pays any “death duties” after an allowance and the beneficiaries receive the net proceeds, i.e. after inheritance tax has been paid. The use of a ‘will’ can enable you to leave your estate to whom you like.
In France, it is the beneficiary who must pay any tax due before being able to receive the bequest. The allowance before tax depends upon the relationship between the ‘giver’ and the ‘receiver’, or the deceased and the beneficiary. The closer the blood tie, the larger the allowance. Therefore a son or daughter would receive a tax free allowance of €100,000 from a parent but a step-son would only have an allowance of €1,794 before a tax rate of 60% commences.
This is a very different concept to our British way of thinking especially as there are strict Inheritance rules which govern who may actually receive your estate (known as the civil code). Currently children must inherit before the spouse (unless other legal instruments have been put in place) meaning that the spouse may not receive their fair share in the first instance. If you are a tax resident in France, your worldwide assets are assessable for Inheritance purposes.
Our mindset, is that we wish to be free to dispose of our assets to whom we like, and certainly our spouse or partner before the children. The most common difficulty is when there are children and/or stepchildren and the steps you know you can take to make sure all receive their fair share.
However, from August this year, a person may elect to use UK law to administer their estate thereby bypassing the stage where children inherit a share first. However please remember that French taxes will still apply.
The making of a ‘will’ in France or a ‘testament’ is normally done through a notaire but understanding what needs to go into a will to achieve your aims is paramount.
A seminar on this subject will be held shortly hosted by Jennie Poate of Beacon Wealth Management in the Vire (dept14) area so please check the website www.bgwealth.eu for details.
Written by Jennie Poate of Beacon Global Wealth Management.