If Barry then leaves all their assets equally to his child and to Beth's child, the children will be taxed as follows: Barry's child 100,000 tax free. Bea and Barry are a British married couple. Otherwise, the surviving spouse retains all the benefits and owes nothing to the other heirs. I say go for it, you will sort something out, the main concern (I think) is that you and you spouse are provided for. The new section of law contains the following: When the deceased, or at least one his children, is, at the time of death, a national of a Member state of the European Union or has his/her habitual residence there, and when the foreign succession law does not know a mechanism with a reserved portion protecting the children, each child (or his/her heirs, or those who benefit from his/her rights) can use the assets which are located in France to obtain a compensation at the time of death, in order to benefit from the forced heirship rights which they have under French law, within the limits of these rights.. Anne, Hi Carol I agree with you, this is a very morbid subject. Bea and Barry have made wills, with a British law election, in which they leave their home to each other on the first death, and then to their younger son. Anneanne williams. To avoid this as far as possible, Beth and Barry should obtain professional advice before making their wills. I have a similar situation ith living with long term partner with her 3 children and as yet not sure ho that effects. You may (for example) be able to adopt your own child- however silly that may sound - in France. If the surviving spouse is a tenant of this accommodation, the rents are payable through inheritance, i.e. Under inheritance law in France, the amount set aside as the reserve is as follows: If there is one child, they receive 50% of the estate. Anything they inherit over this amount will be taxed on a sliding scale between 5% and 45%. This was then challenged in August, but the relevant section was not changed and the law is therefore due to come into force on 1st November 2021. However my concern is what happens to our daughters inheritance after we have both died, in the event that my husband dies last. From 1 November 2021, a new French law has come into effect which could well upend the estate planning of many individuals with assets located in France. So where: A child who does not inherit the amount dictated by the French forced heirship rules can request for compensation to be made out of the French assets to them. Hopefully it will be many years off yet, as she is only 9 at the moment. This is a topic with so many implications and could be discussed from now until judgement day. Cloudflare Ray ID: 7a9ed38dca55d6a6 Spouse Not a Protected Heir. If a will has been drawn up, you need to consult a notary to find out the share of proceeds for the surviving spouse. Required fields are marked *. If the house is bought in your name only,you can make a will:I believe it's called a Holographic Will, no doubt spelt wrong but someone will correct the info; which gives your husband the right to stay in the house for his lifetime,he can let it and receive the rent. In France the general position, for both French nationals and foreigners, for many years was that it was not possible to leave your assets freely in your will when you died. In any case, the surviving spouse is entitled to the free use of the accommodation occupied as the main residence and the furniture within the accommodation for one year right after the death. I believe we have worked too long and too hard to let that happen. In exceptional cases, if the accommodation is no longer suited to their needs, the surviving spouse can rent it for use other than commercial or agricultural purposes, in order to provide the resources required for another accommodation solution (retirement home for example). There is also,the important point that you have choices before you arrive in France. Following a health scare they decided to make wills. Thanks. Make sure you've protected yourself and your assets against every eventuality with our guide to planning wills and estates in France. I have two children in the UK from my first marriage. With reference to Waynes question, again I would suggest you look at that site, in particular pages 4, 9, 12, & 13 whichanswers one of your concerns. I don't think you should let this stop you coming to France, whilst it seems distasteful letting the government get 60% tax, hopefully your daughter will not be relying soley on this. The surviving spouse receives half of his property, and in-laws the other half as one quarter for each. At the end of July 2021, a bill was passed in France making changes to Article 913 of the Civil Code. This affected British nationals who owned property in France as they did not have the freedom to leave their French property in their will to whomever they wished. We can therefore expect a period of delay and uncertainty which is likely going to be difficult for families. As it's 8pm now here in Australiaand I've had a couple of glasses of red this might not all make sence, my apologies. We have stepchildren, we changed our marriage regime to that of Communaute Universelle, similar to the Tontine clause but leaves no tax to pay for the surviving spouse. Given the number of people moving to France and a big percentage of them in second marriages with stepchildren. Others will explain the mechanics of this, I'm sure, but this reply will bump your question back up the listings. Funnily enough it is a law designed to help men buy houses for their mistresses!!! We have opted for the Clause Tontine but the step parent MUST make a will passing all to his/her step child otherwise French law will only see the step child as a 'stranger' and the estate goes to the nearest natural beneficarie eg a Mum or dad etc. So we are in the process of preparing information for him. They have been married for 20 years and each have a child from a previous marriage but have no children together. They wish to leave all their assets to one another and then to their children equally. Be the first to knowabout the latest news, Site created with the supportof the Banque des Territoires, Bureau de gestion des carrires des notaires, The main areas of intervention for the notary. The inheritance tax in the UK has also become a bit of a racket, with the waste majority of homeowners now being drawn into the threshold of 263000. The reply I have from the UK lawyers states very clearly, that under all circumstances a step child will always pay a flat 60% tax on world wide assets. This is because the law has traditionally considered that the estate of the deceased belongs to the whole family, rather than any single member of it. Last but not least, the surviving spouse can claim a pension from the heirs, theoretically during the year of death, if need be. A road we went down to try and get around some of our very similar problems was as follows;- With regard to inheritance from a parent living in England. the other heirs. For more information or to discuss how this law may affect you please contact: international@stoneking.co.uk. English and Welsh law does not contain a mechanism that reserves part of a persons estate for their children. French Inheritance Laws - Rights of the Surviving Spouse. Tags: French IHT, french inheritance . However, the couple have heard that doing this might be very tax inefficient. Having just read all that is involved in setting up a company to buy property and all the pitfalls associated with it, again refer to the "frenchentre" site which I mentioned at the beginning of this posting. It is also highly likely that this law will be challenged on a European level as it appears to directly contradict the terms of the EU Succession Regulation. This is one of my worries, especially as she is so young at the moment as to what would happen to her if - god forbid it ever happened - both her parents were killed. With regard to Mikes sugestion that we adopt in France, that's an interesting idea which I will look into, but feel that you would only be allowed to do that overthere if you were a French person born there. Still open to and looking forsugestions. Anne, as Jill says, your best option still remains to set up your own company, in France, Australia, Britain or wherever. Hi. Therefore, you will need to ask your notary to analyze the situation before making any final decision whatsoever. As explained in our previous article, because Beth and Barry are English, they can elect for English law to apply to the succession of their property in France. Since 2001, the surviving spouse is treated as a genuine heir except, of course, if there has been a divorce or legal separation. the latter gets either the usufruct of all the deceaseds entire property (which means the right to '' use the assets or receive the income), namely ownership of the quarter, depending on his/her choice. There must be people who have experience of this, and given the number of members on Anglofile I would have thought several who have made arrangements to cover this eventual event. This right of use and residence is deducted from the inheritance share, which is collected through full ownership by the surviving spouse. This means that a British couple, most closely associated with England, can choose British (English) law to apply to their French will. Just on a lighter note and reading the last posting again. Which was why I suggested your husband may be able to adopt his step-daughter in France, as the regulations may be different. It would seem that in France a step-child has very little right of Inheritance. The effect of this is that they can leave their French home to one another, and then to their children on the second death, if they wish. We are still hopeful of living in France and simply ask that anyonewho has haddealings with this law, and been given any satisfactory advise pass it on. On a slightly different way of looking at the problem, does anyone have views on buying the property in our daughters name.? The spouse cannot be totally deprived because, in the absence of descendants, he is himself the forced heir for 1/4 of the succession. Anything over that tax free allowance (subject to exemptions and allowances) is taxed at the flat rate of 40%. Also I have consultedtwo lawyer in the UK both dealing in French law,albeit only by email. It should be noted: the rules set out above are only valid in the absence of a will, which is made by the deceased person. Since 2001, the surviving spouse is treated as a genuine heir except, of course, if there has been a divorce or legal separation. Because Bea and Barry live in France their estate planning will be affected by the changes to Article 913 of the Civil Code. But if you set up your own company doesn't that mean that you will automatically have to start paying earnings tax? However if you do buy with an SCI, the company is the owner NOT you. Here the people refer to themselves as Ski's--------Spending the kids inheritance. This is not what the couple wished, as Beths child will receive substantially less than Barrys child after tax. The best thing to do is to form a French company specifically for house purchase - an S.C.I. Important Change to French Succession Law, The deceased was habitually resident within the EU or a national of a country within the EU; or, One or more children of the deceased was habitually resident within the EU or a national of a country within the EU. Amy and Andrew are a married British couple. A German Notaire who stayed with us last year, told of the scenario in Germany where 50% goes to your dependants and the rest you can do with what you like. However, the survivings spouses agreement shall be required to convert the usufruct relating to his main residence but also the furniture in the accommodation. Thank you Anne, Hi, and thank you so much to the people who took the time to reply. The next scenario in the series will look at issues that can arise when you do not want your children to inherit your assets. They each have 2 children from previous marriages. I have lived in France for nearly 20 years andhave helped several people with this same dilemma. Your IP: There is no threshold as there is with a blood relative. Good luck! This tax rate does not change if you leave your assets to your children, step-children or friends. Still living in hope. You can still make a will electing for English law to apply to the succession of your estate and your children will not be able to claim compensation using Article 913. However, any challenge and its outcome could take several years to be concluded. Indeed there may be a period when you are no longer there and not yet here, this is referred to as a 'taxplanningopportunity' by the experts. If so, perhaps she should be offered legal advice so as to know that all three children would inherit equally but it would be left up to her to make that arrangement if she continues living in France. The younger son has suffered from poor health for many years and is in a financially precarious situation. For example, if I die first (I am the natural mother), then on my husbands death our daughter will be taxed at a flat 60% on all that she inherits and this includes our world wide assets. We have been here since April and really love it but have been given some real duff advice by some well meaning people l'm sure! Balance taxed at a flat rate of 60%. If the value of this right is lower than the share of the inheritance, he is entitled to a supplement. They have two sons. Perhaps it's time that Brussels looked into this extremely discrimatory law and stopped worrying about silly things like how much meat the British use in their sausages!. Beth and Barry Brown are English. secondly can any one advise if you inherit from your blood parents what are your tax liabilities in france? French laws are very complicated and I am in the same boat as you virtually. The surviving spouse inherits everything, however with the exception of the property that the deceased had received through donation or inheritance from his ascendants (parents or grandparents) and which is still part of the inheritance. Our property was purchased with the "tontine" clause. She owns a chalet in the French Alps. Please include what you were doing when this page came up and the Cloudflare Ray ID found at the bottom of this page. You can then leave the shares in that company to anyone you like. At times he shall inherit alone, sometimes he shall be in competition with the children of the deceased or members of his in-laws. Further to this, you may want to read about adoption simple (AKA adoption fiscale) here: Note that, if adopting your spouse/partner's offspring, the age difference between the adopter and the adoptee need only be 10 years, not 15 years. the heirs. More on this can be found elsewhere but it does mean that nobody has to pay this Inheritance Tax. Regards.35. gastines. Is this likely to cause even more headaches? No matter which way I look atit I find the tone more than a little condescending. This used to be standard practicesince French succession requirementsgenerally invalidated any wills elsewhere. Thank you for the replies to my question. Or adopting a French person, still worth looking at. Given the number of people moving to France and a big percentage of them in second marriages with stepchildren. 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