Succession law is probably one of the most contentious rules for the British moving to France, as it seemingly infringes on our right to leave our money to whoever we choose. We asked Robert Kent at Kentingtons, the professional tax and financial advisors in France for British expats, to explain succession law and it’s potential problems.
What is succession law in France?
France uses Napoleonic law that ensures that the family is protected and that money from the parents should filter down to their children. Children are deemed “reserved heirs” and must inherit a percentage of their parent’s estate on their death. This law forms part of the French constitution, and these rules have significant importance and can be difficult to get around, although there are ways to do it.
Succession law is especially problematic for those with children from a former marriage, with the stepparent being left to battle with their stepchildren to hold onto the house and home.
What are the rules for inheritance for children in France
The amount of the estate to be left to the children is as follows:
1 child = one-half of the estate
2 children = two-thirds of the estate
3 children = or more three-quarters of the estate
The remaining fraction is unreserved and may be left to anyone the donor pleases.
To be clear, it is only that part of the deceased’s estate. So if the deceased owned half the property and there was one child, it would be half of the half, therefore only a quarter. This means that in many cases, it does not give the child control of the property – but it is their right to demand their share on any sale.
Can I choose who I leave my money to in France?
For those who want to choose where their money goes, there are solutions. However, there is some planning involved. Ideally this would be done before buying property in France, but it isn’t too late to do it afterwards.
It is usually possible to leave the surviving partner the right of use or “usufruit” of a property. The “usufruitier” can live in the property and make any alterations they wish. They may even rent out the property. However, on the sale of the property, the children will generally have the right to their share.
If this isn’t what you want, then beware that a little information can be a dangerous thing. Sometimes people copy each other’s solutions, but this doesn’t always work. Generally there is a different solution for every situation.
The worst thing you can do is nothing. The only safety net for those who do nothing is the “right of living and right of use.” This literally means you have the right to use the property. You have no rights to do anything to the property, or even rent it out, without the children’s agreement.
Can I avoid the law of succession issues
It is possible to reduce or even eliminate succession and inheritance law issues in many cases using either legal or investment techniques or a combination of the two.
This article provides a basic understanding of the French rules. However, there are regular changes in European legislation. As Europeans and UK nationals, you may have the option to simply opt-out of French inheritance rules and request that UK rules apply to your assets instead. This can be achieved by merely amending your French Will to reflect your wishes. This law (EU 650/201) was passed on 4th July 2012 and came into effect on 17th August 2015. However this being France, it isn’t always as cut and dried as this, for instance if one of more children are EU residents, this may impact the ruling.
It is vitally important to understand that this law does nothing at all to avoid inheritance tax in France. You still need to plan for “Inheritance tax” as Brussels IV deals only with success law. Brussels IV will not help you avoid French inheritance tax rates which can be up to 60%. And it’s no good looking up information on the internet or asking friends, to be absolutely certain in this highly complicated aspect of succession and tax, professional advice is the best way to make sure you plan effectively.
By Robert Kent is a senior partner at Kentingtons, experts in French succession law. Kentingtons offer a no-cost, no-obligation discussion about individual situations. See their website for details: kentingtons.com
The information on this page is intended only as an introduction only and is not designed to offer solutions or advice. Kentingtons can accept no responsibility whatsoever for losses incurred by acting on the information on this page.