This was a promise made during the Presidential election campaign by the new French President, Nicolas Sarkozy, and which has now more recently been confirmed by his Budget Minister, Éric Woerth.

The government has stated it is their intention that 95% of families will no longer be liable for inheritance tax.

Whilst this measure is going to be greatly welcomed by many international buyers, in reality less than 20% of families currently pay the tax, despite the often dire warnings made by international financial advisors.

Nevertheless, France remains one of the few countries that has a basic liability for inheritance tax between man and wife, and neither do they grant exemption to the family home in calculation of liability to the tax.

In order to escape the otherwise automatic liability between man and wife, it is possible for a couple to marry under a particular type of French marriage contract, called a le régime de la communauté universelle, with the clause, d’attribution intégrale. A foreign couple already married within their own country can also sign such a contract.

The contract operates to grant exoneration from inheritance tax between man and wife on first death, although it does increase the potential liability of their children following death of the remaining spouse.

Even if you do not use such a contract, there are inheritance tax allowances available between man and wife, as well as other family members, and it is possible to make tax-free gifts that reduce potential liability.

In other cases, it is possible to establish a company ownership structure for French property, through which potential relief can be created.

You can read more about French property ownership structures in our guide to Buying Property in France.