Inheritance Laws in France - France Has The Toughest Inheritance Leglislation in Europe

A recent study carried out for ‘Le Monde’ newspaper confirms France as having some of the toughest inheritance laws in Europe. Not only are is your right to freely dispose of your property more restricted, but there are fewer concessions on your liability to inheritance tax. Unlike many other European countries, in France there is no automatic exemption to the surviving spouse against inheritance tax. Thus, in the United Kingdom, no tax inheritance is payable between married couples. Neither do other countries recognise the notion of ‘reserved inheritors’ as is the case in France, under which children of the relationship have entrenched inheritance rights. Nevertheless, despite outward appearances to the contrary, only 4 out of 10 inheritors in France pay any inheritance tax, and there are steps that can be taken to circumvent the laws. Thus, a married couple buying in France would normally best be advised to sign a French marriage contract called le régime de la communauté universelle, which grants exoneration from inheritance taxes on first death. Alternatively, if you buy a property with a mortgage, then any residual debt in the property is set against inheritance tax liability, and it is also possible to grant tax-free gifts to your family (or others) during your lifetime, which reduces liability to the tax. You can also buy through a property company, called a Société Civile Immobilière (SCI), from which it is possible to create fiscal advantages. Indeed, if you are a non-resident owner of property in France through an SCI, whilst you do not escape liability to inheritance taxes, you can freely dispose of the property as you wish, without the constraints of French inheritance laws. You can read more about property ownership structures in France on our pages on House Buying in France.