Civil Partnerships and Property Ownership in France

Civil partnerships in France are called a Pacte civil de solidarité (PACS). If you are not married, they are indispensable to those buying French property, as they remove any liability to French inheritance tax between the couple in the partnership. However, they are only available if you are both single and resident in France, and those in a current civil partnership from the UK are not eligible. The recent case of a couple of Brit expats living in the Languedoc area of France has illustrated the Catch 22 of the present regulations. The surviving partner of a relationship of 31 years now faces a large bill for French inheritance tax, as the tax authorities are not prepared to recognise the UK civil partnership. The couple earlier applied to the French courts to enter a French civil partnership, but failed in their demand, as they were unable to bring proof of their single status. The French tax authority has now refused to grant exemption to the surviving partner for French inheritance tax, as they do not recognise the UK civil partnership. Several French and UK politicians have taken up the case, and there are murmurings from the French Government that they regard this as something of an anomaly, and that the law is under review. Indeed, the French Government have recently been forced to recognise the legality of a gay marriage of two Dutch males who were married in the Netherlands in 2002. They will now be assessed for income tax purposes as a couple, not as two single males. In the event of divorce or death, they will also be recognised as a married couple for tax purposes. France now appears in the rather odd position of recognising gay marriages from elsewhere in Europe, but does not permit them in France. By the same token, they allow civil partnerships, but do not recognise those of others! Even if the French authorities do see common sense and put the record straight, a French civil partnership does not grant automatic rights of inheritance. That is to say, it does not get around the entrenched inheritance rights of children, with the result that the surviving partner will share the property with any children of the deceased. There are various solutions to this problem, and probably the easiest would be to buy the property en tontine, which has the effect of transferring the whole of the property to the surviving partner. However, unless accompanied by other inheritance planning measures, the tontine clause deprives relatives of the first deceased of any rights to the inheritance. There are also other solutions, such as the use of gift or will procedures, or purchase of the property through a French property company. You can read more about these solutions in our Guide to French Inheritance Tax and Laws.