French estate planning can be more restrictive than UK estate planning under the Napoleonic Code. The UK has testamentary freedom, but France has compulsory heirship. As a UK expat, you must plan ahead to pass your assets, especially French real estate, to your beneficiaries without a tax cost or legal issues and understand how the French probate process works. This blog discusses UK expat estate planning in France.
La Réserve – The Reserved Heir Rule
Your children are legally entitled to a certain portion of your assets as reserved heirs (héritiers réservataires):
- 50% of the estate is given to one child.
- 66.6% is given to two children (equally divided).
- Children receive 75% (equally divided) if there are three or more.
The only amount you can freely leave to a spouse, friend, or charity is the residual amount, or the quotité disponible. You can insert a Choice of Law clause in your French will in accordance with EU Regulation 650/2012 (Brussels IV). This may help you avoid forced heirship by allowing you to choose the law of your country (such as English law) to administer your estate.
If you or any of your children are EU citizens or residents, they may be able to claim a compensatory levy (droit de prélèvement) against French assets if they are disinherited under a foreign law, according to Article 913 of the French Civil Code. Here, specialist legal advise is important.
Succession Tax and Inheritance Tax
In France, inheritance tax (droits de succession) is paid by the beneficiary, not the estate, based on published French inheritance tax rates and allowances. Tax rates and allowances depend on the beneficiary’s relationship to the deceased.
- Spouses and civil partners: Fully exempt
- Children: €100,000 tax-free allowance per child (renewable every 15 years)
- Tax rates above the allowance: 5%–45%
- Stepchildren and non-relatives: Flat rate of 60% after a small allowance (approximately €1,500)
Property Ownership – En Tontine
This provision, which was included at the time of purchase, establishes a “legal fiction” in which the survivor is regarded as the original owner of the entire property. As a result, French forced heirship rules are effectively avoided for that specific property.
Société Civile Immobilière (SCI) is a French company that owns property. It turns property into shares. As shares are classed as movable assets, succession may in some cases be governed by the law of your habitual residence rather than French land law.
The Assurance Vie
A key component of expat preparation is the French life insurance wrapper known as the Assurance Vie. Money in an Assurance Vie is typically exempt from compelled heirship laws and outside the probate estate.
You can leave up to €152,500 tax-free per beneficiary (including stepchildren or non-relatives) if you fund before the age of 70. There is a combined €30,500 allowance for contributions made after age 70, but all investment growth is tax-free.
If you need help with French Probate, contact French Probate Matters on 020 8150 2010 or info@frenchprobatematters.com.
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