One of the biggest surprises for UK citizens inheriting French assets is how inheritance tax is collected. In the UK, inheritance tax is generally paid by the estate before assets are distributed. In France, however, each beneficiary is personally responsible for paying the tax due on the inheritance. If you inherit a French bank account or property, the tax liability falls on you. Here are some tips for navigating the French system in 2026.
The Scale of Progressive Taxation
France employs a progressive banded scale rather than the UK’s flat 40% rate (above the nil-rate band). This implies that your tax percentage will increase as you inherit more. At the moment, these rates for offspring and direct descendants vary from:
- 5% of the first €8,072
- progressively raising to 20% for sums up to €552,324
- 45% maximum for inheritances over €1.8 million
You can review the current rates on the French government website under the official French inheritance tax scale.
The €100,000 Allowance
The substantial tax-free allowance is the “good news” for parents and children who are direct descendants. Each parent may leave €100,000 to their child tax-free.
It is important to note that this allowance “refreshes” every 15 years. If a parent passes away more than 15 years after making a lifetime gift, the full €100,000 allowance may be available again.
The 60% Warning of the “Unrelated” Trap
The French system is particularly harsh in its definition of “family.” For the French tax authorities, certain relationships that we in the UK consider close are viewed as “strangers.” This comprises:
- Stepchildren: They are not related by blood to a stepparent unless they are legally adopted in France.
- Unmarried Partners: You are unrelated, even if you have lived together for decades, unless you have a marriage licence or a French PACS (civil partnership).
Anyone outside of the fourth degree of kinship is considered a friend or distant relative.
The tax-free amount is reduced to just €1,594 for these “unrelated” beneficiaries, and everything over that is subject to a flat 60% tax.
Handling Double Taxation
Thankfully, the UK-France Double Taxation Treaty of 1963 is still an essential instrument. In theory, you might be subject to taxes in both France and the UK if you are a UK resident who inherits French property. To avoid paying twice on the same asset, the treaty normally permits you to deduct the tax you paid in France from your UK inheritance tax obligation.
If you need help with French Probate, contact French Probate Matters on 020 8150 2010 or info@frenchprobatematters.com
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