March 2016

By Mary Taylor, Partner, Blevins Franks
mary.taylor@blevinsfranks.com
05 62 30 51 40


 

 

Have you made France your permanent home? It is essential to review your wealth management to ensure it is specifically designed around your new life in France. Besides considering how to achieve advantages for your lifetime, it is also essential to get your estate planning in order. Don’t risk leaving it too late.

Estate planning in France is particularly complex and challenging. Its “forced heirship” regime does not allow you to freely distribute your assets on death, and succession taxes can be as high as 60%. Arrangements that worked in the UK are unlikely to achieve the same results here and could have unexpected consequences.

 

Succession law

French succession law protects your children above anyone else. This can be very restrictive and prevent you leaving all your wealth to your spouse, or leaving assets to other relatives, step-children, friends etc.

The 2015 EU succession regulation, “Brussels IV”, gives UK nationals the ability to opt through their will for UK law to apply to their assets on death, instead of French law. This potentially means you can leave assets to whomever you want.

While this seems good news, there is more to it than first meets the eye and it is not necessary the best route for UK nationals.

It is still obligatory for a French notaire to handle your estate, and in this case he will have to administer it under a law he is not experienced with. The UK has opted out of Brussels IV, and so there is uncertainty over how the rules will be interpreted. Adopting UK law could negatively affect your existing succession planning arrangements, and may also mean that your estate becomes liable to UK inheritance tax as well as French succession tax.

You therefore need to have all the facts and consider your options carefully. There may well be options available under French law that achieve your aims, and without complicating matters.

 

Succession tax

Whichever law you opt for, French succession tax continues to present a significant hurdle.

Spouses/PACs partners are exempt from this tax, and children receive a €100,000 allowance each, with tax rates up to 45%. For everyone else the tax rates get higher and the allowances much, much lower. If, for example, you pass assets to stepchildren, they pay tax at 60% and only get a €1,594 allowance.

Again, there are structures you can use here in France that can provide significant succession tax planning benefits. You should look to accomplish tax advantages for yourself at the same time. Make sure the structures you use achieve what you wish, in the way that you wish. While some arrangements may appear similar to each other, small differences can have big implications.

Estate planning in France is a very specialist area and it is essential to take professional advice from an experienced wealth manager.

To keep in touch with the latest developments in the offshore world, check out the latest news on our website www.blevinsfranks.com
Tax rates, scope and reliefs may change. Any statements concerning taxation are based upon our understanding of current taxation laws and practices which are subject to change. Tax information has been summarised; an individual is advised to seek personalised advice.

SEMINARS

“Estate planning in France worries me. How can I ensure the right money goes to the right hands at the right time?”

Succession tax can be high in France and its forced heirship laws are very restrictive. The European Certificate of Succession comes with pitfalls; there are other options but care must be taken. Our seminars examine all the estate planning issues you need to be aware of and advise on how you can have control and certainty. They also cover recent tax and pension changes affecting UK nationals in France.

The March seminars include guest speaker Nick Rosenblatt, Head of Partnerships at Russell Investments, who will outline Russell’s investment approach and how you can benefit from it.

CARCASSONNE, Le Domaine d’Auriac | Wednesday 16 March, 10 for 10.30am
CAHUZAC-SUR-VÈRE (Tarn), Château des Salettes | Thursday 17 March, 10 for 10.30am
PERPIGNAN, La Villa Duflot Hotel | Wednesday 20 April, 10 for 10.30am
GIMONT (near Auch), Château de Larroque | Friday 22nd April, 10 for 10.30am

Book your seminar place here, or contact Mary Taylor on mary.taylor@blevinsfranks.com or 05 62 30 51 40

 

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