French inheritance laws

[Alias]

I am about to sell my house in England and move with my wife to the place we have already purchased in France.  I realise that French law is complicated but what is the simplest thing I can do to ensure that my wife inherits the house etc in its entirety after my demise (and vice versa)?  I assume I need to have an up to date English will before I go any further.

Thanks,

Alias.

 

[Will]

An English will has little standing in France, though it may be accepted as long as none of its provisions go against French succession law. If you intend to retain links with Britain - which will help retain your UK domicile (as opposed to residence) for tax purposes - though, you should have a valid and current English will on file to cover the part of your estate that may not be subject to French laws and taxes.

The simplest way of ensuring what you want is to purchase 'en tontine' - and sometimes this is the only way. It does, however, have tax implications so you may wish to consider other options. As there are many factors in the equation, not least the value of the estate, how many children there are, and what is their parentage (e.g. they may come from previous liaisons), everybody's situation is different, so you must take proper advice from a qualified professional.

 

 

[Gluestick]

Concur absolutely with Will: take qualified professional advice.

You have two routes only, potentially to ensure your wife inherits the right to occupy the house after your demise: as Will states, by inserting a Clause Tontine, in the Acte de Vente: and by adopting the correct Civil Etat.

That said, both suffer tax problems and the eventual distribution of your estate according to extant French inheritance law after your wife's demise.

That said, the French Inheritance code is presently under review.

 

[Sprogster]

Just to complicate matters, the changes to French inheritance tax this year need to be considered carefully, if you wish to minimise this liability when any children eventually inherit your French property.

In France you can now leave everything to your surviving spouse free of inheritance tax and there is a Euros 150,000.00 allowance for each child. This compares to the newly increased IHT allowance of  £600,000.00 for married/civil partnership couples in the UK. 

However, to fully utilise the increased  French IHT thresholds each spouse needs to use their allowances individually, unlike the new rules in the UK where the surviving spouse can pool any unused allowance of their pre-deceased spouse, when leaving assets to their children or anyone else.

For example, the first spouse to die leaves an interest in their French property to their two children up to the applicable French IHT allowance, although giving the surviving spouse  the legal right to continue to occupy the property during their lifetime. When the second spouse dies the value of their remaining interest in the property is also able to take advantage of the Euros 150,000.00 per child allowance. That way you are able to utilise a total combined allowance of Euros 600,000.00 for two children, rather than Euros 300,000.00 if the surving spouse inherited everything first.

As this is such a complex area, you should obtain professional advice in France, from a lawyer who is experienced in dealing with foreign nationals investing in France.