Best way to buy - couple not married but children from our respective marriages

[ltm2006]

I've searched the internet and these Forums and I'm left a little confused.  If anyone out there could assist I woud be grateful:

My partner and I live together in our house in the UK.  She has two children (now in their 30's) from her previous marriage, and I have three children from my previous marriage (23, 22 and 16).

We are planning to buy a house in France next year.  Initially it will be used as a holiday home (as we both work) by us and our sons/daughters, however as we start winding down our working lives we plan to spend more time there and may eventually live about half of the year there (unless we fall for France enough to move their permanently!).  We do plan to eventually trade down our house in the UK and have an apartment here also.

As we are not married and don't intend to get married for at least another 4 years (all to do with pensions) we are trying to understand which would be the best way to purchase a property that minimises any tax liabilities and also protects all of our childrens interests in the property upon our deaths.  We want to set it up so the surviving spouse can continue to live in the property for the rest of their life before all the children inherit (ideally 50% to her two children and 50% to my three children).

I have read that there are different schemes that are available - we have ruled out the idea of setting up a company to buy the property (expensive) but have come across 'en tontine' (which  I think is only for married couples), and 'userfriut' (not sure if that is applicable to our circumstances).  I think I also read somewhere that you can't set up a will in France unless you are married and a resident.  We understand that the Napoleonic code used in legal matters in France means the children inherit but we are concerned about what would happen if something should happen to either one or both of us before we are married.  We don't want either set of children to miss out on their share of the property.

Could someone clarify the best course to take in our situation please?

Thanks in anticipation.

Les & Jean

[Ron Avery]

The best course of action, that is difficult, depends on how much the pensions issue means to you, but the simplest course of action in your situation is to get married.[:D] 

As for "We don't want either set of children to miss out on their share of the property."  Don't worry they won't,[:)] but you might[:O]

As I understand it if you do not get married,  the surviving partner can be evicted by the children from the property and it can be sold or taken over by the children of the respective partners.  Something to consider carefully if there are issues with any of the children over the break up of the previous marriages.  As you say, you can get a tontine clause if you are married that makes sure the children cannot evict the surviving partner, ownership passes to the children but they cannot evict the survivor until their death.  Everybody I know in your situation has chosen to get married.

[Hoddy]

I would advise you to get married unless the pension difference is very large. Our situation is pretty much like yours. We are both widowed and have have two grown up children each and are not married. At the time we bought our house 5 year's ago we were not well advised. We thought that each set of our children would inherit a half each with the survivor of us owning a half. What wasn't explained to us was that in order to inherit the children would have to pay a hefty tax bill in order to get their share. (This is the latest advice we've had from our notaire). Obviously this could create problems. If the kids can't meet the tax bill they might have no choice but force the sale of the house.

I think it's vital that you seek the advice of a notaire well before you buy.

Hoddy

[bakerino]

http://www.notaires.fr/notaires/notaires.nsf/V_TC_PUB/GBLOG

 

try this under "How to purchase"

 

hope it helps

[Will]

There is no simple answer as what happens and how much tax is payable depends on so many things. Such as the value of the estate, who dies first, and what other relations either of you have - e.g. surviving parents, sisters/brothers etc - who might have a right to part of the estate under French succession law. Even getting married does not solve the problem if there are children from previous relationships.

In your case you might consider a PACS agreement which gives cohabiting partners vaguely similar rights to married couples - but not the same rights by any means.

As you indicate that you do not intend to become permanent French residents then purchasing through an SCI is another possible solution, but this can have tax implications in Britain, and if you should decide to settle permanently in France it will be of little use as French succession law will take over.

The only totally worthwhile advice is to see somebody professionally qualified to help you. And that's not necessarily a notaire because many of these, although they may suggest a particular course of action, seem surprisingly ignorant of the other possible options available.

[Teamedup]

Will the C, I don't think that non residents can PACS, something they will have to look into.

Why don't you ask the notaire how much tax the children will be liable to on the value of a house of 'x' value. They will be able to tell you. It might not be as much as you think as there is a tax free allowance taken into account. And some people tax out life insurance policies to cover this.

[Will]

TU, I suspect you are right about the PACS, but I have heard non-residents saying they are going to sign one so I'm not 100% sure. This just proves that there are many reasons why people should take proper advice rather than rely on internet forums or the chap in the bar. A notaire should be able to tell you about the inheritance tax liability, but I wouldn't trust any one of them to advise on the most tax efficient way of buying or cover the possible options. I'd advise a second opinion from another notaire; at the very least.

[ltm2006]

Many thanks for all the replies - as we thought we really do need to get professional advice.  Can anyone recommend a firm of legal advisers who specialise in French property purchase and inheritance?  We live on the South Coast near Portsmouth so would like to find a firm not to far away so we can visit them.

Thanks in advance.

Les & Jean

[Will]

If you look in the advertisement pages of Living France, French Property News, France Magazine etc you will find one firm specialising in these areas with offices in Portsmouth. Their web page can be found at http://www.bllaw.co.uk/gen.asp?sec=os/ft. I have no experience of their services so cannot recommend them, or otherwise.

[WJT]

Hi, be very careful about so called French property specialist solicitors based in the UK. We found that the one we used (advertises in the French mags) was a complete waste of money. If we were to do it again I would have set up a meeting with an English speaking Notaire in France or a French Avocat.  There doesn't seem to be any comeback for a solicitor giving bad advice on French laws if they are based in the UK.  Just our experience. Best of luck.