Inheritance

[rico]

Could anyone please tell me what tax implications there would be on inheriting a lump sum from the sale of a house in UK due to the death of a relative if you live in France.

[idun]

It would depend on how close a relative you are, the taxable amounts and allowances that are not taxable depend on this.

 You will be able to find all the information is on the service-public.fr web site.

[Pickles]

Reading the OP carefully, I assume the following:

You are in France;

The deceased is not French and did not reside in France;

The estate and the property are in the UK and the estate is therefore subject to UK IHT;

The sum involved therefore is after application of UK IHT.

Under the above circumstances it therefore has nothing at all to do with the French tax authorities, nor French inheritance law.

If the deceased had their residence in France at the time of death, or the property was located in France, then the above does not apply.

[rico]

Thanks Pickles,

Its just that i thought all lump sums or any income had to be declared to the French tax authorities, hopefully this is not the case.

[parsnips]

[quote user="rico"]Could anyone please tell me what tax implications there would be on inheriting a lump sum from the sale of a house in UK due to the death of a relative if you live in France.[/quote]

If the deceased was UK resident, and you received the money under a bequest in his/her will, then under the terms of the France /UK inheritance tax treaty of 1963 , you have no liability to french inheritance tax.

 see here;    www.ambafrance-uk.org/Treaty-Inheritance-tax.html

[Pickles]

[quote user="rico"]Thanks Pickles,

Its just that i thought all lump sums or any income had to be declared to the French tax authorities, hopefully this is not the case.[/quote]

Your bank might demand to know the source of the funds ...

However, it isn't "taxable income" as such: the treaty governing the issue can be found at:

http://www.impots.gouv.fr/portal/deploiement/p1/fichedescriptive_1790/fichedescriptive_1790.pdf

Post crossed with Parsnips'. The weblinks provided by Parsnips and myself are the same document.

[idun]

Parsnips, I have to say that I am currently unwell, and have tried to read it, but that ambafrance treaty is making no sense to me at all. In fact that is the worst sort of english, and absolutely incomprehensible to me.

I shall look at it later.

[parsnips]

[quote user="idun"]

Parsnips, I have to say that I am currently unwell, and have tried to read it, but that ambafrance treaty is making no sense to me at all. In fact that is the worst sort of english, and absolutely incomprehensible to me.

I shall look at it later.

[/quote]

Hi,

  This is the relevant section;

"2. Where a person was at the time of his death domiciled in some part of

Great Britain duty shall not be imposed in France on any property not

situated in France; and in determining the amount or rate of duty

payable on any property which is chargeable in France, any property not

situated in France shall be disregarded."

I think that's reasonably clear.  Hope you're better soon.

[idun]

Thanks, but what would  'property' precisely mean, and what if it is money, rather than a building?

I am confused, but there again, it is a lot easier for me to be confused at the moment.

 

[andyh4]

Idun

 

in the context of the document, property means property, all property - so movable as well as immovable (real estate).

 

Get well soon

 

[Pickles]

[quote user="idun"]Thanks, but what would  'property' precisely mean, and what if it is money, rather than a building?

I am confused, but there again, it is a lot easier for me to be confused at the moment.[/quote]

The DTT goes to great lengths to define the different type of "property", but it comes down to "where is it at the time of death?": if it is in the UK, and the deceased was residing in the UK (ie we have the usual distinctions in the treaty about domicile, centres of economic interest etc) at the time of death, then the fact that the beneficiary lives in France is immaterial: the estate is dealt with under UK inheritance legislation and subject to UK IHT rules. The only time that French rules and taxes come into play is if parts of the deceased's estate are in France. 

So if the money (either as cash or in a bank account) is in France and the deceased is UK-resident, then the money comes under French IHT (and a tax credit is allowed in the UK against UK IHT for the same sum): if in the UK, then UK IHT applies.

Rather than think about the beneficiary: think about the estate: it is the estate that is liable for the tax, whether it is located in France or the UK, not the beneficiary.

[idun]

Thankyou, all that had my head spinning. Why didn't they say 'estate' rather than 'property', it would have made it clearer to me at least, and I realise that none of you can actually answer, so a rhetorical question[Www]

They are now starting to believe that I have labyrinthitis (sp), so no driving and I have to watch what I am doing at the moment.