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If Sarkozy abolishes inheritance tax as promised then ?


milkeybar kid
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I read this on a BBC page - what does it mean to us all? - Up to 95% exempt from inheritance tax

Lets say for eg when just one of us is left - after death could our daughter inherit all we have in France without a tax but what we cant understand is would  the UK Government take a tax from our daughters inheritance that came from France.Or have I got confused yet again! [Www]

 


 

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Just to clarify one point.  85% of French do not pay inheritance

tax, never have.  This is essentially a gift to the well off, the ten

percent who should pay tax, but now won't.  For some reason, Sarkozy left

the top 5% still having to pay tax, but then again, they have accountants and

clever systems and probably won't have to pay anyway.  To make up for this

gift to the classe aisée, all of us, including the poor and nearly poor and

middle classes (in France) will have to pay the TVA.  Its exactly what he

promised.  In addition he promised an overall tax break for the well off, and

he is delivering that too.  No one will now have to pay more than 50% for

all their taxes combined. 

As for the original question, what often happens is that once you pay a particular

tax here (or not pay in this case) the other country in the agreement (Britain)

collects what is left.  That is, all the tax they would have collected

anyway.  But this is just a guess based on some other taxes.  Maybe

you will get out of it altogether.  Those more informed than me will give

a correct answer rather than a reasonable speculation.

Did you know that income tax is about 16% of total state revenue and TVA is

about 53%?  Most of the money comes by collecting the most regressive tax

there is.  In the land of justice and equality and solidarity.
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[quote user="TreizeVents"]Just to clarify one point.  85% of French do not pay inheritance

tax, never have.  This is essentially a gift to the well off, the ten

percent who should pay tax, but now won't.  For some reason, Sarkozy left

the top 5% still having to pay tax, but then again, they have accountants and

clever systems and probably won't have to pay anyway.  To make up for this

gift to the classe aisée, all of us, including the poor and nearly poor and

middle classes (in France) will have to pay the TVA.  Its exactly what he

promised.  In addition he promised an overall tax break for the well off, and

he is delivering that too.  No one will now have to pay more than 50% for

all their taxes combined. 

As for the original question, what often happens is that once you pay a particular

tax here (or not pay in this case) the other country in the agreement (Britain)

collects what is left.  That is, all the tax they would have collected

anyway.  But this is just a guess based on some other taxes.  Maybe

you will get out of it altogether.  Those more informed than me will give

a correct answer rather than a reasonable speculation.

Did you know that income tax is about 16% of total state revenue and TVA is

about 53%?  Most of the money comes by collecting the most regressive tax

there is.  In the land of justice and equality and solidarity.
[/quote]

Comrade TV,

Under the current legislation a couple with one child having an estate in excess of €100k would pay inheritance tax - if you consider this to be rich then then there's a lot more than 10% who could qualify.

As for TVA - probably the fairest tax there is - you spend, you pay it's the only time black workers pay tax and given that 50% of people don't pay tax there's lots of black business going on.

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TV

TVA is the most egalitarian tax there is it is imposed on all equally.  That it's effect on the poorer element of society is greater, I totally agree, but then you would need some form of positive discrimination - which is not egalitarian.

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[quote user="milkeybar kid"]

I read this on a BBC page - what does it mean to us all? - Up to 95% exempt from inheritance tax

Lets say for eg when just one of us is left - after death could our daughter inherit all we have in France without a tax but what we cant understand is would  the UK Government take a tax from our daughters inheritance that came from France.Or have I got confused yet again! [Www]

[/quote]

It is The Estate which is taxed: not the person receiving the inheritance. So thus if the UK Revenue accept that the Testator (Male) or Testatrix (Female) are genuinely resident and domiciled in a territory outside UK jurisdiction and that the local tax requirements have been met, there is no UK tax for a beneficiary to pay.

The estate, BTW becomes if you like the trustee of the deceased person's assets, but is in point of tax law, regarded as if that person was still alive and subject to various aspects of law.

This is where it becomes tricky when people try and be too smart whilst alive and set up various schemes on their real property (house): they can finish up with the estate paying Capital Gains Tax! Whereas, of course, up to the ceiling, IHT (Inheritance Tax) which is also a Capital Tax, as against an Income Tax, allows a pretty generous tax free sum.

Not generous enough of course with zooming average property prices!

 

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Les Lauriers wrote:
"Under the current legislation a couple with one child having an estate in excess of €100k would pay inheritance tax - if you consider this to be rich then then there's a lot more than 10% who could qualify."

I agree, French citizens don't have to be rich for their offspring to be liable for succession tax. IF it's fact that only 10% pay at present then that must be due to the way they arrange their succession and the fact that current French property values and smaller families haven't affected historical data yet.

Regarding raising TVA to fund the deficit in the social budget and it's equal or unequal effect on the less well off depending on one's point of view, France has various rates of TVA and the government has not as far as I know suggested how any new levy could be imposed. Perhaps TVA rates will be left as they are on food, clothing, power, etc. and raised on relatively "luxury" items such as cigarettes, big TVs, new cars, jewellery, flights, and so on.

Returning to the original post, our notaire has told us that when Sarkozy's changes to succession taxes become law, the removal of surviving spouses from any tax liability will also apply to those whose property is owned in tontine.

Steve

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Thank you to all, very interesting replies. I think I have understood but-

In a nutshell- would you think it will have the same status as The Isle of Man as far as Inheritance Tax goes? - ie : You can leave all to your siblings without your estate incurring penalty of taxes of sort's. [+o(]

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Will only work if you establish French domicile. This means (simply) instead of living in France, you become French, break all ties with England or anywhere else and live there for an extended period of time. It is quite difficult to establish domicility compared to tax residence.

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