Best way to Buy Property

[StephenM]

Hi

 

My wife and I are about to buy a house in France, the agent has suggested that we buy this en tontine, but this would appear to leave the surviving person liable for inheritance tax ?. 

 

Neither of us have been married before, we have no children, I have one brother, my wife has one brother and one sister. Can someone please advise which method will result in neither partner being liable for inheritance tax

 

Thanks

[cooperlola]

I'll try to find the link for you where this has been discussed.  For my money, see a good Notaire.

Here

http://www.completefrance.com/cs/forums/786469/ShowPost.aspx

put "Inheritance" into the search box, top right and you'll find more on the subject also.

[Will]

You need to take professional advice, a good starting point being the notaire handling the sale. Don't rely on these forums because we are not legally qualified, we don't know your full circumstances, and inheritance law changed on 1 January - not drastically, but possibly significantly.

'En tontine' is one of several alternatives, which may or may not be suitable for you. From what you have said, I think you should also consider registering your marriage regime in France under the 'commonauté universelle'.

It is very difficult, in most cases impossible, to avoid French inheritance law and taxes. What you can do is delay them until after you have both passed on.

[Val_2]

I agree, make an appointment with a notaire and discuss the alternatives. An estate agent is not a lawyer and some don't even know what en tontine is either.

[Teamedup]

We have always been told that tontine is only a good move if the property is below a certain price, due to inheritance tax implications.Our notaire doesn't do them at all as property around here is too expensive.

[cooperlola]

Oh, and get the Notaire to draw up a French will.  Like you we have no children and no living relatives close enough to automatically inherit a portion of our estate so it's vital that somebody knows whom you want to leave - what will be a megre amount when they've paid the taxes! - any residue to.

[Llantony]

We bought en tontine so that if/when one of us dies the house automatically belongs to the other.  Currently the house belongs half to the survivor and half to the deceased's children (or, if no children possibly the deceased's family). A friend did the same as, although they get on well with their 4 children, all 4 would have to sign before the surviving parent could sell the house.

I'm pretty sure tontine is only allowed on houses under a certain price (maybe 100000 euros, ours was 68K).

I agree you need to check tho as the law is changing.

[mint]

as i understand it, tontine is ok if one or both of you has/have never been married before.  also, for properties above 150k euros, there is no inheritance tax advantage.

someone out that, if you know any different, PLEASE correct me.  i am only testing my own knowledge as much as anything!

[StephenM]

Hi

After reading and re reading all replies and links, it would appear that the best solution would be communaute universelle, as this would mean the surviving partner pays no tax.  Ultimately we would leave the property to our two nices, they could if they wished take out a policy to pay the taxes due!

Thanks all for your advice and help

[cooperlola]

It is what we have done (I did not want to advise this specifically as I think it's really worth having professional legal advice on these matters) and as I say, our family circumstances are very similar - at least at first glance - to yours.  We went in with one idea and our notaire advised us to go down the Communaute universelle route.

[darnsarf]

I'd echo what others have said about getting decent legal advice from a (sueable!) professional. My partner and I are not married (though we've been together for 25 years and have two 'children' aged 20 and 24). The first advocat we saw suggested we get married! The second advised a tontine clause. Although the house is well over the £150K threshold, at least this would give the surviving partner some control over the property and delay inheritance tax. But from what I read and was advised, inheritance rights are enshrined in Napoleonic law and it's unlikely in the short term at least to be changed materially, however daft it is.

[Teamedup]

Where have you all found the 150k€ allowance for tontine, the servicepublic.fr site is still stating 76K€, well last time I looked it was.

[mint]

tu

i think i got the idea that 76k euros is for one person and therefore 150k euros for 2 people!  might be wrong and will stand corrected.

the problem with both tontine and cu is that if one or other partner has been married before then when number 1 partner dies, number 2 partner gets all of the property.  therefore, if number 1 partner (the one who dies first) has children from a previous relationship, his/her heirs are in effect barred from inheriting. this is because number 2 partner (the one who delays dying) will then leave his/her property to his/her heirs

don't know if that's clear.  it's clear to me but then that's not to say i know absolutely! 

[cooperlola]

Yes, sweet17, I think you may be right but the OP - like us - has no kids so I think that is why cu works in our circumstances.  It's the reason why I reckon a good notaire is the best person to advise because it's so different for everybody!  Inheritance law here is a total minefield for the unwary and once I'm dead, I - and my notaire - may well be proved wrong!!![:D]