Legal - Inheritance

[kellandwonkeithm]

My wife and I have been left my mothers house in England. We are French tax residents, but own no properties in England or France. Are we liable to any tax or charges in France. Appreciate any info.

[Paul Bradford]

Hi,

I believe the capital gains tax loophole is still open until sometime next year. Death duties are payable on estates valued over £267,000 (I believe that is the correct figure) in the UK. I would check with a UK accountant or perhaps one of the tax lawyers advertising in the magazine. As I understand it, if you are resident in France but sell a property in the UK you will not be liable to capital gains tax as the Inland Revenue will not pursue you in France. (Just read that in the latest Living France mag).  However, I'm not sure what the French Revenue would require. It would obviously depend upon the value of the property.

Hope that helps a bit.

Regards

Paul

[Hegs]

UK inheritance tax is a tax on the estate of the deceased.

French "inheritance" tax is taxed on the legatee (i.e. *you* who gets the money).

If you have been French tax resident for less than 6 of the last 10 years preceding the current tax years, you will not have to pay French inheritance tax as well as UK. Otherwise you will, as far as my understanding goes.

See under: F/ INHERITANCE AND GIFT DUTIES on http://www.ambafrance.org.uk/fiscal/maj/menu/fiscalitefr/pardeugr.htm or http://www.impots.gouv.fr/portal/deploiement/p1/fichedescriptive_1006/fichedescriptive_1006.pdf

As usual, seek professional advice from money-grabbing "experts" who really don't know what they're talking about and won't want to speak to you unless you are super-rich or are going to give them a huge sum in commission.

[Debra]

Hi Keith,

I've been reading through a French taxation document someone posted on here a while ago but its really complicated.  I'm not quite sure whether you would still pay inheritance tax and transfer duties in France even though the property is in the UK (it sounds like it - and the threshold is lower in France) and if so, this seems to depend on whether you've been tax resident in France for more than six years in the previous ten years. 

If you do a google search on 'inheritance UK abroad' it brings up lots of information sites.  I think you really need to speak to a tax expert that is knowledgeable about both UK and French tax regimes, but then you probably realise this.  Hopefully someone on here will have been in the same situation, as it must be common, and will have their experience to relate.

The property would certainly be added to your overall wealth so it might affect whether you now pay wealth tax or not.  You should also consider whether you will be liable to income tax in either country on the nominal rental value of the property.

Edit: oops - cross posted with Hegs since I took ages to update this, going off to do an internet search in the middle of it!  However, Hegs, I DID find out that it comes under the double taxation agreement, so any tax paid in France will be offset against any due in the UK, if any is due. 

[Debra]

current UK threshold for IHT is £275000 and here is a useful site for the UK position: http://www.direct.gov.uk/MoneyTaxAndBenefits/Taxes/InheritanceTaxEstatesAndTrusts/InheritanceTaxArticles/fs/en?CONTENT_ID=4016736&chk=03jqr%2B and on the same site but specific to people moving abroad, not so specific to inheritance tax: http://www.direct.gov.uk/BritonsLivingAbroad/Money/MoneyArticles/fs/en?CONTENT_ID=4000107&chk=yThhza

[kellandwonkeithm]

 Many thanks for your replies. According to professional advice, there are no charges in France, but some comments indicate less than 6 years tax resident - possible.