How to Minimize or Eliminate French Inheritance Taxes for Your Heirs!

Next Wednesday at 7 p.m. France time (10 a.m. Pacific/1 p.m. Eastern), Brian Dunhill (financial advisor), Benjamin Pik (CPA/Expert Comptable), Jonathan Hadida (Tax Attorney) and I will be hashing out the ins and outs of French inheritance taxes on Zoom—how to minimize or eliminate them for your heirs! This is the topic for our second quarter North American Expats in France Quarterly Financial Forum. If you are tax resident in France or own property here, it will be very worthwhile tuning in.

The four of us met on Zoom this week to discuss my personal tax issues, as well as what words of wisdom we will impart to you during the Forum. My personal situation is complicated, but this team is brilliant in maneuvering solutions that will be the least costly to me, while protecting my daughter from paying expensive taxes.

What bothers me the most about the French inheritance tax laws is how it is entirely likely that a child who has grown up in a house or apartment, like my daughter did in Paris, might have to sell the property just to pay the taxes. In our case, as is in most, the value of the property has grown significantly over the years, increasing the tax basis, which was not of our doing at all, of course. This means that as time goes by, and it continues to increase, so does the tax she will owe.

Photo by Patty Sadauskas

I am hoping that newly re-elected Emmanuel Macron will reform the current system to be more fair to our loved ones who should (in my opinion) reap some rewards for their parents’ efforts without being penalized. For now, children benefit the most and pay the least, while other relatives and friends won’t be laughing all the way to the Banque de France, with as much as 60 percent of the value of the estate!

The Chambre de Notaires outlines the tax law clearly on their website, in English.

And the French government provides this information, in English.

But, I dare you to fully comprehend it! Even our illustrious tax attorney, Jonathan Hadida, will tell you that there’s a lot of gray area and one must be very careful when interpreting it.

The bottom line, which you will hear during the Forum, is Good Estate Planning. The heirs of anyone moving to France who will become tax resident in France, will be subject to French inheritance taxes on all of their benefactor’s worldwide assets! If not tax resident, then the taxes are incurred on only French assets. Either way, planning ahead is the key. This is why we always discuss the structure of the purchase of a property with our clients to consider minimizing the tax from the get go.

On a somewhat related note…a French woman, Sister André, just officially became the world’s oldest living person, recently celebrating her 118th birthday.

Life expectancy in France (as of 2019) is 85.3 years for women and 79.4 year for men, some of the highest in the world. The Covid-19 pandemic may have an effect on these figures as it affected the elderly worst of all, but the French are generally healthier than most. France ranks 14th in the world in life expectancy!

The reason? No, it’s not wine and cheese. It’s France’s healthcare system. Not only is it excellent, but it’s available to everyone, and that makes a big difference. Another big reason is their many weeks of paid vacation, numerous holidays and respect for family time, reducing stress.

So, the good news for me is that even though I’m pushing 70 this Fall, thanks to living in France, I hope to have many more years to work out my inheritance tax issues so my daughter won’t be crying all the way to the Banque de France!

Be sure to tune in to our quarterly forum—I am sure you’ll find it valuable information!

Learn more about the Forum panelists here.

Register for the event here.

A bientôt,