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Are you a French Tax Resident? Then is information is for you! 26th May 2016

Are you a French Tax Resident? Then is information is for you!

Article by Loic Raboteau, International Legal Advisor and French Property Law Expert, Francophile Law


Estate Planning For Families Tax Resident in FranceFrench inheritance taxes are known for being difficult at the best of times, though this bit of information supplied by Francophile Legal Consulting may help you limit the fiscal cost of transfer of your assets to loved ones.

Since 2006, donors have been able to gift their descendents (children and grandchildren) values of up to €100k tax free. Transferring the assets over two generations increases the number of inheritance tax allowances applicable.

Parents are able to gift their children €100k and grandchildren €31,865 before any tax is payable. For example, a couple with 2 children and 2 grandchildren. If each parent gifted the maximum amount to the children (€100k x 2 children) and grandchildren (€31,865 x 4 grandchildren), the total is €654,920 tax free.

For French property, this estate planning can be advantageous if the property was purchased by a holding company such as an SCI (“Société Civile immobilière”). An SCI is commonly used by families as a vehicle to organise the transfer of assets between family members, and allows owners to gradually transfer their shares to descendents every 15 years. It is generally necessary to gift shares to descendents rather than sell on shares of an SCI, as the value of the shares are generally less than the value of the property.

Please note that these cross-generational gifts may also involve assets which have already been donated to children. If so, it is then possible for them to pass their assets onto their own children to create more favourable tax conditions. 

For more information on claiming back social security charges or for other legal assistance in relation to French ski property, please do not hesitate to contact Loic Raboteau, French Legal Advisor at Francophile Legal Consulting, at loic@francophile-law.com, +44 (0) 203 356 9742 

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