Assessment and valuation
- For movable assets: you can ask a notary or an auctioneer to draft an inventory. Otherwise, it is fixed at a rate of 5% on the total assets.
- For real estate: market value based on real estate value data base created by the French tax administration (PATRIM) and on the valuation of a real estate agent
- For a company: expert valuation
Trusts / Foundations
Trusts/Foundations are not tax privileged entities. French IHT applies under both where a gift or inheritance occurs.
Taxation of business assets
French tax law provided a special tax regime for family business.
Subject to conditions, the Dutreil scheme allows three quarters (75%) of the value of a family business to be transferred without any liability for transfer tax.
Please note that the Dutreil scheme’s conditions will be subject to modification with the Finance Act for 2019.
International taxation
Foreigners may be subject to French inheritance/gift tax, if assets situated in France are transferred.
Avoidance of double taxation
France has signed inheritance tax convention with:
Algeria, Germany, Saudi Arabia, Austria, Bahrein, Belgium, Benin, Burkina Faso, Cameroon, Congo, Ivory Coast, Central African Republic, United Arab Emirates, Spain, USA, Finland, Guinea, Gabon, Italy, Kuwait, Lebanon, Mali, Mauritania, Morocco, Monaco, Niger, New Caledonia, Oman, Portugal, Qatar, United Kingdom, Saint-Pierre-et-Miquelon, Senegal, Sweden, Togo, Tunisia.
The rule: The country where the deceased was domiciled should tax their worldwide assets.
Nevertheless, France keeps the right to tax the deceased’s assets located in France.
The same rule applies if the heir was a French tax resident for 6 years over the past 10 years.
To avoid double taxation, France allows foreign tax to be credited to the French tax payable.
Who is liable under French Inheritance and Gift Tax?
In the case of an inheritance and gift, the recipient is subject to taxation.
Where a gift is made, the donor is also liable to tax.
Filing
The inheritance statement should be submitted within 6 months if the person died in France, 12 months if the deceased died abroad.
The sanction for failure or delay:
- 10% increase in the amount of tax
- + interest of delay: 0.2% / month
- A gift statement should be submitted within a month to the French tax administration for registration and payment of tax
The Gift of a real estate property has to be registered by a French notary.