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Couples in a long-term relationship who entered into a French 'pacte de solidarite' (or UK civil partnership) will be allowed to leave assets to the surviving spouse/partner without being subject to any French inheritance tax.

Dealing with divorce proceedings - September 2007

Often there is an issue with the presence of children from a previous relationship.  This can normally be circumvented for those who intend to become French permanently resident by entering into a survivorship scheme such as the Tontine, or by signing a French marriage contract and setting up a Communauté Universelle regime. In respect of the latter, children from a previous relationship should sign a waiver by which they will waive any claims against the surviving spouse.

Tax changes to come - July 2007

Since the recent election of Nicolas Sarkozy as the new French President in May 2007, several new tax incentives have been implemented.

France taxes wealth even if no transfer, death or disposal is involved.  The French Finance Act dated 23 December 1989 re-introduced a wealth tax payable by individuals when the value of their assets totals more than €760,000 on an annual basis.  This tax is frequently overlooked or even not taken into consideration by those who have invested in France.

Parental inheritance rights - May 2007

France appears to be a nice place to retire to even for those who do not intend to use it as a holiday home for them and their children.  This will have serious implications both in terms of tax and estate planning.  It is unfortunate that we find that most people who move to France tend to postpone these issues until after their arrival.   This will make it more difficult and eventually costly and potentially impossible to achieve what they might ideally wish for.

Changes to inheritance tax - April 2007

The French budget 2007 is important in particular from an estate planning point of view. Families might find it very helpful as it follows up and completes the new French Inheritance Act dated 23 June 2006 and brings more freedom in dealing with Estates subject to French inheritance Law.                                                              

How signing a pre-nuptial or post-nuptual agreement and entering a community fund or community of property agreement in France could help married couples express how they wish their assets to be held during marriage and divided in the event of a death or divorce. 

Purchasing a buy-to-let property or renting out an empty property in France may be a tempting proposition – the running costs can be covered by letting which can also provide a stream of income.  The rules of the French Lease Act, 6 July 1989, which regulates leases of unfurnished properties, are statutory, but the law does not apply to seasonal, commercial or furnished lettings.  These rules should be carefully considered before letting a property – a tenant who does not pay his rent or who is difficult might seriously affect the use or the value of the property.

A deceased child/ren might try to claim that the UK-based assets, for example, are subject to the French compulsory inheritance system.  Any gifts and legacies made during the deceased person's lifetime might also be ineffective as the world-wide movable assets could be governed by French inheritance law if the deceased was French-domiciled.