French
///Estate
Planning
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When you own assets in France or are a French resident, it’s essential that any testamentary disposition you have in place deliberately considers your French assets and/or residency. This helps avoid leaving your loved ones or Personal Representatives with unexpected tax liabilities or procedural obstacles upon your death, particularly under French inheritance law.
There is often conflicting and confusing guidance around cross-border estate planning. This is largely because many legal advisors recommend solutions appropriate in their own jurisdictions, such as an usufruit in France or a Trust in England, without considering how these structures interact internationally. As cross-border legal professionals, we are uniquely positioned to advise on solutions that function as intended across both legal systems. We then help implement those solutions, giving you confidence that your French estate planning is comprehensive and compliant.
French Matrimonial Regimes
One particularity of civil law countries like France is their system of French matrimonial regimes, a legal framework that determines how a married couple owns and manages assets during their lifetime. This regime plays a critical role when one spouse dies, as it must first be administered before the scope of the death estate can be established under French inheritance law.
We can advise on which French matrimonial regime applies to you, how it may affect the administration of your estate in France, and whether a change of regime is possible. We’ll also explain your options and their impact on your overall French estate planning.
French Will / Donation entre époux
Many people assume they need a French Will, whether a handwritten (holographic) version or a formal Will signed before a Notaire, to manage their French assets. However, that’s not always the case. The need for a French Will is necessary in all individual circumstances, objectives, and the applicable law. We’re happy to discuss your situation and advise whether a French Will is the most appropriate tool as part of your overall French estate planning strategy.
In some cases, your Notaire may suggest a donation entre époux, a hybrid deed best described as a “lifetime gift between spouses, effective only upon death.” This document outlines the inheritance choices available to the surviving spouse and is commonly used in domestic French estates to provide greater protection to the surviving spouse. However, its usefulness can be limited in cross-border scenarios due to forced heirship in France. We can assess whether this is suitable in your case, or whether alternative planning methods would better serve your needs under French inheritance law.
Choice of law / Brussels IV Will covering French assets under the European Succession Regulation
Many clients are frustrated by the limitations imposed by French inheritance law when planning their estates and are looking for ways to avoid these restrictions. Since August 2015, the European Succession Regulation (also known as Brussels IV) allows individuals to elect the law of their nationality to govern their worldwide estate. For British nationals connected to England & Wales, this typically means increased testamentary freedom, often used to ensure the surviving spouse inherits the full estate on first death, with children inheriting later. This structure is not only preferable in many family situations but can also be more tax-efficient under UK rules, particularly for utilising the transferable nil rate band.
When a choice of English law is the right solution, it can often be implemented through a single English Will covering assets in both England and France. Since 2015, we’ve developed bespoke Will clauses to ensure these are valid and easily applied during estate administration in France. However, opting for English law doesn’t always deliver the full intended effect and can carry unintended tax implications under French tax law. As part of your tailored French estate planning, we’ll guide you through the options and make recommendations that align with your specific objectives and cross-border circumstances.
French Forced Heirship
Forced heirship in France is a principle of French inheritance law that requires certain close relatives, primarily children, and in some cases a surviving spouse, to receive a fixed portion of a deceased’s estate. While a Will that disregards these rules isn’t automatically invalid, any beneficiary entitled under forced heirship may still claim their legal share without needing to go to court.
There are several estate planning strategies to mitigate or avoid the application of forced heirship in France. These include using a Société Civile Immobilière (SCI) to hold assets, adding a tontine clause to your Deeds, selecting a specific French matrimonial regime, or making a valid choice of law under Brussels IV if your national law doesn’t impose forced heirship. However, each method offers different levels of protection and may not be suitable in every case. Notably, since November 2021, the introduction of France’s droit de prélèvement compensatoire has further limited the effectiveness of choice of law in some circumstances.
If forced heirship is a key concern in your French estate planning, get in touch. We’ll review your specific situation and advise on the most effective strategy for your objectives.
French Inheritance Tax
If you own assets in France or are considered French tax domiciled for inheritance tax purposes, French inheritance tax becomes a key element of your French estate planning. It’s essential to assess this early, before deciding how your estate will be distributed.
As part of our advisory services, we’ll guide you through:
- Whether you are considered domiciled in France for inheritance tax purposes, and the implications this has, especially where there’s an overlap with UK tax domicile or residency.
- Which assets are taxable in France if you’re UK domiciled or resident, and conversely, which assets are taxable in the UK if you’re French domiciled.
- The UK-France 1963 Double Tax Treaty and any reliefs available to avoid or reduce double taxation.
- Applicable French inheritance tax allowances and rates, which vary based on your relationship with the beneficiaries.
- Forecasting potential tax liabilities across different scenarios.
- Clarifying who will be responsible for paying the tax and how liability is allocated within the estate.
Lifetime Gifting (Donation)
Lifetime gifts can be a highly effective tool in French estate planning, particularly for managing future French inheritance tax exposure. However, in cross-border scenarios, they often involve unexpected complexity and cost, and must be carefully evaluated.
France operates a gift tax system, so when gifting French property, a Notaire may suggest retaining an usufruit (similar to a life interest) and transferring only the nue-propriété (bare ownership). This approach is often tax-efficient under French inheritance law, but for individuals who are UK domiciled, such a gift may be treated as a Chargeable Lifetime Transfer (CLT), potentially triggering immediate UK inheritance tax, future anniversary charges, and Trust Registration System requirements.
Even an outright gift, without retaining an usufruit, can carry unintended UK tax consequences. These include the 7-year rule and the risk of being treated as a Gift with Reservation of Benefit (GROB).
As part of our service, we’ll help you assess the cost and implications of a lifetime gift of your French assets, and consider alternative structures aligned with your tax and legal goals.
NB: If you are UK-resident, gifting French assets may also trigger a UK capital gains tax liability. We do not advise on this and recommend seeking separate tax advice, including whether any double taxation relief may apply.
Setting up a Trust (lifetime or testamentary)
While a Trust is a valuable estate planning tool in England, it presents significant complications in the context of French estate planning. There are two primary reasons for this.
First, if a Trust has any connection to France, such as holding French property or involving a French resident, this triggers strict reporting obligations with the Non-Residents Tax Office. Non-compliance is heavily penalised. Second, the French gift and inheritance tax system imposes punitive taxation on Trust structures: assets transferred into a Trust are taxed at either 45% or 60%, with no tax-free allowance. Any future distribution of French assets from the Trust to a beneficiary can taxed again. If the beneficiary is French tax resident, any income or capital received from the Trust must also be declared and taxed accordingly.
For these reasons, it is generally advisable to avoid creating any direct link between a Trust and France. However, there are often compelling reasons to consider Trust structures, and we are happy to discuss your objectives and explore suitable alternatives under French inheritance law and UK estate planning frameworks.
EXPERT LEGAL ADVICE
Our French Experts
Marc White
Solicitor, Notary Public & Accredited Mediator
Madeleine Carin
French Paralegal
Léa Maynard
Solicitor & Head of French Law