French inheritance tax, known locally as droits de succession, is a key consideration for anyone with assets in France, whether you live there or not. Unlike some countries where inheritance tax is charged on the estate as a whole, in France the tax is charged separately on each beneficiary’s share of an inheritance and is influenced by both the value received and the beneficiary’s relationship to the deceased.
This comprehensive guide explains how French inheritance tax works, who pays it, how it is calculated, key exemptions, and practical planning ideas to minimise liabilities.
How French Inheritance Tax Works
Who Is Liable?
In France, the beneficiaries or heirs, not the estate itself, are responsible for paying inheritance tax on the portion of assets they receive.
The tax applies to a wide range of assets, including:
- Real estate
- Cash and bank accounts
- Investments and securities
- Life insurance policies
- Business interests and other valuables
Whether you are a French resident or live abroad, you may be liable for French inheritance tax on assets located in France if you receive them. Foreign heirs must also comply and pay French succession tax on French-situated assets, even if their home country also taxes inheritance.
Relationship to the Deceased Matters
French inheritance tax uses progressive rates and personal allowances that depend heavily on the relationship between the heir and the deceased:
Personal Tax-Free Allowances
Before applying tax, each heir is entitled to a personal tax allowance (abatement) that reduces the taxable amount:
- €100,000 for each child or parent
- €15,932 for siblings
- €7,967 for nephews/nieces
- €1,594 for unrelated beneficiaries
In addition, disabled beneficiaries may qualify for a higher allowance under certain conditions, which can significantly increase the amount passed free of tax.
Progressive Tax Rates
After allowances are deducted, the remaining taxable portion is subject to progressive taxation based on family relationship:
For children and direct descendants:
- 5% on the lowest bands
- Increasing through tiers up to 45% on large inheritances
For more distant relatives (e.g., siblings) there are higher brackets, and for those with no family ties to the deceased, rates can reach 60% of the taxable share.
Forced Heirship and Succession Law
France’s civil code imposes forced heirship rules that restrict how an estate can be divided. A reserved portion of an estate is automatically allocated to certain heirs, particularly children:
- One child must receive at least half of the estate
- Two children must receive two-thirds
- Three or more children must receive three-quarters
Only the remaining portion, the quotité disponible, can be freely distributed via a will to others, such as a spouse, partner, or unrelated individual. This framework may differ from common law systems, where you can leave assets freely by will.
Valuation and Tax Calculation
To calculate inheritance tax for each heir:
- Determine the gross value of the assets received (after debts are deducted).
- Apply the personal allowance based on relationship.
- Apply the progressive tax rate to the remainder.
Each heir’s tax position is calculated independently, meaning two heirs receiving the same asset value may pay different tax amounts if their personal allowances or relationships to the deceased differ.
Declaring and Paying the Tax
Inheritance tax in France is normally declared via a déclaration de succession (inheritance tax return), which must be filed:
- Within six months if the death occurred in France
- Within twelve months if the death occurred abroad
Payment is generally due at the same time as the declaration. French authorities allow payment in instalments or even deferred payment under certain conditions, for example, when the estate includes significant non-liquid assets such as property.
Late payment can incur interest and penalties, so timely filing and payment are essential.
Exemptions and Special Cases
Spouses and Civil Partners
One of the most notable exemptions in French law is that spouses and PACS (civil partnership) partners are completely exempt from inheritance tax on amounts received. This exemption does not automatically apply to unmarried or unregistered partners unless they are designated through specific structures (e.g., life insurance policies).
Non-Residents
If the deceased was not a French tax resident, French inheritance tax generally applies only to assets located in France, such as real estate, bank accounts held in France, or business interests based in the country.
Conversely, if the deceased was tax resident in France, inheritance tax can apply to their worldwide estate, not just French assets.
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The author: Géraud is the co-founder of The French Tax Representative and a chartered accountant by training, specialising in real estate and international clients since 2017. He and his team help several hundred individuals and companies each year with their French tax management.