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Inheritance tax is payable by beneficiaries on the world-wide net assets of deceased French residents. If the deceased was a non-resident, only assets located in France are subject to inheritance tax.
Inheritance tax is levied at progressive rates, which vary, depending on the degree of relationship of the recipient to the deceased. Spouses, parents and children in direct line benefit from a personal allowance of FF 330,000 for the surviving spouse and FF 300,000 for parents and children. Other beneficiaries receive an allowance of FF 10,000, and special allowances are also granted to physically handicapped beneficiaries. In the case of inheritances opened after 1 January 1992, allowances already granted more than 10 years ago are not taken in account.
Spouses, parents and children in direct line are taxed at progressive rates between 5% and 40%. Surviving brothers and sisters are taxed at a 35% rate on inheritances up to FF 150,000 and 45% on the amount over FF 150,000. Other close relatives are taxed at a 55% rate, and other persons at a 60% rate.
The following items are exempt from inheritance tax:
- works of art, if the collection is offered to the state;
- life insurance contracted by the deceased (subject to certain conditions concerning age); and
- gifts made to third parties, prior to the death, not disclosed to the tax authorities and not mentioned in a will.
If a donor is a resident of France, the donee must pay tax on gifts of worldwide net assets. The rates are generally the same as for inheritance taxes.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. For additional information contact Pierre Knoepfler on +33 (1) 46 93 70 00.
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