Each share in the estate is subject to death duties. The heirs are jointly liable for the payment of these taxes (Art. 1709 of the French Civil Code). Depending on the category of beneficiaries, a tax allowance can be applied in order to reduce the amount of the owed succession tax. The amount of this tax will be calculated according to a rate on each share received by the heirs or legatees.
1) The inheritance tax allowances:
A tax allowance is applicable to the net share of each heir and varies according to their quality.
| Quality of beneficiary | Amount of tax allowance |
| Children | 100 000 € |
| Grand-children | 1 594 € |
| Ascendants (parents, grand-parents) | 100 000 € |
| Brothers and sisters | 15 932 € |
| Nephews and nieces | 7 967 € |
In the absence of any other tax allowance, whichever the family tie with the deceased, or in the absence of family tie, the tax allowance will be of 1594€ on each inheritance share.
2) The inheritance tax rates :
| Transmission between: | Taxable share after tax allowance | Rate |
| Spouse or partner | < 8.072 € | 5% |
| Between 8.072€ and 15.932€ | 10% | |
| Between 15.932€ and 31.865€ | 15% | |
| Between 31.865€ and 552.324€ | 20% | |
| Between 552.324€ and 902.838€ | 30% | |
| Between 902.838€ and 1.805.677€ | 40% | |
| > 1.805.677€ | 45% | |
| In direct line | < 8.072 € | 5% |
| Between 8.072€ and 12.109€ | 10% | |
| Between 12.109€ and 15.932€ | 15% | |
| Between 15.932€ and 552.324€ | 20% | |
| Between 552.324€ and 902.838€ | 30% | |
| Between 902.838€ and 1.805.677€ | 40% | |
| > 1.805.677€ | 45% | |
| Living or represented brother or sister | < 24.430 € | 35% |
| > 24.430 € | 45% | |
| Parent until the 4th degree | On the totality above the tax allowance | 55% |
| Parent above the 4th degree and non parent | On the totality above the tax allowance | 60% |
It must be highlighted that the application of these tax allowances and rates can be put into question during the calculation of the taxable share taking into account prior donations.
Any donation reduction (“rapport de donations”) to an heir in order to determine the share of each heir in the division of the estate, is deducted from the taxable share of the heir undertaking the reduction.
However, this does not apply to tax reductions that allow to calculate the tax. This reduction is not operated for family donations exceeding a certain sum and donations consented and presented to the formality of registration more than 15 years after the death.
Therefore, the tax reduction will have an impact on the calculation of rights:
- Personal deductions are only applied once the deductions of those interested that benefited from the prior donations have been made;
- The lowest brackets of a progressive rate can no longer be used;
- The reductions of rights for family charges are applicable only after the deduction of already given reductions.
In case of recall, the tax authority possesses a larger time limit to undertake a recovery of the valuation of the assets subject to a prior donation.
Payment of the inheritance tax must be made in cash at the moment of the registration of the declaration. In order to obtain a payment delay, the heirs can ask for a payment in installments. It can be requested in the declaration or by simple letter enclosed to the declaration. The taxpayer must present an offer in sufficient guarantee to cover the entirety of the amount to be paid.
The tax authority must within three months accept or refuse the request.
The interests applicable to the credit correspond to the average effective rate used by credit establishments during the fourth trimester of the year preceding the one of the request for mortgages at a fixed rate consented to individuals, reduced from a third and rounded to the first decimal.
Maître Frédéric Michel – Fairfield Law firm | Lawyer in Cannes
