Business Law: Owners of property overseas need to plan carefully, warns Matthew Cameron

Matthew Cameron of Ashton KCJ

Matthew Cameron of Ashton KCJ - Credit: Archant

If you own or are thinking about buying a home in France, one of the most important areas to consider is the question of French inheritance law and tax.

The rules of French inheritance law and tax differ substantially from English law; even the way inheritance tax is imposed is completely different.

Under French law, a strict order of succession can be imposed, even if this is not necessarily what may have been intended by the deceased. If you own a home in France, it is important to think about these issues sooner rather than later.

As an example, children have a right to inherit at least a part of their deceased parent’s French property. This may be of no concern to many; indeed, many of our clients confirm that they would want to leave as much of their French estate as possible to their children, in the knowledge that the quicker assets are passed down the family line, the more inheritance tax is likely to be saved.

Yet that is not always the case. Under French rules of succession, there is a difference between children and step-children, especially in relation to inheritance tax consequences. There may, therefore, be an overriding intention to ensure that it is the surviving spouse, rather than children, who would inherit the property in the first instance.

There are also new rules coming into force in 2015 in relation to the succession of a person’s estate in other European jurisdictions. If you own assets in another country, you will, therefore, need to start planning for these now.

Add to that the fact that it is generally unwise – again largely for tax reasons – to leave assets in trust as might commonly happen under English law, then it is understandable that our fixed-fee French estate planning report service has proved popular since we rolled it out last year.

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If you are thinking about buying a property in France, or if you already own one and may benefit from a review, then we would be happy to talk to you about how we may help.

: : Matthew Cameron is a property specialist with Ashton KCJ Solicitors.

This article is for general information purposes only and does not constitute legal or other professional advice. We would advise you to seek professional advice before acting on this information.

Ashton KCJ is authorised and regulated by the Solicitors Regulation Authority (Recognised Body number 45826).