UK Office: 0044 (0)1440 820 358

Clé France

The French Property Network

×

Warning

The form #26 does not exist or it is not published.

Case Study: non-married couples and French property

The following case study shows the importance for non-married couples to take legal & tax advice when purchasing properties in France.

In contrast to married couples, non-married couples ('concubins') have low legal protection and are subject to very high inheritance tax (at a rate of 60%) in France.

Cle France Couples

Question:

My partner and I live in a house in France, owned by my partner.  My partner would like to make a Will which allows him to leave the house upon his death to his brother and his brother’s children, but should I still be living (I am 10yrs younger than my partner), to also allow me to continue to live in the house until my death.   The house then passing to the brother and his children on my death. Please advise if the wishes of this Will would this be possible.

For your information:  Neither my partner or myself have children.  We are not married.  We do not want to get married.  I do not wish to have a legal right to the property, as I wish the property to go to my partner’s family and do not want it to become part of my estate. My partner is 61 and I am 51 years old.

Our answer:

As you and your partner are not married, you have no legal rights to stay in your partner’s property until your death unless you both take legal measures now to protect your interests.

Because your partner has no children, he is free to bequeath his property to whoever he wishes to. In France, only children are privileged heirs and must receive a minimum proportion of the estate.

To resolve this, your partner would need to make a will bequeathing you the “usufruit” (the right to use and enjoy the property until your death) of the property and the “nue-propriété” (bare ownership) to his brother and nephews. Upon your death, the “usufruit” will then be transferred “in fine” to your partner’s heirs.

Perhaps, the preferred and safer solution for you would be if your partner now offered you (via a lifetime gift) the “usufruit” of the property without waiting for the will to be drawn up, partly because a will is normally confidential and could be amended by your partner at any time during his life.

In view of above, I must advise you that you will have to pay inheritance or gift taxes at a rate of 60% of the 'usufruit' ‘s value.

The value of the 'usufruit' will depend on your age at the time you receive it.  It will be calculated in accordance with the following scale:

10% of the property value, if the usufructuary (the person receiving the 'usufruit') is over 91 years old

20% of the property value, if the usufructuary is between 81 and 90 years old

30%  of the property value, if the usufructuary is between 71 and 80 years old

40% of the property value, if the usufructuary is between 61 and 70 years old

50% of the property value, if the usufructuary is between 51 and 61 years old

For example, if the property current value is €200,000.00 and you receive today the “usufruit”, the value of the “usufruit” will amount to €100,000.00 (50% of the property value). You will have to pay inheritance or gift taxes of €60,000.00 (60%).

As you and your partner do not wish to get married, a solution to minimise your tax liability would be to enter into a PACS (“Pacte Civile de Solidarité” or French Civil Partnership), with the aim to organise the division and possession of your respective assets. The PACS can be possible only if you are currently residing in France and there are no inheritance taxes between PACS partners on death. PACS partners benefit from a tax allowance of €80,724.00 on life time gifts and are taxed on the balance increasing progressively from 5 per cent to 45 per cent.

This article was written by Loic Raboteau, French Legal Advisor and director of French Legal Consulting.

Francophile legal Consulting can assist you with international property matters. For more information on this topic, please do not hesitate to contact Loic Raboteau, managing director by completing the form below.

The information that you give and that we obtain through you using this website may be used by this Company and by our partner companies only for purposes in connection with your use of this website and for marketing activities of this Company and partner companies. By using this site you confirm your consent to this. If you do not want to receive any marketing information from this Company and/or our partner companies then please notify us.

A little more about FRANCOphile Legal Consulting Ltd.

The company was created in response to the need of legal experts for international private clients and businesses. People are no longer confined within their own country boundaries to work, create a business or purchase assets. National, international laws and new technology have enabled people and businesses to move and expand internationally, creating a demand to resolve cross-border issues.

We are a London-based legal consultancy company dedicated to addressing our clients’ international needs. Whether you are a private individual moving or investing in a foreign country, an entrepreneur, or a business willing to expand internationally, FRANCOphile Legal Consulting Ltd will cater your specific requirements and will look after your interests in the short and long term.

Benefiting from an extensive network of international lawyers, solicitors, accountants and financial advisors based in London and in several jurisdictions, FRANCOphile Legal Consulting Ltd is able to handle your interests in different countries around the world.

Our approach and solutions are tailored to our clients’ needs. We believe that our clients are unique and warrant distinctive service.

Our international coverage includes France, London, Tunisia, Morocco, Egypt and Mauritius. If you would like to know more about us then fill out the contact form above and we will be right back to you.


Comments
(Please login/register to leave a comment)
(There are no comments yet)

Quick Search

Minimum Beds/Baths

Price Range

Land in sq metres (1 acre = 4000M2)

Join the Mailing List

Select subscriber list :

Property of the Week

Property of the Week
 
Detached House with Character

Rural Setting, Normandy

Bargain Price Only 38,200 €