Good news for the 500,000 Britons who own French property, says Money Marketing. President Nicolas Sarkozy’s tax reforms, introduced with immediate effect, mean that your children are likely to pay little or no inheritance tax (IHT). The French IHT threshold is rising from e50,000 to e150,000 per parent for each child. Since any French asset is taxed in France the change will benefit holiday home owners as well as residents.
The other welcome change is that IHT will no longer apply to assets left to a spouse, “mirroring the position in the UK“, says David Budworth in The Sunday Times. Until now, many Britons have been caught out by French law, which states that French assets left to a husband or wife are liable to death duties. This is no longer the case. Property owners should, however, remember that British inheritance tax applies to your worldwide assets for as long as you remain domiciled in the UK. If you do move to France permanently it is also worth noting French succession laws: unless you take steps to avoid them, “your children will have more claim to your estate than your surviving spouse“.