French Inheritance Tax for Non Residents

Buying a property in France as a non-resident is straightforward. Passing it on to the people you actually want to inherit it is where the system fights you. French succession law operates on a principle of forced heirship (reserve hereditaire) that overrides your personal wishes and guarantees your children a fixed share of your French real estate — regardless of what your will says and regardless of where you live.

This catches foreign buyers off guard because most common-law countries (the UK, the US, Australia, Canada) give you complete testamentary freedom. In France, your children are protected heirs (heritiers reservataires), and depending on how many you have, they are entitled to between one-half and three-quarters of your estate. You can only freely dispose of the remaining fraction, called the quotite disponible.

How Forced Heirship Works

The reserve hereditaire guarantees your children the following minimum shares of your estate:

• One child: One-half of the estate is reserved; you can freely dispose of the other half.
• Two children: Two-thirds is reserved (split equally between them); you can freely dispose of one-third.
• Three or more children: Three-quarters is reserved; you can freely dispose of one-quarter.

Your spouse is not a protected heir under the reserve hereditaire (that protection was removed in 2007). However, your spouse does have a legal right to either a one-quarter share in full ownership or a usufruct (right of use) over the entire estate.

The practical problem: if you own a French property worth 400,000 euros and you have two children from a previous relationship, your current partner cannot inherit more than one-third of the property's value under French law — regardless of your will.

The Brussels IV Option

The EU Succession Regulation (Brussels IV), which took effect in August 2015, introduced a partial escape route. It allows any person who owns property in an EU member state to elect, in their will, that the law of their nationality should govern their entire estate rather than the law of the country where the property is located.

If you are a British, American, or Australian citizen, you can insert a Brussels IV election into your French will specifying that your home country's succession law applies. Since these countries offer full testamentary freedom, this effectively allows you to bypass French forced heirship rules and leave the property to whoever you choose.

Two critical caveats:

Brussels IV governs succession law, not tax law. Even if you successfully elect UK or US law to distribute the property, French inheritance tax rates still apply to the transfer. The tax saving is zero — you are only gaining control over who inherits, not how much tax they pay.

Post-Brexit uncertainty for British nationals. The UK was never a signatory to Brussels IV (it opted out). French courts have historically accepted Brussels IV elections by nationals of non-EU countries, including the UK and the US, but the legal basis is a choice-of-law principle, not a treaty right. Most French notaires continue to draft these elections for British clients, but it is worth discussing the specific legal standing with an English-speaking notaire who handles cross-border successions.

French Inheritance Tax Rates

French inheritance tax (droits de succession) is calculated based on the relationship between the deceased and the beneficiary. The rates are steep for anyone who is not a direct-line descendant or spouse:

Spouse or civil partner (PACS): Fully exempt from inheritance tax since 2007.

Children (direct descendants): Each child receives a personal allowance of 100,000 euros. Tax on the amount above the allowance is progressive, starting at 5% on the first 8,072 euros and rising to 45% on amounts above 1,805,677 euros.

Siblings: Allowance of 15,932 euros. Tax rates of 35% up to 24,430 euros and 45% above.

Unmarried partners and unrelated beneficiaries: After a minimal 1,594 euro allowance, the tax rate is a flat 60%.

That last category is the one that devastates foreign buyers in unmarried partnerships. If you own a French property jointly under standard indivision (the default joint ownership structure) and you are not married or in a PACS, your partner will owe 60% inheritance tax on the value of your share. On a 200,000 euro half-share, that is 119,036 euros in tax.

Structural Solutions: Tontine and SCI

French law provides two mechanisms to mitigate these outcomes:

The Tontine Clause (Clause d'Accroissement)

A tontine clause is inserted into the acte de vente at the time of purchase. It specifies that upon the death of one co-owner, the surviving partner is retroactively deemed to have owned the entire property from the date of acquisition. The deceased partner's share is treated as if it never existed in their estate, which means French forced heirship rules cannot apply to it.

The tontine protects occupancy and avoids forced heirship, but it does not eliminate tax. The surviving partner must pay transfer taxes (droits de mutation a titre gratuit) on the deceased partner's share, calculated at the applicable rates based on their relationship. For married couples and PACS partners, the transfer is tax-free. For unmarried partners, the 60% rate still applies — though this may still be preferable to the alternative of having children from a previous relationship force a sale.

The Societe Civile Immobiliere (SCI)

An SCI is a French non-trading real estate company that owns the property. You and your partner (or family members) hold shares in the company rather than owning the property directly. This converts real property (immeuble) into personal property (meubles), which can allow foreign owners to bypass French forced heirship rules.

Key advantages: you can transfer shares gradually to children during your lifetime using the annual gift allowance, reducing future inheritance tax exposure. The SCI also provides management continuity — the death of one shareholder does not trigger a forced sale.

Key costs: forming an SCI costs 1,500 to 3,000 euros. The company must file annual accounts and a tax return. You must also file the annual 3% entity tax declaration (Form 2746-SD) by May 15 each year, disclosing all shareholders who hold more than 1% of the capital. Failing to file triggers a 3% tax on the market value of the property — every year.

Planning Before You Buy

The inheritance structure needs to be decided before you sign the compromis de vente, not after. The tontine clause must be written into the original deed. Setting up an SCI after purchase means transferring the property into the company, triggering a second round of transfer taxes on the full value.

For a detailed comparison of ownership structures — indivision, tontine, SCI, and the Brussels IV election — the Buying Property in France — Expat Guide includes worked scenarios for couples, families with children from prior relationships, and unmarried partners buying together.

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