When someone passes away, their assets transfer to heirs, but this handover incurs inheritance tax paid to the state. Established during the French Revolution, this tax promotes equality by having those with greater wealth contribute proportionally to public finances.
Following a death, an inventory of the deceased's assets—such as real estate, furniture, bank accounts, savings, and investment portfolios—is required to determine each heir's or legatee's share, as outlined in the will. These assets are valued at their market price on the date of death. This transfer must be declared to tax authorities, triggering inheritance tax. Heirs or legatees can decline the inheritance to avoid these duties.
While a notary isn't always required, consulting one is wise for complex estates or unique marital situations. Notary fees are proportional to the estate's value.
Heirs and those named in the will owe inheritance tax. Exemptions apply to the surviving spouse, PACS partner, and—under specific conditions—siblings who cohabited with the deceased.
A declaration must be filed within 6 months for deaths in metropolitan France or 12 months for those abroad. Direct line heirs (parents, children, grandparents, grandchildren) and surviving partners skip this if the gross estate is under €50,000 with no prior gifts.
Tax is based on the estate's value and heir relationships. Start with 'net taxable assets': total assets minus debts. Divide into shares per legal priority, will, or prior gifts. Apply allowances, like €100,000 for parent-child transfers or €159,325 for disabled heirs.
Tax rates apply progressively: 5% on shares up to €8,072, rising to 45% above €1,805,677 for direct heirs. Reductions exist for heirs with dependents or war-disabled status. Payment is due with the declaration, but installments or deferrals are possible.
