1. Inheritance tax
Inheritance tax is the tax due to the State levied on the transmission of the deceased’s estate to the heirs. Calculation of the inheritance tax depends on the amount of the share transferred and the degree of kinship with the deceased.
The surviving spouse and the Civil union partner, under article 796-0 bis of the General Tax Code, are exempt from inheritance tax.
In regard to lineal heritage, article 779 of the General Tax Code provides for a “reduction of €100,000 on the share of each of the ascendants and on the share of each of the living or represented children as a result of predecease or renunciation”. It also specifies that any heir, legatee, or donee unable to work under normal conditions of profitability due to physical or mental, congenital or acquired infirmity, benefits from a reduction of €159,325.
2. Exemptions and reductions
Exemptions and reductions depend on the degree of relationship and are set according to the following criteria:
|Spouse or civil union partner||Exemption|
|Ascendant, child (living or represented as a result of predecease or renunciation)||100 000 €|
|Brother or sister (living or represented as a result of predecease or renunciation)||15 932 €|
|Brother or sister (single, widowed, divorced, or legally separated fulfilling the following double condition: being over 50 years old or infirm AND having been constantly domiciled with the deceased for the 5 years preceding the death)||Exemption|
|Nephew and niece (through their own initiative)||7 967 €|
|Disabled||159 325 €|
|Any heir or legatee in the absence of another reduction||1 594 €|
The calculation of inheritance tax also depends on the amount of the share collected through the estate of the deceased.
Inheritance tax calculation scale:
|Taxable share after reduction||Rate||Levy|
|A – Lineal|
|< 8 072 €||5 %||0 €|
|Between 8 072 and 12 109 €||10 %||404 €|
|Between 12 109 and 15 932 €||15 %||1 009 €|
|Between 15 932 and 552 324 €||20 %||1 806 €|
|Between 552 324 and 902 838 €||30 %||57 038 €|
|Between 902 838 and 1 805 677 €||40 %||147 322 €|
|>1 805 677 €||45 %||237 606 €|
|B – Between brother and sister (living or represented)|
|<24 430 €||35 %||0 €|
|>24 430 €||45 %||2 443 €|
|C – Between collaterals up to the 4th degree|
|On the net taxable part||55 %||0 €|
|Between relatives beyond the 4th degree and non-relatives|
|On the net taxable part||60 %||0 €|
3. Settlement of inheritance tax
Article 800 of the General Tax Code (CGI) indicates that heirs, legatees, or donees (or their guardians/curators) are required to complete a declaration of inheritance. It must be sent to the tax authorities within 6 months of the death. This period can be extended to 12 months if the deceased died abroad.
As part of its mission, the notary reconstitutes, through the help of the heirs, the estate of the deceased and prepares the draft declaration of succession which also serves as a tax declaration to the heirs.
The following are exempt from filing a declaration of succession: lineal heirs, the surviving spouse and the partner related through a civil union, if the gross estate assets are less than 50,000 euros and on the condition that the aforementioned individuals haven’t previously benefited, from an unregistered or undeclared donation or manual donation from the deceased.
In the case of a non-compliance with the deadline for filing the succession declaration and the payment of transfer duties, penalties may be greater. They are calculated as follows:
- Late payment interest: 0.20% of the number of duties to be paid per month of delay.
- Increase in the case of filing the succession declaration more than 13 months after the death: 10% of the amount of the duties due, to be added to the interest on late payment.
4. Declaration of inheritance
The declaration of succession is drawn up in duplicate on forms, which are issued by the administration or by the notary who helps his client complete it.
It must contain the estimate of all the assets dependent on the deceased’s assets on the day of death (whether the assets belonged to the deceased in full ownership or in bare ownership) as well as any donation granted by the deceased and accepted by the donee before death. It also includes the reductions, exemptions, and rights to be paid by each of the heirs to the tax authorities.
The heirs or the notary must send the declaration of succession, together with the transfer duties, to the registration service of the place of residence of the deceased. If the deceased passed away abroad, the declaration of inheritance as well as the transfer duties must be sent to the non-resident tax service.
The tax authorities can check the declaration of inheritance, request clarifications and justifications or propose a rectification of the declaration. It has until December 31 of the 6th year following the filing of the declaration of succession to take action.