My separated husband, who lived in France, died nine years ago. We have no children. We had separated but never divorced. A neighbour wants to buy the house for €400,000. I am worried about penalties and tax as I think I had to deal with this within 12 months and have done nothing about it.
The starting point here is to check that you do inherit the estate – for example, under his will, or under a communauté universelle marriage regime with a clause to benefit the surviving spouse.
You might inherit the property automatically if the title deed contained a tontine clause, or if you owned the bare ownership nue-propriété and your husband just had the life-interest usufruit.
If there is no will, and no other survivorship mechanism in place, French intestacy laws apply.
As there are no children, you would inherit the whole estate as long as your late husband had no surviving parents (otherwise, they would be entitled to a quarter each).
Regarding time limits for dealing with the estate, for a French-resident deceased there is a six-month time limit within which to file the inheritance tax return and pay the tax.
It is 12 months for a non-French-resident deceased if they have French assets to administer.
This is the time limit that triggers the possibility of interest and penalties against late inheritance tax.
Any overdue inheritance tax attracts interest at 0.2% per month, and an inheritance tax penalty starting at 10% after the 13th month.
Thankfully, as a spouse, you have a full exemption from French inheritance tax.
As such, no penalties or interest arise, and there is no penalty for not having dealt with the estate promptly, as long as no inheritance tax is due.
You might, however, face capital gains tax on your husband’s share if it has increased in value since the date of death.