What is tax benefit of money in will to charity?

I know that you can receive a significant crédit d’impôt (tax credit) on donations made to approved French charities. However what happens if you wish to donate to charities from the part of your estate that is disponible after you die? Is there any tax advantage to this? Can you advise on how to leave money to charity in the most efficient way for the charity and for the other heirs? M.R.

24 January 2018
By Hugh MacDonald

In France it is the beneficiary who pays the inheritance tax in function of their ‘blood’ relationship with the deceased, and not the estate as a whole as in the UK, so each person is taxed in isolation of the other beneficiaries.

In the case of charities, however, as long as the charity is registered, a bequest to it is generally exempt from inheritance tax.

Most forms of not-for-profit association or foundation are eligible for such tax-free bequests. This includes all of the large charities deemed d’utilité publique as well as associations that are cultural, humanitarian, educational, scientific, sporting, in defence of the environment etc. If in doubt, however check with your chosen charity/charities.

There would, however, be no additional benefit such as tax reductions for other heirs.

 

Why should I pay social charges?

I came to France from the UK 11 years ago. My UK old age pension means that my health expenses are covered. This year I had to pay social charges. The French tax office explained that I must pay because I have a Carte Vitale regardless of who pays my health expenses. Would you please tell me if this is correct. B.E.

 

Looking at your avis d’imposition tax statement which you sent, it appears the social charges have been levied on your investment income, not on your pensions, so all is probably in order. Investment income does not escape social charges whether you are a pensioner or not. It is only UK pension income that is exempt in the case of having your healthcare funded by the UK.

I should point out that it is not just because you have a UK pension that you have French health cover but because of the EU system of free movement, and having obtained the right to have these health rights transferred from the UK through the European S1 certificate from the DWP.

 

Should I tell Cpam I am French?

I have started to draw my state UK pension and have just become French. I have never worked in France. My husband was retired when we came so my eligibility to French healthcare is related to his. As I am now French does anything change? R.L.

 

Your change of nationality does not affect your healthcare rights (other than the fact it gives you an unconditional right to live legally in France and hence to be in the French system under PUMA if you had no other rights). You should however obtain an S1 based on your own pension, not least so as to avoid any complications if your husband was to die before you.

 

Have rules changed for B&Bs?

I am a retired divorcee with a British state pension. I moved to France 11 years ago and am running a B&B. I registered it at the start at the mairie and was informed that as it was a supplementary activity, I did not need to do anything further, such as setting up a formal business with Siret number, other than declare the income for tax purposes. I have now heard that the law has changed and that everyone is obliged to formally become a micro-entrepreneur. Is this true?  D.M.

 

No, this is not true based on the facts you state. There has been no legal change as such, but the current law is now often being applied in a stricter manner, whereas in the past the tax authorities have often turned a blind eye to the fact that there has been no business registration for this kind of income.  Any chambre d’hôte activity of an ‘habitual’ nature is meant to be registered at the chamber of commerce as a business (which will also mean obtaining a Siret number). The rules on chambres d’hôtes say you can be dispensed from paying business social charges on this kind of income (whether under the simplified micro-entrepreneur social charges system, or otherwise) if you have annual letting income of less than €5,100. In this case the income is subject to social charges on investment income, at 17.2%.

 

Will tax cut benefit holiday home?

I want to understand the implications of Macron’s reductions in taxe d’habitation for lower earners. I am UK resident and a non-earner in France. Will there be an effect on the tax on my French holiday home?  M.E.

 

Unfortunately the reductions for middle/low-income households, which start with one third off this year will only apply to main residences. President Macron has referred to intentions to remove the tax for everyone with a further reform in 2020 but, to date, this has not been advanced.

 

Non-residents and Orange Bank

I am interested in the new Orange Bank for online/smartphone banking. Is this open to non-French residents? (We have a house in France but are UK-domiciled).  M.O. 

 

Orange Bank is in fact only Orange buying some 65% of the share capital of Groupama Banque and launching the facility online.

Unfortunately it is only available for French residents. However, as you have a French address you should have no difficulty opening an account with other banks in France that have an internet service.

 

 

Reader's query answered by Hugh MacDonald

If you have a financial query send it to news@connexionfrance.com. We select questions for answer every edition

The information here is of a general nature. You should not act or refrain from acting on it without taking professional advice on the specific facts of your case.
No liability is accepted in respect of this article. It is intended only as a general guide. Nothing herein constitutes actual financial advice.

The Connexion welcomes queries and publishes a selection with answers every edition. However, please note that we cannot enter into correspondence on money topics. Queries may be edited for length and style. Due to the sensitive nature of topics we do not publish full names or addresses on these pages.

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