Can I leave house to grandchildren, not my child?

I am a widow and have made a will under English law. I wish my grandchildren, not my child, to inherit my home. As minors, will they pay inheritance tax? I have appointed two trustees.

12 November 2017
By Connexion journalist

French inheritance tax is applied (whether using English or French law) giving a tax-free allowance of €31,865 from you to each grandchild for lifetime gifts, or €1,594 on inheritance (then sliding scale tax, from 5% to 45%).

In French law your child cannot be disinherited. If they die before you, or give up claim, their children can obtain the €100,000 tax relief available for children.

A grandparent can make a trans-generational lifetime gift, with grandchildren and parent agreeing to share the parent’s gift allowance of €100,000. An English national can elect English law, and leave the whole estate to the grandchildren. However, this does not affect tax.

Appointing trustees to deal with French assets should be treated with caution as it could be problematic and costly.

A minor can directly inherit property but would need a parent, legal representative or third-party administrator to accept the inheritance on their behalf (but preferably not as a trustee).
Any letting, sale, mortgaging etc of the assets would require representation for the minor. A juge des tutelles could be appointed – but this is a court process and thus not straightforward. Note, too, the minor may become entitled to the funds at 16. Assurance vie may be of interest and an advisor can set an age limit for the grandchildren’s entitlement.

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2017 Inheritance Law guide (PDF version) - For expats or second home owners - 48 pages
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The guide, to be published on September 25, 2017, includes a chapter on the formalities following a death in France, issues of dependency, and reviews changes to French inheritance law affecting expatriates and second-home owners, which came into force on August 17, 2015
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