French inheritance tax

When are French droits de succession payable?

French inheritance tax (droits de succession) is a separate issue to ‘inheritance law’, which relates to how property may be left.

For example, a person’s estate could be subject to Californian law but still assessable for French inheritance tax.

In cross-border inheritances, taxation differs depending on whether a treaty on inheritance tax exists between the other country and France. A list exists. They may or may not also deal with gift tax (this is the case with the US). 

As to which inheritances attract French tax, this depends on where assets are located and where the deceased and recipients are fiscally domiciled. 

If the deceased was French-domiciled, beneficiaries are liable to pay French tax on all assets received, located in France or abroad, unless an exemption applies.

The treaty with the US allows that most forms of US-situated assets received from a US resident, are not taxable for recipients in France. However, there is no French law exempting such inheritances from having to be declared in France to the recipient’s tax office. 

The only exemptions from French succession declaration obligations are for children or spouses where the total value of the estate was less than €50,000, or for other beneficiaries if the estate was worth less than €3,000.

The notaire dealing with the estate of a person who dies in France will establish the list of their worldwide assessable estate, from which certain deductions can be made, including costs of dealing with the succession, debts of the deceased existing at the date of death, funeral costs (within certain limits), gifts or legacies to certain recognized charities, and a 20% allowance against the value of the deceased's home if at their death it was also the home of the deceased's spouse, civil partner or dependant child.

Listed historic monuments are exempt under conditions and under certain conditions there are partial exemptions for forests, farmland, sole trader firms and certain company shares.

Once the estate's net value has been calculated, inheritance tax is paid by each beneficiary on their own share subject to allowances and rates that vary by relationship; it is not taken off the estate as a whole. A simulator exists to check what a person may be due to pay.

Importantly, a spouse or a French Pacs partner (or other foreign civil partnership recognised by France) pay no inheritance tax and children only pay inheritance tax after an allowance of  €100,000.

On the opposite end of the scale are gifts between unrelated people which are taxed at 60% after a tax-free band of just €1,594; the same allowance applies to certain distant relatives, though with a 55% rate.

There is an allowance of €159,325 for children with a physical or mental disability preventing them from working, which can be combined with other allowances.

Allowances are reduced by amounts that the person benefited from when receiving lifetime gifts from the deceased in the last 15 years.

With regard to rates, after their allowances, direct-line heirs (parents and children or grandchildren) pay according to rising bands starting at 5% up to €8,702, then 10% up to €12,109, then 15% up to €15,932, then 20% up to €552,324, with higher rates up to a maximum of 45% for amounts over €1,805,677.

Paying inheritance tax

Tax has to be paid, to avoid penalties, within six months of the death if the person died in Metropolitan France or 12 months in other cases.

The tax is paid at the time of declaration of the inheritance. It can be paid in cash, by cheque or, with agreement, in other ways, such as with works of art. It is possible to arrange to pay in installments over one year (though additional interest accrues in this case) or three years if the estate is more than 50% 'non-liquid assets'.

It is also possible to delay payment of inheritance tax if you inherited the nue-propriété of a home (paiement différé), though the same interest is also applied. 

In this case interest is paid annually on the value of the nue-propriété.

Alternatively the heirs may opt to have no interest payments but to pay inheritance tax in full on the complete value of the property, once they come into full ownership. 

US estate and gift tax considerations

If you move to France, you should also note potential implications with regard to US estate tax. 

The US generally taxes its citizens on worldwide estates regardless of residence.

However, the US-France 1978 estate and gift tax treaty helps clarify how assessment and taxation for estate/inheritance taxes works for Americans living in France. 

France will generally have primary taxing rights over French-situated assets, with the US also including worldwide assets in its assessment but granting credits for French tax paid.

The opposite applies in the case of real estate or businesses located in the US, with the US having the primary taxing right, and France allowing a tax credit against any US tax paid. 

Note that the US has a very high estate tax exemption amount of around $15million (with rates up to 40% applying on amounts above this), so if the worldwide estate is below that there is no US estate tax to pay.  

Also, as a general rule, filing a federal estate tax return (Form 706) is not necessary unless the estate is approaching the exemption threshold amount, though filing may still be advisable in some cases, for example to preserve a surviving spouse’s exemption. In some cases, state estate taxes also exist, with specific rules. 

US reporting obligations for foreign bank accounts (FBAR) may continue during the estate administration period until accounts are closed or funds distributed.

Note also that the US reserves the right to assess lifetime gifts for US gift tax, with filing required if you give a gift of more than $19,000 to one person in a given year (Form 709) or if you receive a gift of more than $100,000 from a non-American citizen (Form 3520). Gifts between spouses do not attract US gift tax unless the recipient is not American, in which case there is a $194,000 allowance as of 2026.

Rules in the US-France treaty can come into play to avoid double taxation between the US and France.