Extra time now possible to pay French inheritance tax in instalments

We explain the changes to the inheritance tax payment system

Payment by instalment is not automatic and must be requested when the notaire is dealing with the inheritance
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New rules are now in place regarding requests for extra time to pay French inheritance tax.

Usually, heirs of a person who dies in France are required to settle the bill within six months of death.

However, a system called paiement fractionné allows it to be paid in instalments.

This must be requested by heirs at the same time the inheritance is being dealt with by the notaire, and is not automatic. It is more often granted where heirs can offer some form of security upfront.

Note that in the case of bloodline children, there is an allowance of €100,000 before inheritance tax becomes due on the part above that.

Read more: Does a UK will allow children to avoid French inheritance tax?

Three instalments can be spread over 18 months

Under the new rules, the tax office will have to give its decision within two months instead of four, as previously.

If granted, it will be possible to ask for payment in three instalments, over 18 months. Formerly, this was a year.

As before, where the estate consists of at least 50% of ‘non-liquid’ assets, this can be increased to seven payments over three years.

Non-liquid assets include those that are not easy to cash in on quickly, such as real estate, works of art and even non-publicly-listed company shares.

Read more: Married, Pacs, cohabit: your French home rights after partner’s death

Agreement from all heirs is required

As before, the tax office might ask for extra guarantees, in which case the heirs now have two months to arrange this, instead of one.

Interest is, however, due, which last year was at 1.7%. This year’s figure has not been clarified.

If some heirs want to pay their tax in instalments but others do not, the agreement of the latter is required.

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