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Expert advice on succession tax, planning permission and dealing with noisy neighbours
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QMy husband and I are currently drafting our will and want our French property to go to a sibling (we do not have any children). The beneficiary would ultimately sell the property and he is worried that he would have to pay French succession taxes in advance of inheriting the property, leaving him out of pocket until the house can be sold. Can you tell me if this is the case? Could he sell the house first and then pay any taxes due? Joanne Russell
APresumably you will have decided whether to include your French property within your English wills, or whether you should have separate French wills to deal with the French estate (the choice depends on your circumstances, and should benefit from advice in advance from specialist solicitors). Either way, it is probably the case that on the death of the first of you, the survivor would inherit all of the property, with the eventual beneficiary inheriting at the time of the second death.
It will then be for the beneficiary to decide whether to keep the French property or sell it. If the beneficiary chooses to keep it, he will have to complete the succession process with a notaire, and pay any inheritance tax due in France at that point. The amount of tax payable would depend on which of you dies first: rates would be lower if it is the beneficiary’s blood relative who is the survivor of you two.
If he chooses to sell, he can put the property on the market, and can sign the initial contract (normally called the promesse de vente or compromis de vente), without having to complete the succession process. The succession process is then finalised just before the final deed of transfer (the acte de vente) is signed. The benefit of this is that any tax can be paid directly out of the proceeds of sale.
There are, however, time limits by which the tax should be paid; if the house is not sold by such a point, the tax office may wish to impose a late payment penalty and interest. The tax office will occasionally be prepared to negotiate on the penalties and interest, although there is no guarantee of this. The time limits depend on whether the deceased died in France or elsewhere: if in France, the succession should be wrapped up within six months, if elsewhere, then that period is one year. MATTHEW CAMERON