Do I have to pay French inheritance tax on a British inheritance?

Reader’s question: What are the rules regarding inheritance and foreign taxes? My husband is to inherit a sum of money for which probate will have been paid to the British government. If we transfer part of it to our French account, will we have to pay taxes in France again? We live in France

The UK has a zero-rate inheritance tax bracket for an estate worth up to £325,000, although this threshold may increase depending on the relationship of the testator to the person to whom he is entitled. bequeath his property.

If the deceased person made lifetime donations in the seven years before their death, the £325,000 will also be reduced.

Beyond the zero rate bracket, the remaining estate is taxed at 40%. This is paid before the distribution of assets, unlike French inheritance tax, which is paid by the beneficiaries.

If you are a French tax resident, you are assessed on your worldwide income, so you can assume that a UK inheritance would be taxable in France.

However, following the Double Inheritance Taxation Treaty of 1963, a UK based person’s inheritance of UK based assets can only be taxed in the UK, so once the UK Inheritance Tax (IHT) has been deducted, there will be nothing left. pay. You cannot be taxed twice.

However, the situation is different if the deceased person also owned French property. In this case, this part of the estate could also be subject to French inheritance tax. The most common situation where this would apply would be a UK resident who dies leaving a French holiday home.

In this case, however, the UK should allow a tax credit on the beneficiary’s share of UK inheritance tax, up to the amount of the French inheritance tax.

The double taxation agreement only concerns inheritances and not life gifts.

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