See also: Law zone
Prior to April 2009, if you had a UK civil partnership (CP) and moved to France, it was not recognised in France, and you were not be able to enter into the French equivalent known as PACS (Pacte Civil de Solidarité) unless the UK CP was dissolved first.
Many British expatriates in France who had a UK CP found this out to their dismay, and protested to politicians in both France and the UK to get the matter on a more fair footing; for while the French authorities did not recognise a UK CP at all, the UK recognised a French PACS between a same-sex couple (but not for an opposite-sex couple), viewing it as a UK CP for all UK purposes.
However, under a change to the law in France (in April 2009), UK CPs are now recognised in France, as are civil partnerships registered abroad elsewhere.
The main difference between a CP and a PACS is that only homosexual couples can register a UK CP, while in France same- or opposite-sex partners can register a PACS. Civil partnerships were introduced in the UK in December 2004 to give same-sex couples similar tax treatment and legal rights as a married couple. France introduced PACS ten years ago to specifically give homosexual couples some measure of legal and taxation protection, but now around 90% (135,000 out of 150,000 PACS per year) are being entered into by heterosexual couples.
Benefits and rights of a CP cover tax, state pension and ‘next of kin’ status, and in the UK, a CP is seen virtually as same-sex marriage, whilst in France it is not accorded that status – it is simply seen as a contract between two individuals, although the rules governing the duties and obligations of husband and wife such as communal life, reciprocal assistance, material aid are applicable to PACS partners, tax and legal rights are not the same as for married couples.
As a result of the difference between the way the two regimes are seen by the different countries (which is why UK CP was not recognised in France – it is much closer to a marriage than a PACS), it is much easier to dissolve a PACS than a UK CP. A PACS can be dissolved simply if one partner marries someone else, or if the contract between the parties is terminated (including unilaterally, by letter from one partner), whereas dissolution of a UK CP is more akin to a divorce – it cannot be dissolved until at least one year after the CP was registered, and like divorce, dissolution has to done through the courts. Grounds for obtaining a dissolution are similar to divorce i.e. unreasonable behaviour, a consented two year separation, five year separation or desertion for a minimum of two years, although unlike UK marriage, adultery is not grounds for dissolution.
Registering a CP is relatively straightforward, and based on the UK civil marriage ceremony: fifteen days notice has to be given and involves a short ceremony. Registering a PACS is also straightforward and is done by drawing up a contract, detailing division of possessions between you before the local tribunal d’instance. One of the partners must be a French national or living in France as a resident. As with most things in France, bureaucracy is rife, and various documents are required, including a certificat de coutume (British nationals can obtain this from the British Embassy in France), which states that there is no legal impediment to you entering into a PACS in France, i.e. that you are single. Because of this requirement, anyone in a UK CP was not be able to obtain a certificat de coutume, and so could not enter into a French PACS.
Most couples living in France who have a UK CP do not want to dissolve it. However, if it was not dissolved so that the partners could enter into a PACS, they would find themselves in a vulnerable situation as far as French succession tax is concerned. French succession tax is a tax on inheritances and lifetime gifts. Assets passing on death between PACS partners are (like those passing between married couples) exempt from succession tax, whereas an exemption of €76,988 (renewable every 6 years) applies to lifetime gifts, with tax on the balance increasing progressively from 5% to 40%. For those not related by marriage, PACS or blood, succession tax is due at a flat rate of 60% on all inheritances or gifts, with a tax-free allowance of only €1,642 (in 2009).
In the UK, those in a CP are afforded the same inheritance tax rights as a married couple, so assets passing on death or by gift are exempt, except where the deceased partner is UK domiciled but the recipient spouse is non-UK domiciled, in which case, a one-off exemption of only £55,000 is available, although for UK nationals who die as residents of France, this rule is superseded by the UK/France Double Tax Treaty on death taxes.
PACS partners are also at risk as far as French succession law is concerned, and their succession rights are considerably less than those of a spouse (although all children of the deceased are entitled to equal shares in the portion of the estate reserved for them). PACS partners must therefore consider the impact of French succession law on their deaths, and take advice as to how to structure ownership of assets and prepare a Will to ensure that those they wish to benefit actually do.
Like married couples, PACS partners complete joint tax returns, which are generally tax advantageous because they are taxed on the total income of the household as a couple, so both sets of nil rate and lower rate tax bands are fully utilised in France. Where a marriage or PACS is entered into during the French tax year (the calendar year), three tax returns must be completed; one for each of the couple for the period of the tax year falling before the marriage, and one joint household return for the portion of the French tax year falling after the PACS.
Whether or not you have entered into a UK CP or a French PACS you need to take advice from a firm that understand the issues in both France and the UK, particularly if you are unmarried, whether in a same- or opposite-sex relationship.