Charlotte Macdonald is a consultant associate solicitor in Stone King’s international and cross-border team.
Charlotte answers legal and practical questions that are often asked by her clients in relation to France; whether that be buying or selling property in France, inheritance law, or how inheritance and capital gains tax are treated between the UK and France.
In England and Wales, there is, broadly speaking, complete testamentary freedom. This means that, save for any legal challenges made against your will or property you own jointly, you are free to leave your assets to whomever you wish.
France does not practice testamentary freedom. In France, there are rules in place which determine how you can leave your assets. This is to prevent family members, in particular children, from being disinherited. These rules are known colloquially as ‘forced heirship’, and these rules can take precedence over a will.
What are the French forced heirship rules?
If you have made a will and you have children, you must* leave your assets as follows –
|Number of children||Share reserved for children||Freely disposable under your will|
If you are married but have no children, your surviving spouse is a protected heir and is entitled to 1/4 of your estate. You are free to leave the remaining 3/4 as you wish.
*Please note that there are some ways in which forced heirship can be bypassed, such as tontine clauses, but these are beyond the scope of this article.
An example of forced heirship in France
Kevin dies, leaving an estate worth £1,000,000. He is survived by his wife, Amelia, and their three children.
If English law applies, Kevin is free to leave his assets to whomever he wishes. Like many people in the UK, he wishes to leave all of his assets to his wife, Amelia. On Amelia’s death, she has a will that leaves their estate to their children.
If French law applies, Kevin is bound by the forced heirship rules – his three children will receive 3/4 of his estate in equal shares. Kevin is only able to leave 1/4 of his estate to his wife. This means that Amelia may not have the resources to look after herself.
Is it possible to avoid forced heirship rules?
Yes – in some circumstances, it is possible to bypass the French forced heirship rules under the European Succession Regulation (650/2012):
Article 22(1) of the Succession Regulation states –
‘A person may choose as the law to govern his succession as a whole the law of the State whose nationality he possesses at the time of making the choice or at the time of death.’
This means that a British national can elect for the law of their nationality to apply to the succession of their estate in any Succession Regulation country, thereby bypassing local forced heirship rules. The Succession Regulation currently applies in all EU member states, except for Denmark and Ireland.
This is particularly useful for British owners of French property, who want English succession law to apply when they die, rather than French succession law.
An example of the EU Succession Regulation
Claire is a British national who is living in France. She owns her home and has a small bank account in France. She is estranged from her three daughters and does not wish to include them in her will. She would like to leave her entire estate to a French dog charity.
- The default position – French forced heirship
Because Claire is habitually resident in France, French law automatically applies to the succession of her estate. Claire must leave three-quarters of her estate to her daughters and is free to leave the remaining quarter to her chosen dog charity.
- Election – English testamentary freedom
By virtue of her British nationality and applying Article 22(1) of the Succession Regulation, Claire can elect for British law (which in this case will be English law as this is the country within the UK that Claire is most closely associated with) to apply to the succession of her estate. Claire can bypass the French forced heirship rules and can leave her entire estate to her chosen French dog charity.
Will Brexit affect the application of the Succession Regulation?
No – the UK did not opt into the Succession Regulation, and so pre-Brexit, the UK was already treated as a state outside the EU for this particular piece of legislation. The Succession Regulation allows nationals of non-EU countries to elect for the succession laws of their nationality to apply to the succession of their property in an EU country.
For example, a New Zealand national living in France is able to elect for the laws of New Zealand to apply to the succession of their worldwide estate – including their assets located in France, bypassing French forced heirship.
Beware of the risks…
The Succession Regulation does not give you the ability to choose which country’s inheritance tax regime applies. In fact, you may inadvertently increase your liability to inheritance tax when making an election for English law to apply to your estate.
It is also important to note that if you opt for English law to apply to the succession of your estate, you may be opening yourself up to the possibility of an Inheritance (Provision for Family and Dependents) Act 1975 claim. These are claims made against your estate after your death by someone who was being maintained you, but who was not included your will. Claimants can often include spouses, former spouses, cohabitees, or children.
It is advisable to obtain professional advice if you own assets and/or are resident in France, to help you decide if making an election for English law to apply to the succession of your estate is the correct course of action for you.
This article was written by Charlotte Macdonald, and trainee solicitor Bryony Anning.
For more information please contact the international and cross-border team at Stone King LLP –Charlotte Macdonald, Dan Harris, Raquel Ugalde and Emma Seaton, either by calling +44(0)1225 337599 or by emailing [email protected].
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