What Changes Will British People Notice in French Law in 2022?

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What Changes Will British People Notice in French Law in 2022?

 

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.

Brexit has now happened, and a year has passed since the free movement of people, goods and services between the UK and EU came to an end. What has this meant from a legal point of view for British citizens either living or owning property in France?

Owning Property in France

As non-EU citizens, it is still possible for British people to buy and own real estate in France. As in the pre-2021 days, it is possible to rent the property out or stay in it yourself.

The main difference for British people is that we need to be aware of the 90-day rule. If staying in the EU (more specifically the Schengen area countries) for less than 90 days in any 180-day period, then there is currently no need for a visa.

If, however, you intend to stay at your French property for more than 90 days (or you are going to be in the EU for more than 90 days in a 180-day period), you will likely need to apply for a visa.

For those who don’t live in France and wish to sell their property in France, it is now generally necessary to instruct a French Fiscal Representative to ensure that you are paying the correct taxes in France on the sale. The cost of this is not regulated but can be up to 1% of the sale price.

Wills

Under the EU Succession Regulation, you are still able to make a will electing for ‘British law’ to apply to your property in France.

It is important, however, to note that due to changes to Article 913 of the French Civil Code, which came into force in November 2021, the effectiveness of an election for British law may now be limited in some circumstances.

If you live in the EU or are a citizen of an EU country, or if any of your children are EU residents or nationals, the French forced heirship rules can be enforced over your assets in France if your children wish.

Broadly speaking, the French forced heirship rules mean that if you have children, on your death, you must leave a proportion of your assets to them. You cannot leave all your assets to your spouse or disinherit a child. If the changes to Article 913 apply to your circumstances, if your children wish for French forced heirship rules to apply, they can overrule the election in your will for British law to apply.

If you haven’t already reviewed your wills in light of the new changes, it would be sensible to discuss the changes with your solicitor. Your wills may no longer work as they were designed to.

Taxes

Inheritance tax, income tax and capital gains tax are all dealt with under British/French double taxation agreements (as opposed to EU taxation agreements), so, for the most part, they remain unchanged.

However, there are changes to the social charges on selling a property. When the UK was a member of the EU, it was possible to take advantage of an EU rule which meant that British resident individuals could pay a lower rate of social charge. This is no longer available, and the full rate is now payable.

For more information, please contact Charlotte Macdonald, Dan Harris, Raquel Ugalde or Emma Seaton at Stone King LLP by calling +44(0)1225 337599 or by emailing: [email protected].

Article written by Charlotte Macdonald and trainee solicitor Bryony Anning.

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Comments

  • Lethesia Mcskimming
    2022-09-20 04:06:15
    Lethesia Mcskimming
    We have a Scottish will disinheriting our children. We live and own a house in France. Is disinheritance still possible with the inheritance change?

    REPLY

    •  Charlotte Macodnald
      2022-09-28 11:53:49
      Charlotte Macodnald
      Hello Lethesia I'm qualified in English and Welsh law, rather than Scots law. The succession laws in Scotland are different than those in England and Wales so I cannot comment on whether you can disinherit your children under Scots law - although I assume you have already taken advice on this as you have Scots wills in place. The changes to Art 913 are clear that they apply if you are an EU national or resident at the time of your death, or your children are EU resident or nationals at the time of your death. So if both you and your children are British citizens only, living in Scotland at the time of your death then the changes to Art 913 are unlikely to apply to you. Please note that the above comments are general points only, rather than official legal advice on which you can rely. If you would like in depth advice please contact my team: [email protected]

      REPLY

  •  Charlotte Macdonald
    2022-07-08 08:17:34
    Charlotte Macdonald
    Hello Celia I'm afraid that I'm am not able to comment on the validity of a will, without first having reviewed it, and knowing more about your circumstances. If you would like us to do this for you, please email my team directly at [email protected] and we can provide you with a quote.

    REPLY

  •  Celia Ramscar
    2022-07-01 01:58:34
    Celia Ramscar
    Hi. Just been reading regarding Wills in France. We are British Citizens. Who are residents in Spain and have a holiday home in France. We have made Wills in both countries abiding by the country of our birth United Kingdom. The Wills where made before Brexit .My Question is In France law does my Original Will still stand. ( I have 2 English children my husband non.) Regards. Celia.

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