Joint property ownership options in France

Barbara Heslop of Heslop & Platt answers a reader query.

Question

We are a married British couple with two adult sons. We are currently renting in France but plan to buy a house this year. What are our options for joint (couple) property ownership?

Answer

Well done for asking this! Often people focus on a move and forget this important decision. You have a number of options…

There is currently no inheritance tax payable in France on assets passing on death between a married couple. However, future French inheritance tax consequences for your sons may be a factor, especially if the value of the property and other assets exceed €200,000.

The default form of joint ownership of property in France is ownership en indivision which equates to ownership as “tenants in common” under English law.

With this, your sons will be entitled to inherit a minimum of a third each of their deceased parent’s half of the property at the time of the first death, so become joint owners with their surviving parent. You could also consider adopting a French community marriage regime, or instruct the notaire to include a tontine provision in the sale and purchase deed.

Both steps will ensure that on the death of the first spouse, full ownership of the property passes to the survivor. In both cases, your sons’ entitlement to inherit a share of the property is postponed until the death of the surviving parent.

They would each lose their €100,000 tax allowance on the death of the first of their parents as at that stage they would not inherit. They would get this allowance (although only once as only inheriting from one parent) on the subsequent death.

You could also use the EU succession regulation so as to make a will electing UK law to apply to your whole estate and stating that you wish the surviving spouse to inherit in the first instance and on the subsequent death of the survivor of you, for your sons to inherit in equal shares. Specialist advice is recommended.

This article was first published in response to a reader query in The Connexion – March 2020.