The succession is deemed international if the heirs are not resident in France and/or the deceased’s assets are located abroad.
It is important to distinguish the law that governs the relations of heirs with the succession from the one that defines the tax situation, namely the taxes that the heirs are required to pay on the inheritance transmitted.
The determination of the heirs and their share in the succession
A European regulation that came into force in France on 17 August 2015 designates the law of the last country where the deceased lived to designate the relatives who will receive their inheritance.
A person who has assets in France but dies in Italy where they have been living for more than fifteen years. It is the Italian law that will apply to distinguish the heirs and their rights in the succession.
This rule is valid throughout the European Union except in the United Kingdom, Ireland and Denmark.
In principle, the state where the deceased is domiciled has the right to tax the assets that exist in their estate on the day of death.
However, France, like other countries, retains the right to tax assets located on its territory. To avoid double taxation, France has in certain cases provided for the possibility of offsetting the tax paid abroad against the tax due in France. Some countries have adopted this rule but not all.
A young woman living in France from a young age inherits from her mother who has been living in Portugal for ten years. She leaves her child an apartment and a current account domiciled in Lisbon.
There is no agreement signed between France and Portugal to avoid double taxation. In principle, the inheritance tax paid in Portugal should be deducted from that in France. Except that there are no more death duties in Portugal. As a result, assets located abroad will be taxed in France.
Whatever the situation, it is advisable to check whether an agreement has been signed between France and the expatriate’s country of residence. These agreements take precedence over the national law of the signatory states and define the rights of the states as to the taxes they can collect.
The declaration of succession of a deceased person abroad must be filed with the French authorities within twelve months of the death compared to only six months for a deceased person in mainland France.
Articles 750 ter and 784 of the French General Tax Code