THE French inheritance tax system will now treat same-sex couples who are in a civil partnership from outside France on an equal footing.
Amendments have been passed that mean should one partner die, the other does not face a tax bill of 60 per cent, bringing France in line with the UK who already recognise the French equivalent of its own civil partnership, the pacte civil de solidarité (PACS).
Here lawyer Guillaume Barlet, of Bank House Investment Management Limited, offers some thoughts on the recent changes.
The simplification and clarification of the Law and reduction of procedures Act (Loi de simplification et de clarification du droit et d’allègement des procédures) has been adopted allowing the addition of an article 515-7-1 to the Code civil making provision that:
“The conditions of formation and effects of a registered civil partnership, along with the causes and effects of its dissolution are subject to the material dispositions of the country of the authority which carried out its registration.”
The report from the discussion of this amendment specifies the scope of its application.
In effect, it seems that although a non-French civil partnership can now be recognised in France (provided that its effects are not contrary to French law & order), article 515-7-1 excludes rules relating to succession (i.e. inheritance), financial settlements (relating to alimony, maintenance or spousal support) and adoption.
Therefore, the latter topics are still governed by the rules of international law between France and the country of registration of the civil partnership.
As far as inheritance is concerned, British civil partners and French civil partners can both benefit from the inheritance tax exemption also applied to married couples.
This means that when British civil partners reside in France, this exemption would now be applied upon the death of one partner on transfer of the estate to the other instead of the current 60% applied above an allowance of €1,564.
However, where French residents registered under a British civil partnership have made a UK will, the effects of such estate planning could be limited by French inheritance rules despite the provisions in the will.
In effect, under French rules, the surviving partner is not considered as an heir and this could reduce his/her rights to the estate if the deceased partner has heirs.
Generally speaking, the British civil partnership is still different to the French one and it is important to check with a lawyer that you are not affected by this discrepancy.
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