France imposes forced heirship, so you cannot freely divide your estate as you wish. You can now use Brussels IV to opt for UK law to apply instead, but this may have unexpected consequences.
Forced heirship
Succession law in France is based on the Napoleonic Code introduced in the 1800s. It means that a specified minimum proportion of your assets (worldwide moveable assets and French real estate) must pass to your children as follows (spouses are not protected heirs if you have children):
One child – 50%
Two children – 66%
Three or more – 75%
You cannot use your will to circumvent this, but you can leave the balance of your estate to whomever you wish in your will.
Brussels IV
EU Regulation 650/2012, known as the Certificate of Succession or ‘Brussels IV’ came into effect in August 2015. Under this, the default position is that the succession law of the country where the deceased is habitually resident will apply to all assets (including real estate in other EU countries).
However, any foreigners living in an EU country can elect to apply the law of their country of nationality instead. This applies to all nationalities, not just EU nationals, so remains unaffected by Brexit. You have to state this in your will or similar document; your family cannot just choose to use UK law when sorting out your estate.
Brussels IV was a significant change for British expatriates in France who do not agree with forced heirship. But beware, there are issues clients need to be aware of before rushing to choose UK law.
First of all, Brussels IV does not allow clients to choose UK inheritance tax over French succession tax. If you are hoping to avoid the 35%-45% tax for siblings, or 60% tax for your spouse’s children or other non-relatives, it does not help in any way.
The French taxman, in fact, could be the biggest beneficiary of Brussels IV, as the more people who use it to leave assets to distant or non-relatives, the more tax he will collect.
Opting for UK succession law could have the unexpected consequence of making clients liable for UK inheritance tax on worldwide assets as well as French succession tax (with any appropriate offset).
Normally, UK domiciles living abroad remain liable for UK inheritance tax. This does not apply in France, as under the UK/France double tax treaty, if you are a permanent resident of France you are liable for French succession tax on your worldwide assets and UK inheritance tax only on UK assets.
