My father passed away in 2023 and my mother in 2024. I understand am to inherit around €250,000, though I have not yet received anything. I have a year to submit the inheritance form to the French tax authority, a deadline that runs out in August.
I am of Irish nationality, living in France 35 years. It has proven impossible to get any professional information (neither notaire nor tax authority) on how to proceed to declare this inheritance in France.
After doing some research myself, I have decided to submit two forms to the tax authorities, one for each parent. My best guess is that I will pay tax at 20 per cent on some of the inheritance from my mother.
If no procedure is undertaken within 12 months. I will receive a fine of 0.2 per cent each month plus additional payments etc.
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I plan to submit these forms and pay an approximate amount on an approximate inheritance not yet received to avoid a fine plus addition payments. Could you please give me any thoughts or advice concerning my intended procedure?
I know of course you do not replace professional advice, but I would just like your advice.
Ms A.D.
I am always wary of addressing issues of cross-border inheritance for two reasons.
First, the rules vary widely from country to country and in many cases can be quite complex, which is why, quite correctly, people are advised to seek legal advice.
However, as you say yourself, it can be quite difficult to find someone who is sufficiently across the issue of inheritances from abroad to feel confident to give such advice.
The whole area can also be complicated by your own residence status and that’s before you even consider the type and physical location of the inheritance and the impact of tax treaties between countries.
The second cause for my caution is that such queries inevitably elicit others, generally for different jurisdictions, and, as I say, I am far from comfortable in the expertise available to me to address them comprehensively.
In the case of France, as long as you have been living there for a set period – for at least six of the past 10 years in your case, presuming you are a French tax resident, which I assume you must be having lived there for the past 35 years, then you are liable to French inheritance tax.
A bit like in Ireland, there are certain tax-free exemptions though these are structured very differently. In the case of inheriting from parents, an able-bodied person (yes, another complication) is entitled to inherit up to €100,000 tax-free from each parent.
Then there is the applicable rate of tax and, unlike in Ireland, this varies depending on the amount of taxable inheritance and on the relationship between the deceased and the beneficiary.
Space precludes me from going through the whole thing, but in the case of “direct heirs”, such as a child inheriting from a parent, the figure varies from 5 per cent on sums up to €8,072 in steps up to 45 per cent on sums of more than €1,805,677.
So what does that mean for you? The initial €100,000 inheritance from your father is free of tax as it is covered by your tax-free exemption. In your mother’s case, assuming you do get €150,000 as you expect, the first €100,000 will be exempt and the balance of €50,000 will be subject to tax at 20 per cent as you suspect.
The 20 per cent rate covers inheritance taken by direct heirs of between €15,932 and €552,324.
Filing
The other issue for you, as you note, is the rigid obligation to file within a certain period. This requirement exists regardless of whether you are liable for tax or not. The deadline is six months from date of death, though this is extended to a year in cases, like yours, where the death occurred outside France.
As far as I can see, you will face a 10 per cent penalty on the amount owed after that – a figure that could rise to 40 per cent if you ignore any notification on the issue from the French tax authorities for more than 90 days.
On top of that, as you mention, there is interest on late payments at a rate of 0.2 per cent of the amount owing a month.
So the clock is certainly ticking in relation to you mother. With regard to your father, you are already well past the 12-month window and, as I understand it, will be subject to a fine of €150 for missing the filing deadline even though there was no tax due.
In terms of paying the inheritance tax bill, which in your case will be around €10,000, it is possible to spread that out over up to three payments within a year of the 12-month filing deadline. As you do not yet know the exact amount you will receive, this may provide you with the wriggle room you require.
Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2, or by email to dominic.coyle@irishtimes.com, with a contact phone number. This column is a reader service and is not intended to replace professional advice
