France's unique succession rules highlight the importance of considering how your overseas assets will be dealt with after you die. There are rules you should know about and steps you may want to take to mitigate potentially unintended consequences.
We are an increasingly mobile jet-setting population and France still remains a top choice for UK nationals seeking a move abroad.
While the administration "to-do list" that accompanies such a move may have grown even longer post-Brexit, one of the items that tends to fall to the bottom of the list is reviewing future succession planning if France is to become your forever home.
The EU Rules
The default position is that the country where you habitually reside will govern your estate when you die. For example, if you bought a property in France and spent at least nine months of every year there, your estate would be governed by French law, not UK law. This affects who receives your estate when you die, who administers your estate, how your estate is taxed, who could make claims on your estate, and which court decides any disputes regarding your estate.
But when the EU Succession Regulations (EU/650/2012) (also known as the Brussels IV) came into force, it affected those who died after 17 August 2015 with connections to more than one country. The UK did not opt in to Brussels IV at the time, but the rules still affected UK nationals living in or owning property in an EU member state, such as France, and this position did not change post-Brexit.
Effectively from 17 August 2015, the Brussels IV rules allowed someone to override the default position by making a choice of law. So, a UK national could choose that their (English and Welsh/ Scottish/ Irish) nationality would govern the succession to their estate, even if habitually residing in France or in such cases with any uncertainty about where their habitual residence actually was. Such a choice is best written into a will or codicil, although sometimes if your existing will was made in accordance with the law of your nationality, the choice of law is implied – and so the "choice" may be unintentional.
Vive la difference!
In 2021, a new French law came into place which affected the rules laid down by Brussels IV. Essentially, Article 24 of the French law added a paragraph to the previous rules that states that if the deceased, or at least one of their children, is a national of France then France's forced heirship rules still apply even if the chosen governing state, such as the UK, does not recognise this rule. Being a national of France can also simply mean that you habitually reside in France although your nationality remains British.
In France (and indeed in several other European countries) the forced heirship rules entitle children of the deceased to inherit between 50% and 75% of their parent's estate, depending on the family circumstances. This position can affect those with children who are simply wishing to leave their French property to a surviving spouse or partner.
So, while the choice of law still remains for UK nationals owning property in France under Brussels IV, you still need to be aware of the application of France's own laws.
Beyond matters of succession, there are also other aspects to be aware of, such as:
- a UK will appoints Executors but in France, as in many European jurisdictions, estates are administered by the beneficiaries and sometimes this can cause confusion simply on a practical level;
- UK wills can commonly contain trust provisions which are not widely recognised in France and which can have different taxation consequences; and
- a Brussels IV election does not necessarily dictate the tax position and you should always seek advice on the potential inheritance tax outcome for your French estate.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.