3.2. Obligation to Make a Declaration

1. 3.2.1. Is a Declaration Always Necessary?
2. 3.2.2. Executors
3. 3.2.3. Declaration Procedure

3.2.1. Is a Declaration Always Necesarary?

No declaration is necessary if the assets of the deceased are less than €50,000.

This exemption is reduced to €3000 where the next of kin are other than the surviving spouse, children, or parents of the deceased.

These thresholds apply before the deduction of any debts outstanding against the estate, but after deducting any gifts made during their lifetime, provided they were declared the tax authority (or notaire) at the time they were made.

Nevertheless, even if you have adopted such a marriage regime, you would still be well advised to discuss your circumstances with your notaire, in order to verify that there is nothing in your case that warrants a declaration e.g. life insurance policy beyond exemption threshold, assets held outside of the marriage regime.

You may also want to make a declaration in these circumstances if you seek a nil return from the tax authorities, which can be used in management of the estate.

You should note, however, that, in these circumstances, if the property was the principal home of the deceased, it benefits from a 20% abattement against liability to inheritance tax. This reduced value is the one that is then used as the base line to assess liability to capital gains tax if the property is then sold.

You also need to be aware that:

• The local mairie is required to inform the tax authority of the death (together with information on known next of kin);
• French banks are required to inform the tax authority of bank accounts (including share accounts) held by the deceased, and;
• French insurance companies are also obliged to declare the existence of life insurance policies and precious objects insured by them.

The tax authority have up to 10 years following the tax declaration to contest the information supplied to them, notably if assets have been ommitted from the declaration.

3.2.2. Executors

France has no tradition of ‘executors’ of an estate in France, in the same way as occurs, for instance, in the UK.

As a general rule, the next of kin are collectively responsible for making the declaration and managing the inheritance process.

However, depending on the circumstances, three other options are available.

i. Exécuteur Testamentaire

First, it is possible for someone making a will to appoint an exécuteur testamentaire, although their role in the winding up of the estate is limited.

Recent legislation has increased the role and powers of this representative, notably in the absence of protected heirs, e.g. no surviving spouse or children.

So, if you have no immediate next of kin who will inherit your estate, the use of an exécuteur testamentaire might be an option worth considering.

ii. Mandataire Posthume

Second, in certain circumstances it is possible for you to nominate someone to manage the inheritance, a decision that you can make as part of the inheritance planning process. So, it is a decision made prior to death to the future benefit of inheritors and the estate.

The person(s) so nominated is called a mandataire posthume.

They may be one of the inheritors, a legal representative or notaire, or whomever you so choose.

The procedure is generally to be used in the presence of minors, handicapped persons or those otherwise unable to manage the process. It is not universally available, other than for a reason that is ‘serious and legitimate’.

iii. Mandataire Successoral

Thirdly, post-death, it is also possible for the inheritors to nominate one amongst them to manage the whole process.

The person is called un mandataire successoral.

If you think any of these options might apply to your circumstances you should discuss them with your notaire.

3.2.3. Declaration Procedure

Either the next of kin, legal guardian or mandataire are obliged to make a declaration to the tax authorities, and to discharge any taxation liabilities on behalf of the inheritors.

Where there is more than one inheritor a single declaration on behalf of all inheritors is suffice.

The relevant declaration forms are available from the local tax office (Centre d’impôts).

Indeed, where the deceased owned real estate, the involvement of the notaire is obligatory.

The fees of the notaire are unlikely to be a trifling matter, normally running into several thousand euros. The fees will be higher for those with a French marriage contract communauté universelle simply because they are calculated on a percentage of all of the property owned by the couple.

It is imperative that the next of kin make a declaration within six months (twelve months where the deceased lived outside of mainland France) of the death failing which financial penalties will be incurred.

In the case of those who were resident in France, then the declaration should be made to local tax office.

In the case of non-residents with property in France the declaration should be made to Centre des impôts des Non-Résidents (CINR), the CINR transfers to 10, rue du centre, Noisy-le-Grand (93).

Their e mail address is cinr.paris@dgi.finances.gouv.