After completion of your property purchase in France - some worries to consider...
We are at the time now when the pleasure of owning a second home in France starts to create some worries in the minds of owners. The proof is in the number of telephone calls enquiring about the inheritance position after completion of the purchase especially where second marriages are concerned. One cannot pretend to give solutions to all the problems but we can try and reassure owners.
The purchase "en indivision
" is the classical way to purchase in France. Please consult our new Guides section on Buying a property in France: En Division.
The French Notaires do not like the use of the "clause tontine" because of its fiscal consequences. They do not bear in mind that the English couples buying properties in France are almost always married without any "marriage contract". Couples would therefore usually prefer a fiscal consequence to a family crisis when one of the property owners dies. Please consult our new Guides section on Buying a property in France: Clause Tontine.
The "indivision" does not avoid the French inheritance law applied to the property on the death of one of its owners because French law applies to French property. The surviving spouse has to face the co-ownership of this property with the children of this marriage PLUS the children of any previous marriage. If there is no "convention d'indivision" one of the children can ask for the share of the proceeds which may mean that the property has to be sold.
Another embarrassing situation is when the surviving spouse is left with children under eighteen years old. In that case if the property was purchased "en indivision", the surviving spouse cannot sell the property without asking the French Court for permission to sell. The judgment then has to be enforced in England. It takes time and money and does not help to clarify the situation.
The main point to bear in mind is that French Inheritance Law is weighted in favour of the children. You will not be able to avoid this unless you create an SCI (Société Civile Immobilière).
Provided you remain resident in the U.K. the shares in the SCI are regarded as moveable estate and thus attach to the shareholder and the law of the country where the shareholder permanently lives.
Please consult our new Guides section on Buying a property in France: SCI.
You can then include in the rules of the SCI a statement as to what is to happen on a shareholder's death. The disadvantage is the cost of the creation of the SCI.
If you do not have children but brothers and sisters and possibly parents they have the right to the assets of the deceased. It is not possible to avoid their right to inherit a part except with an SCI for a non-resident. Otherwise in the end the relatives can expect something as a remembrance of you (even with the clause tontine that postpones the application of the French inheritance law only).
The Notaire in France does not always choose to advise on the inheritance position when you purchase. This is why it is so important to seek advice BEFORE completion. After the signature of the final deed it is too late. We will deal with Inheritance matters in later articles.
If you have not found what you are looking for please consult our new Guides section on Buying a property in France.
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