Inheritance rights between France and Switzerland?
Inheritance rights between France and Switzerland?
I've owned an old alpine farm in France for many years. I live in Geneva, as do my children and my ex-husband. What are the inheritance taxes between France and Switzerland? Would it be advantageous to make a donation during my lifetime? Liane
As a general rule, the law applicable at the deceased's last place of residence governs succession in Switzerland or Europe. In this case, Swiss law would apply to your estate and your ex-husband would receive nothing, since divorced spouses cease to be each other's legal heirs, in accordance with article 120 of the Civil Code.
That said, the law applicable in tax matters is not necessarily identical to the law defining inheritance rules, and it should be noted that tax relations between France and Switzerland in matters relating to inheritance have become somewhat complicated since 2015, when France denounced the Franco-Swiss double taxation treaty on inheritance.
In Geneva, direct line inheritance is tax-exempt. However, cantonal or federal tax law does not apply to real estate situated abroad. Properties are taxed at their place of location on the basis of the value stated by the taxpayer in his or her tax return. The transfer of a property located in France to heirs will therefore be taxed according to French tax law.
In this respect, article 779 of the French General Tax Code provides that for the transfer of a property free of charge, a deduction of €100,000 is made from the share of each of the ascendants and from the share of each of the children living or represented as a result of predecease or renunciation. This rule therefore applies to both gifts and inheritances. It should be noted that donations made within a period of 15 years prior to death are included in the €100,000 lump sum, in accordance with article 784 of the said code.
So if, for example, you have two children and your Savoyard farm is worth no more than €200,000, you can pass it on to them tax-free, whether by inheritance or gift. If you opt for the second option, in 15 years' time you can pass on another hypothetical property in France to them as part of your inheritance, benefiting from the same tax exemption.
It's worth pointing out that inheritance law, and especially tax law, can be complex, so it's strongly recommended that you seek specialist advice to avoid any nasty surprises.
