International inheritances with cross-border elements are governed by specific rules that combine domestic legislation, international tax treaties, and extended reporting obligations. Taxation depends on the tax domicile of the deceased, the location of the assets, and the existence of bilateral agreements. France applies the effective rate rule to preserve the progressivity of the tax when a French resident inherits assets located abroad, while non-residents inheriting assets in France must provide mandatory tax certificates and guarantees for the Treasury.
TLDR
International inheritances in France are taxed based on the deceased’s tax domicile, the location of the assets, and bilateral agreements. French residents must declare all assets, even those exempt under treaties, while non-residents must submit a tax certificate to receive assets located in France. The effective rate rule applies to preserve the progressivity of the tax.
Scope and territoriality criteria
The taxation of international inheritances in France follows the territoriality principle: assets located in France are taxable regardless of the residence of the deceased or heirs, while assets abroad are only taxable if the deceased was a French tax resident at the time of death. This principle may be modified by international tax treaties, which determine which State has the right to tax specific assets.
Reporting obligations for heirs and legatees
Non-resident heirs, legatees, or donees in France must provide a tax certificate to receive sums, securities, or assets located in France. This certificate confirms either that no tax is due or that inheritance taxes have been paid. French residents inheriting from a non-resident deceased must declare all assets in the estate, including those located abroad and exempt under international treaties.
Asset valuation and tax calculation
Assets are valued according to specific criteria based on their nature and location. For French residents inheriting foreign assets, the tax is calculated using the effective rate rule, which applies the average rate to the total assets (including those exempt under treaties) but only to the portion taxable in France.
Exceptions and special regimes
Corsica benefits from a partial exemption for real estate located on its territory. The exemption is:
- Full for inheritances opened between 22 January 2002 and 31 December 2012,
- Partial for those opened between 1 January 2013 and 31 December 2037,
- None from 1 January 2038 onward.
Procedures and practical compliance
The inheritance tax return must be filed with the competent tax office, which also issues the required tax certificates. Details of securities or sums to be transferred to non-resident heirs must be indicated on the back of the tax certificate, the collection declaration, or a copy of the receipt.
Penalties and liability
Custodians, holders, or debtors who release sums or assets to non-resident heirs without the required tax certificate are personally liable for paying the inheritance tax. However, they may seek recourse against the original debtor.