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International succession is a thorny issue. Many questions are raised concerning the settlement of international succession and the necessary procedures. What is the applicable law? The law of the country of which the deceased was a national? The law of the country where the deceased’s assets are located? The law of the country where the heirs reside?

International inheritance seems an almost impossible procedure. The settlement of international successions raises a few practical difficulties.

This is particularly true when it comes to determining the law applicable to international succession. The same applies to the taxation of assets arising from international successions. As such, mastery of these rules is of major interest when it comes to managing taxpayers’ assets.

Private international law was profoundly reshaped by the entry into force, on August 17, 2015, of European Regulation (EU) No. 650/2012 of July 4, 2012 on jurisdiction, applicable law, recognition and enforcement of decisions and acceptance and enforcement of authentic instruments in matters of succession and the creation of a European Certificate of Succession, known as the Succession Regulation.

In terms of conflict of laws, the European regulation has revolutionized practice in at least two respects:

• On the one hand, it provides for the application of a single law to the entire succession, whereas domestic rules were based on the principle of splitting the connection between movable and immovable property;
• Secondly, it opens up the possibility of choosing the law of succession in favor of the law of the nationality of the deceased, whereas French law prohibited any autonomy of will in this respect. These changes give a new dimension to the practitioner’s duty to advise.

The conflict-of-laws rules resulting from the European regulation are universal in nature, and have replaced domestic conflict-of-laws rules where the regulation is applicable. However, the latter continue to govern successions opened before August 17, 2015.

On the other hand, the taxpayer must check whether the estate is considered to be international, in other words, whether from his point of view it presents at least one foreign element such as, in particular :

• foreign nationality of the deceased ;
• habitual residence abroad ;
• the presence of assets abroad ;

The European regulation has retained the principle of a unitary connection of the succession, the law applicable to the succession being that of the State of the place of habitual residence of the deceased, unless a choice is made in favor of the law of the nationality.

The practitioner should refer to article 21 of the aforementioned regulation, which lays down the following general rule:
“1 Unless otherwise provided in this Regulation, the law applicable to a succession as a whole shall be the law of the State in which the deceased had his habitual residence at the time of his death

2. Where, by way of exception, it is clear from all the circumstances of the case that, at the time of his death, the deceased was manifestly more closely connected with a State other than that whose law would be applicable by virtue of paragraph 1, the law applicable to the succession shall be that of that other State”.

In a decision dated September 21, 2022, published in the official journal of FRANCE (“bulletin”) (no. 19-15.438), the French Supreme court (“Cour de cassation”), on its First Civil Chamber reunited, validated this position, stating that:

“The law must be interpreted as meaning that a court of a Member State must declare of its own motion that it has jurisdiction under the subsidiary jurisdiction rule provided for in that provision. […] Consequently, a court of appeal which declares that the French court lacks jurisdiction to rule on the succession and appoint a succession agent, on the grounds that the deceased’s habitual residence was located in the United Kingdom, without raising of its own motion its subsidiary jurisdiction, is in breach of this text, even though it was clear from its findings that the deceased had French nationality and owned property located in France”.

Declaration of international succession in FRANCE

The declaration of international succession must be made using the appropriate forms. It must be filed within a specific timeframe.

The declaration of international succession must be filed :

• within 6 months of the date of death if the death occurs in France ;
• within 12 months in all other cases. There are, however, certain exceptions. This applies in particular to the deaths of residents of Mayotte and Réunion. For residents of these countries, the time limit may be extended to two years, depending on the place of death.

However, it is not necessary to file a declaration of inheritance if the gross estate assets are less than :

• €50,000 for transmission to direct line heirs, the surviving spouse and the partner bound to the deceased by a civil solidarity pact (PACS), provided that these persons have not previously benefited from an unregistered or undeclared manual gift from the deceased;
• €3,000 for other heirs.

The declaration of inheritance of a person who dies in a foreign country must be filed by the heirs within 12 months of the date of death with the Tax Receipt for Non-Residents. Inheritance tax must be paid at the same time. When the deceased and/or his heirs reside abroad, it is necessary to ascertain the existence and provisions of a bilateral international convention signed between France and the foreign country.

Below is a table showing the rates of inheritance tax on the net taxable portion after deduction of allowances:

• Between spouses or partners :

• In direct line :

• Between sisters and brothers, living or represented

Nieces and nephews representing their deceased or relinquishing sibling benefit from the rate applicable between brothers and sisters for estates opened on or after January 1, 2007.

Where should an estate declaration be made in FRANCE?

In the case of an international estate, a declaration of inheritance must be made in FRANCE. The declaration of inheritance of a person domiciled outside France must be made to the tax authorities. The declaration and payment must be made to the non-resident department of the General Directorate of Public Finances (“Direction Générale des Finances Publiques”).

Taxation of an international estate

Determining the tax rules applicable to an international estate can raise a number of practical difficulties. In principle, the applicable tax regime is that of the country where the deceased is domiciled. It is therefore normally this state that will have the right to tax the assets owned by the deceased on the day of his death. However, certain specific features of international taxation apply. Real estate is taxed in the country where it is located. Thus, in principle, in the context of an international succession, FRANCE will retain the right to tax real estate located on its territory.

FRANCE will also have the right to tax heirs or legatees if they have been domiciled in France for tax purposes for at least 6 of the last 10 years prior to the transfer. However, there may be several situations where the deceased’s assets are taxed in two countries, leading to a situation of double taxation. In such cases, FRANCE allows the tax paid abroad to be offset against the tax payable.

Specific rules for property in an international estate

Two situations need to be distinguished. The applicable rules differ according to whether the deceased was domiciled for tax purposes in FRANCE or outside FRANCE.

The deceased was domiciled in France for tax purposes :

All inherited movable and immovable property, whether located in FRANCE or abroad, is taxable in FRANCE. This principle therefore applies regardless of where the deceased was domiciled at the time of inheritance.

The deceased was domiciled for tax purposes outside FRANCE :

If the heir is not domiciled for tax purposes in FRANCE at the time of the succession or has not been domiciled in FRANCE for at least six years during the ten years preceding the succession, he must pay inheritance tax on movable and immovable property inherited in FRANCE. This applies whether he/she owns them directly or indirectly. This applies, for example, to French public funds, interest shares, trust assets or rights, French debts, and securities.

If the heir is domiciled in FRANCE for tax purposes at the time of the transfer and has been so for at least six of the ten years preceding the transfer, he will be liable for inheritance tax on the movable and immovable property he inherits, both inside and outside FRANCE. This applies, for example, to public funds, interest shares, fiduciary property or rights, debts and, in general, to all French or foreign securities.