Does my English Will cover my assets in France?

French and English succession laws differ, with French law requiring testators to leave a percentage of their estate to their children under "forced heirship". In contrast, English law allows testamentary freedom meaning a testator can leave their estate to whoever they wish. This can cause problems where a testator owns property in both France and England or for people who have moved to live in France.

It may therefore be necessary to have more than one will to cover assets owned in both the England and France.

It is common for married couples to leave everything to each other in their wills, and then down to their children once the survivor of the two dies. In English law this is easily achievable by preparing simple mirror wills. Under French law, the general rule is that you cannot leave everything to your spouse in the first instance. Under the forced heirship rules, you must leave at least 50% of your estate to you children and this percentage increases depending on how many children you have. This can cause financial difficulties for the surviving spouse and may also mean your estate is not divided in the way you wish. There are also different rules and inheritance tax rates for stepchildren who are not recognised as heirs under French law.

It may be possible to elect to have English law apply to your Will in France under EU legislation (Regulation Number 650/2021) to avoid the forced heirship rules, although this may increase the amount of inheritance tax you pay in France. EU Regulation Number 650/2012 applies to all EU member states although, even prior to Brexit, the UK opted not to sign up to this regulation. The regulation provides that where individuals hold assets in an EU member state, the succession of those assets following death will be governed by the law of the country where the individual was habitually resident. The individual can choose to make an election under this regulation in their will to apply the law of their nationality to their assets, wherever the assets may be situated in the EU.

Another common form of will in English Law, is a will which incorporates a nil rate band discretionary trust and this can cause difficulties in France. Whilst discretionary trusts are recognised in France, they are not taxed favourably. Where it is not clear who the beneficiaries of a discretionary trust are, an inheritance tax charge of 60% applies. If the beneficiaries of a discretionary trust can be identified, then a 45% inheritance tax charge applies.

It is important to receive legal advice if you own assets in both in England and France as the laws of both countries will need to be considered in order to ensure your assets pass to the people you want them to in the most tax-efficient way.

Please contact a member of our Private Client team if you would like to discuss any of the issues raised in this article or have questions about your existing will or how your estate will be distributed.