When a person dies, their assets pass to their heirs. Any transfer of property is subject to an indirect tax in the form of inheritance tax to be paid to the State . This system was put in place during the French Revolution for the sake of equality and to make the citizens with the best wealth contribute to the finances of the State, in proportion to the value of the latter.
On the death of a person, an inventory of their assets must be made to define the share of the estate which belongs to each heir and/or legatee indicated by the deceased in his will. The heritage taken into account for the calculation of inheritance tax is made up of buildings, furniture, bank and savings accounts or even securities portfolios, which belonged to the deceased.
The value of these assets is estimated at the price at which they could have been sold on the date of death. The transmission of these assets must be declared to the tax authorities because it is subject to tax in the form of inheritance tax . An heir or legatee may, however, refuse a succession and therefore not be subject to the inheritance rights arising therefrom.
It is not mandatory to go through a notary to manage inheritance rights, but, especially if the assets of the deceased were important or if their marital situation was special, it is still advisable to contact a professional. The notary calculates his fees in proportion to the value of the property transmitted after death.
The heirs, and the persons mentioned in the will of a deceased person, are subject to inheritance tax. Only the spouse of the deceased, the surviving partner in the event of Pacs and, under certain conditions, the brothers and sisters who lived under his roof do not have to pay these rights.
Upon the death of a person, a declaration of inheritance must be sent to the tax authorities, within 6 months if the death took place in metropolitan France, 12 months in the event of death abroad. This declaration is not necessary for the direct heirs (fathers, mothers, grandparents, children, grandchildren) and the surviving partner if the gross amount of the deceased's property is less than 50,000 euros and he there were no donations before the death.
The amount of inheritance tax is defined according to the value of the estate of the deceased and the relationship or lineage of his heirs. To calculate the amount of inheritance tax, it is first necessary to determine what is called "net taxable assets", i.e. the total value of the deceased's assets from which are deducted his outstanding debts.
Then, the share of the estate of each heir is defined according to a ranking in order of priority designated by law or by the wishes of the deceased in his will if applicable, and any donations made before death. Each part calculated in this way may benefit from any allowances with regard to the tax authorities. An allowance of 100,000 euros is applied for an inheritance between parents and children, for example. A disabled person also benefits from a special allowance of 159,325 euros. Accordingly, the share of each heir may be different.
In the end, the amount of inheritance tax is calculated in installments according to the value of the assets taken into account in the succession. The applicable percentages for direct heirs range from 5% inheritance tax to be paid if the estate does not exceed 8,072 euros, to 45% for assets exceeding 1,805,677 euros.
Reductions in inheritance tax are then granted depending on the number of dependent children of the heir or if the latter is disabled in the war. Inheritance duties must be paid at the time of filing the declaration of inheritance, but payment terms may be offered in a split or deferred manner.
