Cross-border succession in France : a civil and tax challenge

France applies strict rules on inheritance for real estate and movable assets located in its territory, even when the deceased and the heirs live abroad. Non-resident investors and international families owning property in France are often unaware that they may be subject to French inheritance tax (droits de succession), which can reach up to 45%.

Under French tax law, the location of the asset—not the residence of the heir or the deceased—determines taxation. If a property is located in France, it falls within the scope of French inheritance rules. This principle applies to both real estate and financial assets, unless an applicable tax treaty provides otherwise.

France does not levy inheritance tax on worldwide assets of non-residents, but the French-situs assets (e.g. apartments, houses, shares in French real estate companies) remain taxable. Foreign heirs, even those with no ties to France, are thus exposed to French succession duties.

How French inheritance tax is calculated for non-residents

The French inheritance tax regime is based on the relationship between the deceased and the heir, with progressive tax rates ranging from 5% to 60%. Children and spouses benefit from favorable treatment, while distant relatives or unrelated heirs face much higher rates.

In 2025, direct descendants (children, grandchildren) benefit from a €100,000 exemption per parent. For example, if a father domiciled in Dubai owns a €1.5M apartment in Paris and passes it to his son, the taxable base will be €1.4M, after applying the exemption.

The progressive tax brackets then apply as follows:

• 5% for the first €8,072,

• 10% up to €12,109,

• 20% up to €15,932,

• and so on, reaching 45% above €1.8M.

No flat-rate treatment applies. Non-residents are taxed like French residents on French-based assets, with the same thresholds and rates.

How to reduce French inheritance tax exposure

France offers specific relief mechanisms that can help reduce the burden of inheritance tax. These tools are especially useful for families who anticipate a future transfer of real estate or business assets.

Among the most powerful options is the “Dutreil Pact” (Pacte Dutreil), applicable to family-owned businesses, including French holding companies that actively manage subsidiaries. When properly structured, this regime allows for a 75% reduction of the taxable base for inheritance and gift tax purposes.

Another effective strategy is to organize gifts of bare ownership (nue-propriété) during the lifetime of the owner, retaining the usufruct (usufruit) to continue receiving income. This allows the gradual transfer of wealth, limits the taxable value, and benefits from progressive renewal of allowances every 15 years.

Life insurance contracts (“assurance-vie”) subscribed under French law, with proper structuring and nomination of beneficiaries, may also fall outside the scope of inheritance tax, up to certain limits. However, non-residents must seek careful legal advice, as cross-border implications vary depending on the country of residence and applicable treaties.

Estate planning for international families : why it matters

For high-net-worth individuals based in the UK, Switzerland, the UAE or the US who own real estate or businesses in France, proper estate planning is critical. French tax authorities scrutinize cross-border transfers and disregard purely artificial arrangements.

Non-residents should seek advice well in advance to structure their assets efficiently, combining civil law strategies (such as wills or donations) and tax tools (holding companies, insurance, Dutreil pact, etc.).

Each family situation is unique. The interplay between the civil law applicable to the succession (which may be that of the country of the deceased) and the French tax law (which applies to French assets) requires precise coordination.

Conclusion: anticipate and secure your cross-border succession

If you are a non-resident and own real estate or business assets in France, you are likely exposed to French inheritance tax, regardless of your nationality or where you live. Without proper structuring, your heirs could face a significant tax burden, sometimes forcing the sale of assets to meet tax liabilities.

At Qualifisc, we help international families and non-resident business owners navigate the French inheritance tax system and implement efficient, legal and personalized solutions. We combine legal precision with practical experience in French–international cross-border planning.

Contact us today for a confidential review of your situation.