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No Tax, But Not No Obligation
A longstanding UK–France inheritance tax treaty ensures that estates inherited by French residents from UK-domiciled relatives are typically not subject to French inheritance tax — provided no French property is involved.
However, tax exemption does not imply exemption from declaration. This nuance is frequently overlooked, and misunderstanding it can lead to administrative complications for beneficiaries residing in France.
OECD: Inheritance Tax and Cross-Border Compliance
The Rule: Declaration Still Required
Under Article 800 of the French General Tax Code, any French resident inheriting assets — even from abroad; must file a déclaration de succession (inheritance declaration), not to be confused with an income declaration.
There is no carve-out in the law for foreign inheritances. However, a limited exception applies: if you inherit from a parent and the estate is worth less than €50,000, you are exempt from filing.
Importantly, this filing is an administrative formality — not a tax liability — when the UK estate has already been subject to UK inheritance tax and contains no French situs assets.
The Risk: Non-Compliance Penalties Are Minor — But Real
Failure to file the declaration is typically penalized as an administrative oversight, not a financial misdeed. A Paris-based tax lawyer familiar with international estates confirms:
“The fine for non-compliance is low. It’s not a percentage of the estate value — because no French tax is due — but it remains a formal obligation.”
Still, the requirement is enforceable, and French tax authorities have increased scrutiny on cross-border estates, especially following OECD transparency initiatives and FATCA-like information exchanges.
Compliance Timeline: One Year From Death
Beneficiaries residing in France must submit the inheritance declaration within 12 months of the decedent’s death. The filing should be sent to the French non-residents’ tax service (Service des impôts des non-résidents) — even if the beneficiary lives in France, because the estate itself originates from abroad.
Key Form: While Form 2706 is referenced in official literature, it is not currently available online. This gap reinforces the importance of consulting a notaire or cross-border tax specialist to ensure proper compliance.
Strategic Insight: The Bigger Picture for Cross-Border Heirs
This is not just a matter of ticking bureaucratic boxes. The declaration serves as a safeguard, preserving documentation in case of future audits, property purchases, or fiscal reviews.
For French residents with UK-born parents or relatives, now is the time to map out inheritance exposure — even if you are not yet a beneficiary. Advanced planning with a dual-qualified tax advisor can prevent friction down the line.
Underpriced Risk: Data-Sharing and Digital Enforcement
French tax authorities are increasingly plugged into cross-border financial data through agreements like the OECD’s Common Reporting Standard (CRS). If a UK bank reports the distribution of estate assets to a French resident, that data could trigger a compliance alert.
Failure to declare — even where no tax is due — might prompt a letter, an inquiry, or administrative penalties. These scenarios are costly in time and reputation, even when the amounts involved are non-taxable.
Final Word: No Tax Doesn’t Mean No Paperwork
This is a classic case of underestimated administrative exposure in global estate planning. The UK–France inheritance tax treaty eliminates duplication of tax, but not the duty to disclose.
For residents of France inheriting UK estates:
- Declare within 12 months, even if no tax is due.
- Engage a professional if the process feels opaque.
- Plan proactively; don’t wait for the paperwork to catch you by surprise.
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