Key Points: French Succession & Gift Tax for Non-Residents
If the donor or deceased was a French tax resident at the time of death or gift, all assets worldwide are subject to French duty (CGI Art. 750 ter, 1°). There is no exemption for assets located abroad.
If the donor or deceased was not a French resident, French duty still applies to all French-situs assets. It also reaches foreign assets if the heir or donee has been resident in France for at least 6 of the previous 10 years (CGI Art. 750 ter, 3°).
France has very few succession tax treaties. Where none exists, the internal double-taxation credit of CGI Art. 784 A applies: foreign tax paid on foreign assets is credited against the French duty, up to the amount of French tax on those assets.
French property held through a foreign company is not necessarily invisible to French succession tax. Shares in a non-resident company whose assets are predominantly French real estate are treated as French-situs assets. Indirect holding through a chain of companies triggers the same rules where the deceased held more than 50% of the shares.
“French-situs” assets include: French real estate (direct or indirect); French government bonds and securities issued by French entities; receivables owed by a French-domiciled debtor; and trademarks/patents exploited in France.
Tax is calculated at ordinary French succession/gift duty rates and abatements (€100,000 parent-child, €80,724 spouse/PACS partner), applying the taux effectif mechanism where a treaty limits French taxation to a subset of assets.

Three Scenarios: Who Owes What to France

French gift and succession duty (droits de mutation à titre gratuit) applies based on a combination of the donor’s/deceased’s residency, the location of the assets, and — since 1999 — the heir’s or donee’s residency. CGI Art. 750 ter defines three mutually exclusive scenarios.

Scenario 1
Donor / Deceased is a French Tax Resident
Tax base: All assets worldwide — French and foreign, movable and immovable.
Double tax: Eliminated via CGI Art. 784 A credit for foreign tax paid on foreign assets, or by treaty.
Practical impact: A French resident who dies owning a UK property, a US brokerage account, and a Swiss bank account owes French duty on all of it.
Scenario 2
Non-Resident Donor/Deceased; Non-Resident Heir
Tax base: French-situs assets only (CGI Art. 750 ter, 2°).
Key assets caught: French real estate (direct or indirect); French securities; receivables on French debtors.
Practical impact: A British resident who dies owning a Paris apartment owes French succession duty on it, even if both the deceased and the heirs live in the UK.
Scenario 3
Non-Resident Donor/Deceased; French-Resident Heir
Tax base: French-situs assets plus foreign assets, if the heir has been resident in France for at least 6 of the 10 preceding years (CGI Art. 750 ter, 3°).
Double tax: CGI Art. 784 A credit applies to foreign tax paid on foreign assets caught by this rule.
Practical impact: A French resident who receives a gift or inheritance from a foreign parent may owe French tax on assets located in the parent’s home country.
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What Makes You a French Tax Resident?

Residency for French succession/gift duty purposes follows the same CGI Art. 4 B criteria as income tax residency. You are a French tax resident if France is your foyer (the place where you normally live and your family is centred); your principal place of stay (more than 6 months present); the location of your professional activity (unless accessory); or the centre of your economic interests. Only one criterion needs to be met.

In case of dual-residency conflicts, most French tax treaties apply tie-breaker rules in order: permanent home → centre of vital interests → habitual abode → nationality.

What Counts as a French-Situs Asset

In scenarios 2 and 3, understanding what “French-situs” means is critical for non-residents. The following are treated as French-situs assets:

  • French real estate: land, buildings, apartments located in metropolitan France or overseas departments.
  • French securities and financial instruments: French government bonds; shares or units in companies with their registered office or effective management in France; receivables owed by a French-domiciled debtor.
  • Industrial and commercial assets located in France: businesses, goodwill (fonds de commerce), tangible personal property physically in France.
  • Intellectual property: patents and trademarks exploited or licensed in France.

The location of movable securities follows the debtor’s location, not where the securities are physically deposited. A French share held through a foreign custodian is still a French-situs asset.

French Property Held Through Foreign Companies

This is one of the most practically significant rules for international investors in French real estate. Two separate mechanisms ensure that interposing a non-resident company between an owner and French real estate does not eliminate French succession tax exposure.

Indirect Ownership Rule

An immovable situated in France is treated as directly owned by a non-resident deceased or donor who, alone or with their spouse, ascendants, descendants or siblings, held more than 50% of the shares of any legal entity owning (directly or through a chain of companies) that immovable — regardless of how many intermediary entities are interposed (CGI Art. 750 ter, 2°). The taxable value is the proportion of the immovable’s value in the entity’s total asset base.

Non-Resident Predominantly Real Estate Companies

Shares in a non-listed non-resident company whose assets consist principally of French real estate are deemed “French” for succession/gift tax purposes, taxed in proportion to the ratio of French real estate to the company’s total assets. The administration’s practice is to assess this ratio using only the company’s French assets in the denominator, though this interpretation is contested. Real estate used in the company’s own industrial, commercial, agricultural or professional activity is excluded from this calculation.

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Warning: Shares in Non-Resident Companies Are Not Always Protected

A common misconception is that holding a French property through a foreign company makes it invisible to French succession tax. Under the indirect ownership rule (50%+ threshold) and the predominantly real estate company rule, French tax may still apply. The outcome depends on the treaty: most French treaties do not adopt the OECD model definition of “immovable property” broadly enough to catch company shares, so treaty protection is possible. But for assets held in non-treaty countries, or where the relevant treaty explicitly includes real estate company shares, the protection disappears. The Cour de cassation held in 2015 that shares in a Monegasque property-rich SCI fell under the “other assets” article of the France-Monaco treaty, not the real estate article — and were therefore not taxable in France (Cass. ass. plén. 2-10-2015 n° 14-14.256). The analysis is treaty-specific.

Avoiding Double Taxation

The Internal Credit (CGI Art. 784 A)

Where no treaty applies, France provides an internal mechanism to prevent double taxation: foreign succession or gift duty paid on assets located abroad is creditable against French duty on those same assets. The credit is capped at the French duty attributable to those foreign assets — France will reduce its charge but will not refund an excess where the foreign tax exceeded the French rate. The credit applies in scenarios 1 and 3. Practically, it requires filing form 2740 with the relevant tax office, accompanied by evidence of the foreign tax actually paid (including a currency conversion at the Paris rate on the date of payment).

Tax Treaties

France has very few succession tax treaties and even fewer gift tax treaties (and has indicated it no longer intends to conclude new succession treaties). Where a treaty exists, it either uses the exemption with effective rate method (France exempts assets taxed in the other state but uses them to calculate the rate applicable to French assets) or the credit method (France taxes everything but credits the foreign tax). Most French treaties use the exemption method with a taux effectif.

The taux effectif calculation works as follows: first, the French duty is computed as if all assets were taxable in France (establishing the average effective rate); then that rate is applied only to the French-taxable portion. This means that the existence of high-value foreign assets — even if exempt from French duty under the treaty — increases the effective rate on the French assets.

Notable bilateral arrangements include:

  • France-US (convention 1978, amended 2004): uses the credit method; also contains a “right of follow-up” allowing the US to tax former US citizens and long-term residents for 10 years after renouncing their status if done to avoid US tax.
  • France-UK (1963): uses the credit method; notably silent on the deductibility of debts.
  • France-Belgium (1959): France retains the right to tax French real estate but exempts movable assets; taux effectif applies to the real estate.
  • France-Sweden (1994): includes a right of follow-up for Swedish nationals who were resident in France for 5 of the previous 7 years, allowing Sweden to tax them post-emigration.

Deductibility of Debts for Non-Residents

Non-resident estates can only deduct debts from the French taxable base if those debts are specifically linked to a French-situs asset (for example, a mortgage on a French property). General personal debts of the deceased — even those contracted in France — are not deductible from the French taxable base if they are not tied to an identifiable French asset. Where a treaty is in place, it may allow excess debt from one state to spill over into the other (following the OECD model), but this depends on how the treaty is worded.

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Scope: Debt and the French Taxable Base

For non-residents, the rule is straightforward in principle but produces asymmetric results in practice: a non-resident who mortgaged their French property to fund foreign assets gets the debt deduction on the French side; one who borrowed in their home country against the French property as collateral (but the loan is not formally charged on the French asset) may not. The form of the financing matters as much as its economic purpose.

Practical Compliance for Non-Residents

The succession declaration must be filed at the Recette des non-résidents (TSA 50014, 10 rue du Centre, 93465 Noisy-le-Grand Cedex). The deadline is one year from the date of death for deaths occurring abroad (CGI Art. 641). Late filing triggers the usual interest charge under CGI Art. 1727 plus the penalty under Art. 1728 from the first day of the 13th month following death. Gifts are declared separately at the same office.

Foreign assets included in the French tax base must be valued at their fair market value on the date of death or gift, using local valuation rules under the supervision of the French administration. Foreign currency assets are converted at the Paris rate on the date of death.

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Planning Point: The 6-Year Rule for French-Resident Heirs

The most overlooked exposure for non-residents is scenario 3: a foreign parent who gifts or bequeaths foreign assets to a child who has lived in France for 6 of the last 10 years may trigger French duty on assets that have no connection to France at all. The 6-year count is based on the heir’s residence history, not the donor’s. Structuring gifts before the heir has been in France for 6 years, or timing them carefully, can be decisive. Tax treaties (where they cover donations) generally override this rule — but most French treaties do not cover gifts, leaving the internal rule to apply.

Summary: Practical Risk Checklist for Non-Residents
Do you own French real estate? It is a French-situs asset regardless of where you live. French succession duty will apply to it in every scenario, subject to any applicable treaty.
Do you hold it through a foreign company? The 50%+ indirect ownership rule and the predominantly real estate company rule may still treat the shares as French-situs. Treaty analysis is essential before assuming protection.
Are your heirs or donees resident in France? If they have been in France for 6 of the last 10 years, scenario 3 may tax your foreign assets in France. Consider timing gifts before that threshold is reached.
Is there a French succession treaty? If yes, check which method it uses (exemption with taux effectif or credit) and whether it covers gifts as well as successions. Most French treaties cover only successions.
No treaty? Use the CGI Art. 784 A internal credit to offset foreign tax paid on foreign assets against the French duty on those same assets. Retain all evidence of foreign tax payment for the credit claim.
Filing deadline: 1 year from the date of death for deaths abroad (CGI Art. 641). File at the Recette des non-résidents. Late filing triggers interest from day 1 plus penalties from month 13.
Owning French Assets as a Non-Resident or Planning an International Estate?

Our French law practice advises non-residents on French succession and gift duty exposure, treaty analysis, double-tax credit claims, and the structuring of French real estate holdings to reduce succession tax risk.

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Legal Notice. This article is provided for general information and educational purposes only. It does not constitute legal or tax advice. French succession and gift tax rules are complex and treaty-dependent. Always verify the applicable treaty and consult a qualified French tax lawyer before making structuring decisions.