Can I leave my French home to an English Charity and will Brexit change this?

Charlotte Macdonald, an associate solicitor in Stone King’s international and cross border team, sets out a number of scenarios that a British owner of French property may encounter.

Over a 12-part series of articles Charlotte will cover topics such as how to buy your property as a couple (jointly or not), the different legal implications for a married couple and a civil partnership, and what happens to the property on your death, including who it will pass to and what succession tax consequences there might be.

Scenario Six – Can I leave my French home to an English Charity and will Brexit change this?

Felicity is English, but lives in France.

Felicity purchased her home near La Rochelle with her late husband, Frank, when they moved to France 8 years ago. They decided to buy their home indivision, each owning a 50% share. At the time that they purchased their home they also make wills leaving the usufruit of their respective share of the property to each other on their deaths (more about usufruits next month).

Following Frank’s death last year, Felicity is able to stay in the property, but on her death Frank’s half of their home will pass totally to their two children.

Felicity worked in the charity sector for many years of her life, and in particular she feels very strongly about supporting a global disaster relief charity on her death. As her children are already entitled to receive Frank’s half of their home on her death, she would like to write a new will and leave her half of her home to charity.

Leaving assets to Charity in your will

As we have mentioned in earlier articles, as Felicity is English she can elect English law in her will. This means she can avoid the French forced heirship rules (under which she would have to leave the majority of her assets to her children) and instead leave some, or all of her assets to charity.

Felicity can choose to leave her assets to a French charity or an English charity. Both in England and in France generally any inheritances passing to charity pass inheritance tax free – there is however a caveat to this; in order for the inheritance to be tax free in France, the default rule is that Felicity would need to leave her assets to a French charity.

It has been possible in the past, although difficult; to argue that any French inheritance passing to an English-based charity should pass free of tax because both countries are in the EU. However it seems unlikely that this will be possible to do once Brexit has taken place.

If Felicity continues to live in France she may want to consider naming the French branch of her preferred global disaster relief charity in her will, to ensure that the charity receives the whole amount of her inheritance free of inheritance tax.

Previous scenarios;

Scenario 5 – Inheritance tax in France – I’ve inherited French assets but I live in England

Scenario 4 – There is a trust in my will, can this be subject to Inheritance Tax in France?

Scenario 3 – I have property in England and France. I don’t want to leave anything to my children in my will. Can I do this?

Scenario 2 – Leaving French Assets to Step-Children

Scenario 1 – Will French Law Prevent me from Leaving all my Assets to my Spouse?

For more information please contact Charlotte Macdonald, Dan Harris or Raquel Ugalde at Stone King LLP either by calling +44(0)1225 337599, or by emailing: [email protected]