I Want to Give My Home in France to an English Charity, is This Possible?

Question

I am a British national and lived in France for 20 years. In 2020 I moved back to York, England to be closer to my family, but I have kept my French home and still visit regularly on holiday etc.

I am widowed and do not have not have any children of my own, however I am a step-mother to two adult children.

I am in the process of updating my Will and I would like to leave to my French home to an English charity. Is this possible?

Succession

In France there are forced heirship rules, meaning that if you have children, or are married, you must leave a proportion of your assets in a certain way. The proportion of your French assets that you must leave your family will be dependent on the number of children that you have.

If you have no children and are not married, then broadly speaking, you can leave your French assets as you wish. For those people with children, they may be able to elect British law in their Will to avoid the French forced heirship rules (although the effectiveness of this has been reduced in recent years in some circumstances).

As you have no children, and are now widowed, you can leave your French home to a British charity. Although you have step-children, unless you legally adopted them, they will not be recognised as your children so will have no right to inherit your French assets.

If you do leave your French home to an English charity, the charity will likely need help from cross-border solicitors, such as Stone King, who can help them prepare and collate the correct paperwork, allowing them to sign the necessary paperwork in France to accept their inheritance.

Inheritance Tax

As your property is located in France, but you are domiciled in the UK,  it will be assessed both for French inheritance tax AND UK inheritance tax on your death.

In the UK there is 100% charitable relief available on inheritances passing to British charities. This means that if you leave your French home to an English charity there will be no UK inheritance tax for your estate to pay on your French property.

There is also 100% charitable relief in France for inheritances passing to a French charities (and other EU charities). However, because you wish to leave your French home to an English charity, it won’t qualify for French charitable relief, which means that there will likely be French inheritance tax for the English charity to pay in France. This will be calculated at the rate of 60% of the value of the property which exceeds a small tax free allowance of €1,594. This means that the English charity could have a substantial tax bill to pay.

To avoid this, you could instead consider leaving your French home to a qualifying French charity. If you did this, there would be no French inheritance tax to pay. However there may then be UK inheritance tax to pay!

As each person’s circumstances are different, there is no ‘one size fits all’ solution.

The inheritance tax regime in the UK is calculated differently to that in France. In the UK, in some cases a married couple in the UK can leave up to £1,000,000 inheritance free.

This means that if your estate qualifies for the £1,000,000 allowance and your estate is worth less than that amount, including the value of your French home, there will be no inheritance tax payable regardless of who you leave your French home to.

For example:

Tax-free allowance                    £1,000,000

Value of UK assets                    £600,000

Value of French home               £250,000

Total value of worldwide assets  £850,000

As the total value of the worldwide assets is less than £1,000,000, there will be no UK inheritance tax to pay, regardless of whether the French property passes to a UK or French charity.