Transferring French Assets

Transfering French Assets

Transferring French assets to children or SCI (Société Civile Immobilière) members is subject to specific legal procedures and tax rules. The main vehicle for such transfers is through gifts (donations), inheritance, or gradually by transferring SCI shares.

Transferring Assets to Children

French law allows each parent to give each child up to €100,000 tax-free Beyond this allowance, a progressive gift or inheritance tax applies, rates range and can be improved upon we need to look at each Matter case by case.
Transfers are possible via our avocat in come cases other wise processed in house with us for engrossment via Notaire
taking direction from the notaire It’s common to structure gifts so the donor retains usufruct (life interest), giving children the remainder interest (“nue-propriété”). This reduces the immediate taxable value of the gift, as only the remainder interest is valued for the tax calculation in French . However this is erroneous advice as HMRC take no such view thus each case needs to be looked at individually
French forced heirship rules require that a set portion of the estate goes to children, limiting the ability to give all assets to a single heir unless offset by other assets. This again would be the received wisdom however mechanisms can be employed to address this otherwise stolid position

Transferring Assets via an SCI

An SCI is a common tool for estate planning in France. Parents can transfer shares in the SCI to their children, taking advantage of the same , €100,000 tax-free allowance for each parent and child.
Shares can be transferred gradually, enabling tax-efficient transmission over multiple years and generations.
The process also involves a notaire for official registration, and the value of SCI shares transferred to children is subject to the same rules and tax rates as direct property gifts. However again individual examination of each case can produce more tax efficient results
SCI membership and share transfer provides flexibility, contrary to popular myth SCI management is not difficult or indeed owners but it does require diligence we offer a service that is flagged in advance so that fairly pedestrian but nonetheless obligatory decorations can be made there are only two . However to fall foul of these creates enormous difficulty and should be avoided not availing oneself of the advantages simply because of the perfunctory administrative disadvantages is otherwise in the overall scheme of things

Tax and Practical Considerations

Proper advice and involvement is required for any legal transfer of French assets; notaires are state-appointed and handle all registration and tax submission duties. Thus close cooperation with such offices is a given however the most advantageous platform presented properly to the notarial office securing the knowledge that what is being proposed is perfectly feasible can deliver enormous advantages
Maintaining control (usufruct) versus transferring full ownership should be decided based on personal wishes, asset value, and tax planning. The introduction of the Usufruct is the obvious way of maintaining control however there are other ways again case specific the deliver the same thing without the negative emergent from HMRC’s view that life tenancy is still taxable at full value the property in effect negating the entire purpose of the exercise