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France – United Kingdom Inheritance
France – United Kingdom Estates: French Inheritance Tax and the 1963 Treaty
Tax lawyer in Paris – French taxation of Franco-British estates
Key points
- Franco-British Treaty of 21 June 1963: it covers only estates, not gifts, and applies neither to the Channel Islands nor to the Isle of Man.
- Deceased domiciled in France: France taxes the entire estate, wherever the assets are located, and grants a tax credit for the UK tax paid on assets located in the United Kingdom.
- Deceased domiciled in the United Kingdom: France may tax only assets located in France within the meaning of the treaty, even if the heir resides in France.
- French inheritance tax: allowance of €100,000 per child, exemption for the spouse and PACS partner, tax scale of up to 45% in the direct line, and 55% or 60% beyond brothers and sisters.
- Return No. 2705 within 6 months of the death (12 months if the death occurs outside France), with form No. 2740 to offset the UK tax. Claim for offset or refund: 5 years from the date of death.
Summary
For a Franco-British estate, the key question on the French side is: can France tax, and on which assets? The answer depends first and foremost on the domicile of the deceased within the meaning of the 1963 treaty, and then on the location of each asset under the rules specific to that treaty, which differ significantly from those of more recent treaties.
When can France tax an estate with a UK connection?
Under domestic law, Article 750 ter of the French General Tax Code (CGI) subjects the following to French inheritance tax: (1°) all assets, whether located in France or outside France, where the deceased was domiciled in France for tax purposes; (2°) assets located in France where the deceased was domiciled outside France; (3°) assets located outside France received by an heir who has been domiciled in France for at least 6 of the last 10 years.
The treaty limits these rules. Domicile is first assessed under the legislation of each State; in the event of dual domicile, the permanent home, the centre of vital interests, the habitual abode and then nationality are applied in turn, and failing that, an agreement between the tax authorities (Article 2).
| Situation | French inheritance tax |
|---|---|
| Deceased domiciled in France | All assets, including those located in the United Kingdom; credit for the UK tax paid on assets located in the United Kingdom (Article 6) |
| Deceased domiciled in the United Kingdom | Only assets located in France; other assets are not taken into account, even for determining the tax rate (Article 5) |
| Heir resident in France, deceased domiciled in the United Kingdom | The 6-out-of-10-years rule (Article 750 ter, 3°) is set aside by the treaty: no French tax on assets located outside France |
To determine where an asset is “located” (Article 4), the treaty provides in particular that: real estate and real property rights are located where the property is situated; tangible movable property where it is found at the time of death; shares and interests in companies in the State where the company was incorporated; a business and interests in partnerships where the business is operated; receivables (including bank balances, according to the interpretation generally adopted), insurance proceeds and intellectual property in the State of domicile of the deceased. Where France taxes the estate of a person domiciled in the United Kingdom, it must grant the same allowances and exemptions as if the deceased had been domiciled in France (Article 5, § 3).
How is French inheritance tax calculated?
The tax is calculated on the net share received by each heir, after the allowance:
- Spouse and PACS partner: exempt (Article 796-0 bis of the CGI).
- Children and parents: €100,000 each, then a tax scale from 5% to 45%.
- Brothers and sisters: €15,932, then 35% up to €24,430 and 45% above that (subject to the exemption under the conditions of Article 796-0 ter).
- Nephews and nieces: €7,967, then 55%. Relatives up to the 4th degree: 55%; beyond that and unrelated persons: 60%, after an allowance of €1,594 where no other allowance applies.
- Disabled heir: additional allowance of €159,325.
The direct-line tax scale applies in brackets: 5% up to €8,072, then 10%, 15%, 20% (up to €552,324), 30%, 40% and 45% above €1,805,677. Gifts made by the deceased to the same heir within the previous 15 years are added back: they use up the allowance and push the heir into higher brackets (Article 784 of the CGI).
How are the most common UK assets treated?
- House or apartment in the United Kingdom: an asset located in the United Kingdom. It is taxable in France only if the deceased was domiciled in France, with the corresponding UK tax offset.
- Shares in UK companies: located in the United Kingdom (place of incorporation of the company), with the same consequences.
- Bank accounts: as receivables, they in principle follow the domicile of the deceased. For a deceased person domiciled in the United Kingdom, this rule may lead to the exclusion of balances held in France from the French tax base: a point to be checked case by case.
- UK pensions and death benefits: their characterisation under French law (part of the estate or a regime similar to the life insurance regime of Articles 757 B and 990 I) depends on the features of the plan and must be examined with care.
- Trusts: specific regime (Article 792-0 bis of the CGI); see our dedicated page on UK trusts.
How is UK tax offset in France?
Where the deceased was domiciled in France, Article 6 of the treaty provides that France credits against the French tax attributable to an asset located in the United Kingdom an amount equal to the UK tax paid on that same asset, up to the amount of the corresponding French tax. Since inheritance tax, which replaced the UK tax referred to in the 1963 text, is levied on the estate as a whole before distribution, it must be apportioned asset by asset, and then between heirs, in order to calculate the usable credit.
In practice:
- attach to the return form No. 2740 and evidence of final payment of the UK tax (certificate or statement from the UK tax authority);
- if the UK tax is paid after the French tax, file a refund claim within 5 years of the death (Article 7).
Outside the treaty, in particular for gifts or assets located in the Channel Islands or the Isle of Man, Article 784 A of the CGI allows, in the cases covered by 1° and 3° of Article 750 ter, foreign tax paid on assets located outside France to be offset.
Which returns must be filed in France, and when?
- Form No. 2705 and its schedule 2705-S (inventory of assets and liabilities, calculation of the tax); 2705-A for life insurance policies; 2740 for foreign tax.
- Deadline: 6 months from the date of death if it occurred in mainland France, 12 months in all other cases, including a death in the United Kingdom.
- Competent office: for a deceased person domiciled outside France, the tax office for non-resident individuals (service des impôts des particuliers non-résidents, Noisy-le-Grand); otherwise, the office for the deceased’s domicile.
- Payment: upon filing the return, with the option of payment in instalments (in principle 3 instalments over one year, up to 7 instalments over 3 years if at least 50% of the assets are illiquid) or deferred payment (in particular for a transfer of bare ownership), on request, subject to guarantees and interest.
- Late filing: late-payment interest of 0.20% per month, and a 10% surcharge (Article 1728 of the CGI) from the first day of the 7th month following the expiry of the statutory deadline (i.e. from the 13th month after the death where the deadline is 6 months, and from the 19th month where it is 12 months), or more after formal notice.
Two practical cases
A parent domiciled in London, a French-resident child. The deceased leaves an apartment in London, a portfolio of UK shares and a studio in Nice. In France, only the studio in Nice is taxable; the child benefits from the €100,000 allowance, and the UK assets are not taken into account for determining the tax rate.
A deceased person domiciled in Paris who owned a house in Kent. France taxes the entire estate, including the house. The UK tax paid on the house is offset against the portion of the French tax attributable to that house, using form 2740, up to the amount of that tax.
Why use a tax lawyer?
- Determine the deceased’s domicile within the meaning of the treaty and the location of each asset.
- Prepare return 2705 and calculate, asset by asset, the available tax credit.
- Claim, within the 5-year time limit, a refund of any tax overpaid.
- Plan gifts in advance, as they fall outside the treaty.
FAQ
I am inheriting an apartment in London and I live in France: will I pay tax in France?
It all depends on the domicile of the deceased. If they were domiciled in the United Kingdom within the meaning of the treaty, France does not tax the apartment, even if you reside in France. If they were domiciled in France, the apartment forms part of the French estate and the UK tax paid on that asset is offset against the corresponding French tax.
Does the Franco-British treaty apply to gifts?
No, it covers only estates. For a gift, France applies Article 750 ter of the CGI; Article 784 A may, subject to conditions, allow foreign tax paid on assets located outside France to be offset.
What is the time limit for claiming the credit for UK tax?
The offset is claimed with the inheritance tax return (form 2740). If the UK tax is paid later, a refund claim must be filed within 5 years from the date of death (Article 7 of the treaty).
Are my bank accounts in France taxable if the deceased lived in the United Kingdom?
The treaty locates receivables in the State of domicile of the deceased. Bank balances may therefore, depending on the analysis adopted, escape French inheritance tax where the deceased was domiciled in the United Kingdom. This point should be checked before filing.
Glossary
Treaty domicile: the domicile determined by the treaty in the event of a conflict (permanent home, centre of vital interests, habitual abode, nationality).
Tax credit: the amount of UK tax deducted from the French tax, up to the amount of that tax.
Inheritance tax (IHT): the UK tax on estates, levied on the estate before distribution.
Further reading
- France – United Kingdom Tax Treaty of 21 June 1963 on estate taxes (text on impots.gouv.fr).
- BOI-INT-CVB-GBR-20: French tax authorities’ guidelines on this treaty.
- Articles 750 ter, 777, 779, 784, 784 A, 796-0 bis and 800 of the CGI; BOI-ENR-DMTG-10-50-60 (offsetting of taxes paid outside France).
- Forms 2705, 2705-S, 2705-A and 2740 (impots.gouv.fr).
- See also: US or UK / France estates, UK trusts, France – United States estates, international estates.
About the author
Me Marc Uzan is a tax lawyer in Paris who has practised tax law exclusively for more than 20 years. A graduate of the Master’s programme in taxation of the Paris University of Law and of ESSEC, and holder of the DSCG, he advises individuals and families on their international tax matters: cross-border estates and gifts, foreign accounts, moving to and from France, and tax audits.
Page updated on 27 September 2026. The information above is general in nature and is no substitute for an analysis of your personal situation.
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