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France – United States Inheritance
France – United States Estates: French Inheritance Tax and the 1978 Treaty
Tax lawyer in Paris – when and how France taxes a Franco-American estate
Key points
- Domestic law (Article 750 ter of the French General Tax Code (CGI)): worldwide assets if the deceased was domiciled in France; otherwise, assets located in France, and possibly assets received by an heir who has been resident for 6 of the last 10 years.
- Treaty of 24 November 1978 (amended by the Protocol of 8 December 2004): it limits this right to tax according to the domicile, the nationality of the deceased and the location of the assets.
- Calculation: allowance of €100,000 per child, exemption for the surviving spouse and PACS partner, tax scale of up to 45% in the direct line.
- Double taxation: if the deceased was domiciled in France, the US tax is deducted from the French tax, up to the amount of French tax attributable to the assets concerned (Article 12).
- Return: form 2705, within 6 months of a death occurring in mainland France or within 12 months if the death occurred abroad.
When does France tax an estate with a US connection?
Article 750 ter of the CGI provides for three situations:
- Deceased domiciled in France: all of their assets, whether located in France or abroad, are taxable in France.
- Deceased domiciled outside France: only their assets located in France (real estate, bank accounts, shares in French companies, etc.) are taxable.
- Heir domiciled in France on the date of death and for at least 6 of the last 10 years: the foreign assets they receive are in principle taxable, even if the deceased lived abroad.
The treaty takes precedence over these domestic rules and may reduce, or even eliminate, French taxation.
How does the treaty determine the domicile of the deceased?
In the event of dual domicile, Article 4 applies, in turn, the permanent home, the centre of vital interests, the habitual abode and then nationality; failing that, the tax authorities consult each other.
5-out-of-7-years rule (Article 4, paragraph 3): an individual who is a national of only one of the two States is deemed to be domiciled solely in that State if they clearly intended to retain their domicile there and had been domiciled in the other State for less than 5 of the 7 years preceding death. For certain professional assignments, the period may be extended to less than 7 out of 10 years.
Thus, an American who has been living in France for 3 years for work, without French nationality and who has retained the intention of returning home, is not taxed in France on their worldwide assets, but only on the assets that the treaty allocates to France.
Which assets can France tax under the treaty?
| Type of asset | Deceased domiciled in France | Deceased domiciled in the United States |
|---|---|---|
| Real estate located in France, including shares in predominantly real estate companies (Art. 5) | Taxable in France | Taxable in France |
| Real estate located in the United States (Art. 5) | Taxable in France, with deduction of the US tax (Art. 12) | In principle not taxable in France, unless the deceased was a French national (Art. 8) |
| Assets of a permanent establishment (Art. 6) and tangible movable property (Art. 7) | Taxable in France; deduction of the US tax if they are located in the United States | Taxable in France if located there |
| Bank accounts, shares, bonds, receivables (Art. 8) | Taxable in France, even if held in the United States | Taxable in France only if the deceased was a French national, within the limits of Article 750 ter |
Article 8 is decisive: apart from real estate, permanent establishments and tangible movable property, a State may tax only if the deceased was a national of, or domiciled in, that State. If the parent domiciled in the United States was not French, the resident-heir rule is therefore in principle neutralised.
How is French inheritance tax calculated?
- Allowances on each heir’s share: €100,000 for each child and each parent, €15,932 between brothers and sisters (full exemption subject to conditions, Article 796-0 ter of the CGI), €7,967 for nephews and nieces, €1,594 where no other allowance applies, and an additional €159,325 for a disabled heir.
- Spouse and PACS partner: exempt (Article 796-0 bis of the CGI).
- Direct-line tax scale: from 5% up to €8,072 to 45% above €1,805,677; between brothers and sisters, 35% and then 45% above €24,430; 55% up to the 4th degree of kinship and 60% beyond that or between unrelated persons.
- Tax look-back: gifts made by the deceased to the same heir within the previous 15 years reduce the available allowance and are taken into account for the tax scale (Article 784 of the CGI).
- Community property: for French tax purposes, property acquired for consideration during the marriage by a deceased person domiciled in the United States or of US nationality, and passing to their spouse, is treated as community property, unless another regime was expressly chosen (Art. 11, paragraph 1).
How should US retirement accounts, life insurance and trusts be treated?
- 401(k) and IRA: no French provision determines their characterisation; depending on the plan and the beneficiary designation, they may form part of the estate or be treated similarly to an insurance policy. Case-by-case analysis is required.
- Life insurance taken out in the United States: the French regimes of Articles 990 I and 757 B of the CGI may apply where the insured or the beneficiary has a sufficient connection with France; schedule 2705-A of the return covers these policies.
- Trusts: they are subject to a specific French regime (Article 792-0 bis of the CGI), with reporting obligations for the trustee. See our dedicated page on US trusts.
How is US tax taken into account in France?
- Deceased domiciled in France (Art. 12, paragraph 2 a): France taxes the entire estate and deducts the tax paid in the United States on the assets that the treaty allows the United States to tax, for example a property in New York. The deduction may not exceed the portion of French tax attributable to those assets.
- Deceased US citizen domiciled in France: in addition, it is the United States that grants a credit for the French tax (Art. 12, paragraph 2 b).
- Outside the treaty: where France taxes on the basis of Article 750 ter without the treaty settling the matter, Article 784 A of the CGI allows foreign tax paid on assets located outside France to be offset, up to the amount of French tax attributable to those assets.
- Proof: actual and final payment of the US tax must be evidenced (form 2740).
- Time limit (Art. 13): the claim must be made before the latest of the following deadlines: the French time limit for filing a claim, 5 years from the date of death, or 1 year after the final assessment and payment of the US tax, if these occur within 10 years of the death.
Which returns must be filed in France, and by when?
- Forms: return 2705, with schedule 2705-S (inventory of assets and liabilities, calculation of the tax), schedule 2706 (details of assets and liabilities) and, where applicable, schedule 2705-A (life insurance).
- Deadlines: 6 months from the date of death if it occurred in mainland France, 12 months in all other cases.
- Competent office: the registration office (service de l’enregistrement) for the deceased’s domicile; for a deceased person domiciled outside France, the non-residents’ tax office (recette des non-résidents).
- Exemption: no return is required if the gross assets are below €50,000 for children and the spouse (€3,000 for other heirs), subject to conditions.
- Payment: upon filing the return, with the option of requesting payment in instalments (up to 1 year, or 3 years if at least 50% of the assets are illiquid) or deferred payment (in particular where ownership is split), subject to guarantees and interest.
- Late filing: late-payment interest of 0.20% per month and, from the first day of the 7th month following the expiry of the filing 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), a 10% surcharge (Article 1728 of the CGI), increased to 40% or 80% in certain cases.
What practical cases illustrate these rules?
French-resident heir of a parent domiciled in the United States. Paul has lived in Lyon for 12 years; his father, a US citizen without French nationality, lived in Boston and leaves him a securities portfolio and a house in Massachusetts. Under the treaty, France can tax neither the securities (Art. 8) nor the house, as the 6-out-of-10-years rule is set aside. An apartment in Nice, on the other hand, would remain taxable in France. If the father had held French nationality, the analysis would be different, for both the securities and the house.
French-resident deceased with assets in the United States. Claire, domiciled in Paris, leaves an apartment in Miami and a securities account in New York to her two children. France taxes the whole estate; each child benefits from an allowance of €100,000. Any US tax paid on the apartment is deducted from the French tax attributable to that apartment; the securities account is in principle subject to French taxation only if Claire was not American.
Why use a tax lawyer?
- Determine the deceased’s domicile under the treaty and the list of assets that France can actually tax.
- Calculate the French tax, the available allowances and the deduction of US tax within the limits of the treaty.
- Prepare return 2705 and, if necessary, request payment in instalments or deferred payment.
- Coordinate the case with the notary and US advisers, and plan ahead for the transfer of assets.
FAQ
I live in France and I am inheriting from my parent who was domiciled in the United States: do I have to pay tax in France?
Not necessarily. The French rule on heirs resident for 6 of the last 10 years gives way to the treaty, which reserves accounts, securities and similar assets to the State of domicile or nationality of the deceased: if your parent did not have French nationality, only their assets located in France (real estate in particular) remain, in principle, taxable in France.
My parent, domiciled in France, owned an apartment in the United States: is the US tax deductible?
Yes. France taxes the apartment together with the rest of the estate, then deducts the tax actually paid in the United States on that asset, up to the portion of the French tax attributable to it.
What is the time limit for claiming the deduction of US tax?
Article 13 of the treaty applies the latest of the following deadlines: the time limit for filing a claim under French law, 5 years from the date of death, or 1 year after the final assessment and payment of the US tax, provided these occur within 10 years of the death.
Glossary
Treaty domicile: the domicile determined under Article 4 of the treaty where the deceased is considered to be domiciled in both States.
Portion of French tax: the fraction of the French tax corresponding to the assets also taxed in the United States; it caps the deduction of US tax.
Estate tax: the US federal tax on estates, deductible in France under the conditions of the treaty.
Further reading
- France – United States Tax Treaty of 24 November 1978 on estates and gifts, as amended by the Protocol of 8 December 2004 (consolidated text on impots.gouv.fr; Protocol published by Decree No. 2007-78 of 22 January 2007).
- BOI-INT-CVB-USA-20: French tax authorities’ guidelines on this treaty; BOI-ENR-DMTG-10-50-60: offsetting of taxes paid outside France.
- Articles 750 ter, 777, 779, 784, 784 A, 792-0 bis, 796-0 bis, 1727 and 1728 of the CGI.
- See also: US or UK / France estates, US trusts, France – United Kingdom estates, foreign RSUs and stock options.
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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