Embassy of France in the US - Taxation Office

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TAXES: CANADA

Taxation Office French-Canadian Tax Issues

French-US Tax Issues French Tax System

Today's Date:

ESTATE TAXES

1 – When I died, would the assets I have in France be subject to French estate taxes?

2 – How is the French estate tax computed?

The provisions to avoid double taxation between France and Canada in estate tax matters are provided in article 23 of the French-Canadian income tax treaty of May 2, 1975.

Details:

When a deceased person was domiciled abroad, only the French assets are liable to estate taxes in France. Taxable assets include properties, tangible assets and shares in French companies.

b. When a deceased person was domiciled abroad and when the heirs are also domiciled abroad, foreign securities are not subject to French estate taxes.

2 - Allowances

Beneficiary

Allowance

Any heir or legatee

€ 1,500

Brothers or sisters

€ 5,000

Surviving spouses

€ 76,000

PACS (Civil Solidarity Pact)

€ 57,000

Parents, children or grand children by representation

€ 50,000

Grand children (gifts only)

€ 15,000

Any handicapped heir or beneficiaries

€ 50,000

Since January 1, 2005, a general € 50,000 allowance is applied on the estate received by the children and the surviving spouse. This allowance is distributed among the beneficiaries in proportion of their share. It is applied, after the personal allowance listed on the above-mentioned table.

Rates of taxation

I – Direct Lineage (children and parents and adopted children)

Portion of taxable estate

Rate

Below € 7,600

5%

Between € 7,600 and € 11,400

10%

Between € 11,400 and € 15,000

15%

Between € 15,000 and € 520,000

20%

Between € 520,000 and € 850,000

30%

Between € 850,000 and € 1,700,000

35%

Over € 1,700,000

40%

II – Surviving spouse

Portion of taxable estate

Rate

Below € 7,600

5%

Between € 7,600 and € 15,000

10%

Between € 15,000 and € 30,000

15%

Between € 30,000 and € 520,000

20%

Between € 520,000 and € 850,000

30%

Between € 850,000 and € 1,700,000

35%

Above € 1,700,000

40%

III – PACS

Portion of taxable estate

Rate

Below € 15,000

40%

Over € 15,000

50%

IV – Between brothers and sisters

Portion of taxable estate

Rate

Below € 23,000

35%

Over € 23,000

45%

V – Between relatives (up to the 4^th degree of parentage)

Portion of taxable estate

Rate

Net taxable estate

55%

VI – Between relatives (beyond the 4^th degree of parentage) or unrelated persons.

Portion of taxable estate

Rate

Net taxable estate

60%

Embassy of France in the US - April 15, 2005