How much tax does the tax authority deduct on inheritance? MoneyVox offers you a series of 3 practical lawsuits on inheritance tax produced by the notary Maître Patrice Bonduelle in Paris. Here is an example of a couple with a tradition of 440,000 euros. Episode 1.
The French are resistant to inheritance rights. However, according to the Inequality Observer, only 13% of inheritance exceeds 100,000 euros and is therefore subject to tax. The vast majority are therefore completely exempt from taxes. So should the current system be reviewed? During the presidential campaign, the question of inheritance, the transfer of property and their taxation occupied a negligible part of the debate.
At the request of MoneyVox, Maître Patrice Bonduelle, a notary in Paris, handled several practical cases. A way to present the options available to you and choose the right tax if the situation arises.
Situation: A family with three children
Parents are married under the legal rule of the community And their wealth is formed 50,000 euros in cashIncluding life insurance 20,000 (nominating three children as beneficiaries), and three real estate assets:
- A house at Poitiers worth 250,000 euros;
- Two apartments worth 70,000 euros and students have been put up for rent in the same town.
When the husband dies …
Inheritance, living spouse, under the rules of legal marital rule, will receive Half of the generalExcluding life insurance, i.e. € 210,000 [(30 000 + 250 000 + 70 000 +70 000) / 2].
The surviving spouse will also have the other half of the estate, an alternative to the full ownership of the property. We consider here that the option relates to মালিক in full ownership, i.e. 52,500 euros (এর 210,000) for a total of 262,500 euros. The surviving spouse will be exempt from inheritance tax on the amount received.
Three children will get 6 of the estate That means a total of 157,500 euros (21 210,000) and 52,500 euros each. Upon application for an allowance of 100,000 euros paid between parents and children provided by Article 779 of the General Tax Code (CGI), Children also do not have to pay inheritance tax.
What about life insurance?
Life insurance relates to 20,000 euros, premiums paid 70 years before the insured, they are not part of the estate assets. Each of the three children will receive 6,667 euros for which a reduction of 152,500 euros should be applied (Section 990 I of the CGI). These amounts are also tax free.
Imposition of life insurance tax in case of death
In case of blood donation before the death of one of the spouses ….
In case of transfer of all assets except the original residence, 30,000 euros in cash has been distributed evenly so that the three children will each receive 10,000 euros. The grant allowance of 31,865 euros (Article 790% of the CGI) allows children to be exempted from gift tax on this money.
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In the case of two apartments of 70,000 euros (total 140,000 euros) each, the donation is also equitable and relates to the amount remitted with full ownership of the property. So each child gets 46,667 euros.
The reduction of a certain amount (100,000 euros) for each child makes it possible not to pay the gift fee on this transmission. Transmission of all assets except the main residence was tax free.
At the beginning of the inheritance, the surviving spouse, under the rules of legal marital rule, gets half of the community property. On the date of death of one of the spouses, the community consists of the main residence (250,000 euros). Here again, children will be exempt from inheritance tax.
“In this case, It is not necessary to assume a transmission for the couple Children, unless they want to help them in their lifetime or if they think their wealth will continue to grow over time “, explains Maitre Bonduel.
Inheritance tax: calculation, deduction, payment …