Daphne Foulkes
EU SUCCESSION RULES – the perfect solution?
I
don’t have any statistics, but it seems to me that more properties are being sold in France - at least this seems to be the case in the Aude and the Herault. Many of the properties are being purchased by British people, who are taking advantage of the strength of Sterling against the Euro, but they are also planning to become resident here. I know this because my telephone has been particularly busy for this time of the year, as I am being contacted by many of these people for advice. As well as seeking advice on how to restructure financial assets for French tax-efficiency, French inheritance planning is also high on the agenda. Rather worryingly, I am finding that many clients think that potential French inheritance issues are going to disappear when the EU Succession Rules come into effect in August 2015. Whilst it is true that people will be able to choose the succession rules of their country of nationality, what is being misunderstood is the fact that this will not change the inheritance tax rules that apply. The most common scenario that we come across is one that involves there being children from a previous marriage. Unless the couple buy the property ‘en tontine’ or the children enter into a family pact with their natural parent, the surviving step-parent will not have full control over the property. The EU Succession Rules could change that, for example, if the couple elect for the succession rules of their country of nationality to apply and that country does not have any concept of children being ‘protected heirs’. A perfect solution? Well yes for protecting the surviving step-parent, but if the stepparent wishes to leave the property to the
step-children, then there will still be a 60% inheritance tax bill., so not quite the perfect solution. Like all aspects of financial planning, every case will have to be looked at on its own merits and what seems clear is that there will be some cases where the ‘French way’ may still be best – see my own personal situation below, which demonstrates that tried and tested solutions already exist for dealing with property, plus assurance vie will continue to be an effective tool for succession planning for financial assets. You can find out more about this by reading my article on ‘Inheritance Planning in France’ on this magazine’s website or by contacting me directly for a copy. As a British citizen who is in a French civil partnership (PACS) with someone who has dual US and British citizenship, as well as him having two daughters and two grandchildren living outside of the EU, we will not be rushing ahead to request that UK succession rules apply to our estates. No – we will definitely continue to depend upon our French family pact and assurance vie because in that way, we know that when the time comes, the survivor will be fully protected and the potential inheritance tax bills of our heirs have been mitigated. Now is also a good time to mention that we are taking bookings for our client seminars, which will be taking place across France – “Le Tour de Finance - Bringing Experts to Expats” during the Autumn. Our industry experts will be presenting updates and outlooks on a broad range of subjects, including:
Financial Markets Assurance Vie Pensions/QROPS Structured Investments French Tax issues Currency Exchange
The date for the local seminar is Friday, 10th October 2014 at the Domaine Gayda, 11300 Brugairolles. This is always a very popular event and so early booking is recommended. But if you are reading this further afield, you may be interested in attending one of our other events, for example, St Endréol in the Var on 8th October and full details of all venues can be found on our website at www.spectrum-ifa.com/seminars/ Places for our seminars are limited and must be reserved, in advance. So if you would like to attend one of the events or you would anyway like to have a confidential discussion about any aspect of financial planning, please contact me, as soon as possible, either by e-mail at daphne.foulkes@spectrum-ifa.com or by telephone on 04 68 20 30 17. The above outline is provided for information purposes only and does not constitute advice or a recommendation from The Spectrum IFA Group to take any particular action on the subject of investment of financial assets or on the mitigation of taxes. The Spectrum IFA Group advisers do not charge any fees directly to clients for their time or for advice given, as can be seen from our Client Charter here
SIRET 522 658 194 00017 Numéro d’immatriculation ORIAS 10 056 800
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The HAT September 2014.indd 36
The Herault & Aude Times
01/09/2014 04:25:13