American inheritance in France

As in all international inheritance cases, the place of residence of the deceased determines the applicable law, except for real estate.

In this case, the deceased was resident in the US and owned a house in France.

The inheritance declaration must be made in France for the real estate within 12 months of the death.

The US will named the two children as heirs.

Inheritance tax on the real estate was payable in France pursuant to Article 750ter of the General Tax Code.

The France/US tax treaty of November 24, 1978, and its amendment of December 8, 2004, were applicable.

The estate’s assets were €300,000 and its liabilities were €20,000. The net assets were therefore €280,000, or €140,000 per child. 

Inheritance tax in France is calculated in bands, and in this case, the applicable band was 20% after deducting an allowance of €100,000 per child.

The taxable assets were therefore €40,000 per child.

Inheritance tax was paid on these amounts.

The value of the property was estimated on the date of death.

However, the property could not be sold at that price.

In the meantime, the furniture was sold.

The house had to be maintained, the cleaning lady paid, maintenance work carried out, a bank account in France maintained, and viewings of the property arranged, after giving a mandate to a real estate agent.

The sale only took place five years later at a price of €180,000.

At that price, the heirs would not have paid inheritance tax.

A refund of inheritance tax was requested but was refused because the request must be made within two years of payment of the tax. Alternatively, it would have been necessary to prove an error in valuation, which was not possible.

The administration considered that between the date of death and the date of sale, there may have been a decrease in value that was not due to an error.

Conclusion: It is important to quickly decide on a market valuation and not try to sell the property for more than it is worth. It is preferable to set a reasonable price in the inheritance declaration, even if this means making an additional declaration on the day the house is sold for a higher price.

Done on 08/06/2025

Thierry Clerc