Inheritance planning – Part II

Succession, as previously discussed by our company in this blog, is a matter of significant importance but often overlooked. Planning your succession in advance can make it possible, from a transactional point of view, to avoid contingencies among the heirs and, from a tax point of view, to apply great optimizations – in particular with regard to the payment of rights of succession. 

However, since there is no inheritance tax or equivalent tax in the Principality of Andorra, it is important to note that the tax applicable to the heirs is that of the country of their tax residence, not that of the country of tax residence of the deceased. In this sense, and when referring to inheritance rights in France, it is necessary to remember what is established by the last paragraph of article 750 of the General Tax Code: the heirs are obliged to pay inheritance rights in France for all assets and rights received by the deceased, whether located in France or abroad, when these heirs have had their fiscal domicile in France for at least six of the last 10 years. In other words, the heirs will not be forced to pay inheritance rights in France when they have established their tax residence abroad. This temporary condition makes prior succession planning even more important for future heirs domiciled for tax purposes in France. 

Of course, each succession procedure is different and the casuistry on this subject is wide – particularly in relation to the type of assets transmitted during each succession which, if necessary, may continue to be subject to French inheritance rights despite compliance with of the conditions set out above. Consequently, it is essential to initiate this planning in the right time.

Thus, the intervention of various jurisdictions, including Andorra, and adequate and professional advice guarantee your heirs great transactional and tax advantages.

Our AUGÉ HOLDING GROUP, through its professional company AUGÉ LEGAL & FISCAL, offers inheritance planning consulting services from a civil and tax point of view, while having the best multilingual team and lawyers practicing in Andorra, France and Spain.