Our experience is not confined to the Netherlands. So if you have any questions about international situations, feel free to contact us and we will be able to help you or, if required, put you in contact with the relevant experts.
A house in France is covered by different inheritance rules than those which apply in the Netherlands. Remember this when buying a house or when drawing up your last will and testament! However, if properly handled you can arrange for the house to fall under Dutch instead of French inheritance law.
Mr and Mrs De Groot are married under Dutch law and there is a community of property between them. The couple have (has ?) three children. They buy a holiday home in France and shortly after this, Mr De Groot dies. There is no last will and there are no debts. Mrs De Groot is 61 years old. As a result of the statutory division, all the property in the estate will go to her. The children will obtain a claim on their mother.
In this case, French inheritance law applies to the holiday home in France and under French inheritance law the wife has two options:
She will either get full title to one quarter of the French estate and the children will get a quarter each.
Mrs De Groot will become the usufructuary of the French estate and the children will obtain the bare ownership.
In the first situation, the French consequences for inheritance tax and the risk of double inheritance tax being levied are negligible if the total net value of the share in home is not more than approx. € 600,000. In the second situation, the French inheritance tax levy is negligible if the total value of the share in home is not more than approx. € 750,000.
When Mrs De Groot dies it will again have to be determined whether French inheritance tax will have to be paid. In principle, an exemption of approx. € 155,000 per child then applies.
Reducing the Risk
The risk of French inheritance tax being levied or of double taxation for inheritance tax can also be reduced by financing the holiday home with a loan as debts can be deducted from the French estate. Finally, it needs to be pointed out that neither situation entitles Mrs De Groot to sell the holiday home without her children's cooperation.
If the laws of several countries apply, it is always important that you obtain good information in advance about fiscal and other aspects.
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