Two Australian beneficiaries inheriting a Paris apartment — €140,000 in French succession tax with no advance planning in place

The situation

Our clients were two adult siblings, both resident in Australia, who had inherited a two-bedroom apartment in the sixth arrondissement of Paris from their father. The property was valued at approximately €900,000 at the date of death. No French will had been prepared and no succession planning had been undertaken.

The challenge

French droits de succession apply to French-sited real property regardless of the domicile or residency of the deceased. Each sibling inherited a 50% interest valued at €450,000. The direct heir allowance of €100,000 per beneficiary reduced the taxable amount for each to €350,000. Applying the progressive scale, the combined liability was approximately €140,000, payable to the French tax authority before the property could be transferred.

Our approach

We introduced the siblings to a French notaire and a cross-border succession specialist in our network. The succession process was managed through the notaire in accordance with French succession law. We also coordinated with their Australian adviser on the domestic implications: no inheritance tax in Australia, but a new CGT cost base established at market value at the date of death for each beneficiary's share.

In parallel, we set out what advance planning could have achieved. An SCI structure, established and progressively gifted during the father's lifetime, would have reduced the taxable estate materially. Alternatively, an assurance vie arrangement could have placed the economic interest outside the French succession regime entirely. Neither option remained available after death.

The outcome

The succession was completed in full compliance with French requirements. The combined tax of approximately €140,000 was paid. The siblings are now registered owners. One has since engaged our network to review succession planning options on the property in the context of her own estate.