What happens when someone dies owning property in the UK and France?

In this article, Charlotte Macdonald and Bryony Anning of Stone King LLP’s International and Cross-Border Team guide a client through the tricky process of cross-border estate administration. 

Peggy and Ted are a British couple who moved to France following their retirement. Their assets include their home in Bordeaux, a flat in Cornwall and a number of bank accounts in both countries. 

They have wills in place in which they leave everything to each other on the first death, and then to their two daughters on the second death. They have appointed each other as their executors. 

Peggy and Ted were visiting their daughters in Bristol when Peggy dies suddenly in a car accident. Ted comes to us for advice on how to administer Peggy’s estate in the UK and France. 

ACTIONS IN THE UK 

Initial steps

As Peggy’s executor, Ted is in charge of Peggy’s UK estate administration. Ted has decided that this is too much for him to do by himself, so decides to instruct a cross-border solicitor to help.  

Ted provides us with Peggy’s original will, death certificate and documentation relating to her assets (bank statements, property deeds, life insurance etc) and liabilities (mortgage statements, household bills, funeral fees etc). 

We undertake an analysis of Peggy’s will and her common-law domicile and establish that English law applies to the succession of her worldwide estate.  

Tax

Peggy was tax domiciled in France at the time of her death which means that France has primary taxation rights – only Peggy’s assets in the UK are liable to UK inheritance tax.  

In this case, there will be no UK inheritance tax payable because transfers between spouses are exempt and Peggy’s entire estate is passing to Ted.  

Although there is no inheritance to pay, it is still necessary to submit an inheritance tax return to HMRC. We will need to prepare the long-form inheritance tax return (IHT400) because of the value of Peggy’s assets in the UK. 

Grant of probate 

We will submit an application for an English grant of probate, which will confirm Ted’s authority to administer the estate in the UK.  

Once the grant is obtained, Peggy’s assets can be accessed (properties sold, bank accounts closed etc) and any outstanding debts can be paid. We will transfer the balance of the assets to Ted and the UK estate administration will be complete.  

ACTIONS IN FRANCE

Initial steps 

Ted will need to instruct a French property lawyer (notaire) to carry out the estate administration in France. We put Ted in touch with one of our contacts who specialises in cross-border matters. The notaire will undertake a review of Peggy’s will – the notaire agrees that English law applies. 

Identify the beneficiaries 

The role of the executor is not recognised in France in the same way that is in England, and usually the beneficiaries, or as they are more commonly referred to in France, the heirs (legataires), will be expected to sign the relevant succession paperwork. 

In identifying the beneficiaries, the notaire will need to consider the new French succession law which was passed on 1 November 2021, which applies in cases where the person who died was an EU resident – Peggy was French resident at the time of her death. 

This law stipulates that if the children do not receive their reserved share in accordance with French forced heirship rules, they will have the option to make a claim against their parent’s estate equal to the amount of their reserved share.  

Because Peggy left her entire estate to Ted (bypassing French forced heirship rules) the notaire will need to contact Peggy’s children and explain to them that they have the option to make a claim against the estate. In this case, the Peggy’s daughters waive their right to make a claim and agree that the terms of the will should be carried out – the assets should pass to their father, Ted.  

The notaire will prepare the notarial deed (acte de notoriété) which will formally recognise Ted as the sole beneficiary. 

Tax 

The notaire will submit the French inheritance tax return (déclaration de succession) and arrange for payment of any inheritance tax due. The deadline is six months if a person died in France or 12 months if the person died outside France. 

Because Peggy died in Bristol, the deadline is 12 months to submit the inheritance tax return. There is no tax to pay because transfers between spouses are exempt from inheritance tax in France. 

Distribution of the estate 

Finally, the notaire will prepare a deed to transfer Peggy’s French real estate – the attestation l’immobiliere. 

PRACTICAL POINTS

Ted has some practical questions:  

How long will it finish the estate administration in each country? 

It is difficult to give a precise indication of how long the process will take – cross-border administrations are notoriously difficult to predict. It is normal for it to take between 6-12 months to complete the estate administration in the UK, and between 9-18 months in France.  

This could take longer if Peggy’s estate is particularly complex or if her daughters challenge the will in either country.   

Will I need to travel to France to sign the various documents? 

No – the notaire can prepare a power of attorney (procuration) which will authorise another person to sign the relevant documents on Ted’s behalf. This will usually be an employee in the notaire’s office.  

How much will the probate process cost? 

At Stone King, our fees are based on the time it takes us to complete the work, rather than a percentage of the value of the estate. We will always provide you with an estimate of our fees at the outset of the matter.  

The notaire’s fees (frais de notaire) are set by the French state and are generally calculated as a percentage of the estate. Sometimes the notaire will charge an additional amount if the matter is particularly complex, which is often the case with cross-border estate administrations. 

There will be additional costs, including fees for the probate application, statutory advertisements and translations. 

For more information please contact the international and cross-border team at Stone King: Charlotte Macdonald, Dan Harris, Raquel Ugalde and Emma Seaton by calling +44(0)1225 337599, or by emailing [email protected].