Inheritance tax fight for same-sex couples almost at an end

INEQUALITIES in the French inheritance tax system towards same-sex couples from outside France could soon be brought to an end.

At present the French system does not recognise couples who have registered under civil partnership arrangements in their own countries, so on the death of one the surviving partner is treated as a third party and will be charged inheritance tax.

But amendments have passed through the Senate that would recognise non-French civil partnerships, and it is hoped that its passage through the Assemblée Générale will run smoothly.

Regular contributor to This French Life, lawyer Guillaume Barlet of Bank House Investment Management Limited, said that the changes should help same-sex couples, but some questions were still outstanding.

"Although at this stage it is difficult to interpret in any way a text that has not yet been adopted in French Law and could still be altered, it is established that according to its authors 'the amendment aims to allow the production of effects in France of civil partnerships registered outside France. This would abolish the current constraint of cancelling a non-French civil partnership in order to be able to register for a French civil partnership (or PACS) and be subject to its legal regime'," Guillaume said.

"Once the Petite Loi (the name given when a French Bill has only been reviewed by one of the two Houses of the French Parliament) has been adopted by the Senate, it will be read and debated by the Assemblée Générale with a possibility to be read once again by both Houses before becoming an enforceable Loi.

"Only then can we be assured that the discrepancy of rules applied to the French and non-French civil partners will no longer exist.

"The scope of its application is yet to be determined but it is likely that non-French partners will see improvement on at least inheritance and pension rules."

While the UK recognises the French equivalent of its own civil partnership, the pacte civil de solidarité (PACS), the reverse is not the case.

Meaning should one or other partner die in France an inheritance tax bill of 60 per cent will be sent to the surviving partner, with those affected having little option but to pay up.

A number of readers contacted the site to highlight the problems they faced, including Jerry, whose partner of over 30 years died from a heart attack and despite having been in a civil partnership in the UK faced an inheritance tax bill on one half of the value of their French house.

Related articles:
Inheritance tax fight taken to Europe - Dec 3, 2008
Route out of inheritance tax nightmare for same-sex couples - Oct 9, 2008
Inheritance tax black hole for same-sex couples - Sep 8, 2008
French system fails to recognise civil partnerships - Aug 11, 2008