IMPORTANT: the information contained in this article is simply intended to shed light on the main principles of the taxation of international inheritances and gifts. It does not constitute guidance for your specific case. Consult a professional, such as a tax lawyer, to assist you in your specific situation.

In the case of a foreign inheritance or gift, what returns must be filed?

What are the risks of not doing so correctly?

In what situations is one subject to inheritance tax or gift tax (droits de succession ou de donation)?

What are the lexical and legal differences between these two terms?

Note: the information is deliberately limited to the case of French tax residents.

Reminders of terminology and definitions relating to international inheritances

International law uses specific terms well known to tax lawyers, which it is important to highlight. For example…

Tax domicile and place of residence: what are the differences?

Tax domicile (domicile fiscal) is a term used in a tax context, and refers to the State in which you may be taxed on all of your worldwide income.

The place of residence refers to the place where you live; it is sometimes different from the tax domicile.

Indeed, a person’s French tax domicile is defined by three criteria:

– Their household (foyer fiscal: children, spouse, dependant) is in France

– They carry on a professional activity in France, whether salaried or not, as their main activity (unless they can show that it is carried on there as an ancillary activity).

– Their « centre of economic interests » (intérêts majeurs) is in the tax territory: shares, chairmanship/management of a company, interests, rental property and the income derived from it…
These criteria are alternative: it is sufficient for one of them to be met for a person to be tax-domiciled in France, subject to the tax treaties.

If one of these criteria is met, you will be considered as having your domicile in France.

If you are considered as tax-domiciled both in France and in another State, international treaties, where they exist, will settle this point and grant tax domicile (« tax residence ») to only one of the two States.

Please note, this article deals with inheritances and gifts, and not with income taxation.

In this case, France must therefore be bound to another State by a treaty on inheritances or gifts. There are relatively few treaties on inheritances and even fewer on gifts.

In the absence of a treaty, the taxpayer risks being taxed twice on the same inheritance.

In that case, taxation in France will in principle be reduced by the possibility, in certain cases, of offsetting foreign taxes against the taxes due in France.

Gift, inheritance and estate: notions not to be confused

Although they all refer to a transfer of assets, these three words are completely different from a tax and terminological standpoint.

To begin with, a gift (donation) involves living parties, whereas the other two arise in the context of a death.

The estate (succession) encompasses the entire inheritance process. The succession begins on death and ends when each party has received their share of the inheritance. The inheritance (héritage) therefore refers to the assets bequeathed by a deceased person.

A few words on international treaties

To facilitate human mobility and financial exchanges, but also to regulate them and protect each State’s tax revenue, agreements are signed between countries. The first were signed after the First World War. Globalisation was then in its infancy. Today, France is bound by more than 120 tax treaties around the world.

However, while there are numerous treaties relating to income, there are far fewer relating to inheritance and even fewer relating to gifts.

Which inheritances must be declared and how?

Three situations require an individual to pay inheritance tax in France:

– the deceased was a French tax resident

OR

– The bequeathed assets are located in French territory. By assets, we mean bank accounts, houses, furniture, cars, but also livestock or a business’s goods…

OR

– The deceased was not a French tax resident but the heir was at the time of death and for at least 6 of the last 10 years

Declaring a foreign inheritance: what are the steps?

In concrete terms, an inheritance begins with the death of a relative, somewhere in the world.

The heir has twelve months from the date of death (where the death occurred outside metropolitan France) to file the inheritance tax return (déclaration de succession).

International inheritance: which forms must be submitted to the tax authorities?

There are several forms relating to the inheritance of assets:

1 – Form 2705-SD

2 – Form 2705-S-SD

3 – If your relative held a life insurance policy: return 2705-A-SD

4 – Form 2740-SD to determine the amount of gratuitous transfer duties (droits de mutation à titre gratuit) paid outside France that may be offset against the tax payable in France

5 – where there is real estate: form 2709 for each property located in districts other than that of the domicile;

Nor should you forget to declare each year any foreign accounts you may have inherited: on form 3916.

You will also need to tick box 8UU of return 2042 each year.

Please note: before deciding whether or not to accept this inheritance, bear in mind that debts and various expenses will be deducted from it. If the deceased’s money is not sufficient, the debt is in principle transferred to the heirs. The advice of an expert in international inheritance law seems indispensable on these aspects.

What you risk by not declaring anything

Tax penalties (surcharges) and late-payment interest, which vary depending on your case.

Moreover, you will often feel stuck with regard to any repatriation of the funds to France, fearing that you will be « unmasked » by the tax authorities.

The funds will very often remain « stuck » abroad, as you may fear that repatriating them to France will trigger a tax audit.

I have inherited: how do I know which territory my inheritance falls under?

To put it simply, there are two cases:

1- The deceased was tax-domiciled in a country that has signed a Treaty on inheritances with France: this agreement will explain whether or not you must be taxed in France, and under what conditions
2- The deceased was not tax-domiciled in a country that has signed a Treaty on inheritances with France: you pay the taxes due (possibly, depending on the rules of the country concerned) in both States. You may be entitled to a credit in France for taxes paid abroad.

Consult the list of treaties here. States that have signed a treaty with France are indicated by « S » (succession, inheritance) and « DO » (donation, gift).

Please note, for the treaty to be applicable, it seems that inheritance tax must have been paid abroad. Indeed, the purpose of treaties is to avoid double taxation. In the absence of foreign tax, there is no double taxation, and the treaty therefore seems inapplicable.

Case 1. Inheritances between France and the territory of death are governed by a treaty

In this case, the treaty must be consulted to determine which rules apply.

In general, assets located in the deceased’s State will be taxable only in that State. Please note, the treaty in question must be read with great care, as small details of wording can have very significant consequences.

Furthermore, for the treaty to be applicable, it might in principle seem that inheritance tax must have been paid abroad. Many States have very high tax thresholds, so that very often no tax has been paid abroad. In such a case, the treaty seems inapplicable and we fall back on purely French rules, which will generally result in the entire estate being taxed in France, wherever it is located.

Case 2. No Treaty on inheritances exists between France and the territory concerned

You are then subject to French taxation, described below.

Overview of inheritance tax (amounts unchanged since 2020, still applicable in 2026):

Method of calculating inheritance tax in France

Inheritance tax is calculated on the net assets of the inheritance, that is to say what remains after deducting any debts. Various allowances and benefits are added depending on whether you are a direct heir (child or grandchildren depending on the deaths), a spouse, a nephew/niece or a person unrelated to the deceased.

There are exemptions under certain conditions and to certain extents:

– transfers between spouses and partners
– gifts to a non-profit association
– inheritance between brother and sister: if the inheriting brother or sister is single, widowed, divorced or legally separated, aged over 50 or suffering from an infirmity preventing them from working, and lived with the deceased during the 5 years preceding the death.
– the beneficiary is a dependent person with a physical or mental disability to such a degree that they cannot receive an education or carry out everyday tasks unaided.

A question: how much will the tax authorities take from my inheritance?

The rates applied will differ depending on whether you are a relative in the direct line, a brother or sister, or an uncle and nephew.

Here are the scales applicable in 2026 (unchanged since 2020):

Inheritance tax: specific cases of exemption and allowances

Brothers and sisters are – in the same way as spouses and PACS partners – exempt from inheritance tax if:

• they are single (widowed, divorced…),
• they are infirm or aged over 50,
• they lived with the deceased for at least 5 years before the death.

An heir with a physical or mental disability benefits from an additional allowance of €159,325.

In the case of a prior gift made less than 15 years earlier, the allowance and the inheritance tax scale are calculated after adding back the gift.

Calculation of inheritance tax: scale

The scale is the percentage of inheritance tax that the heir must pay after the allowance.

For deaths occurring on or after 31 July 2011, the scale depends, as follows, on the degree of kinship between the heir and the deceased.

What about international gifts? Returns and formalities with the tax authorities

Here again, it is first necessary to find out whether a treaty on gifts exists with the State concerned.

France has signed very few.

Consult the list of treaties here.

If a treaty on gifts exists, it must be consulted to determine whether or not the gift is taxable in France.

If no treaty on gifts exists, French rules apply in full.

In the case of a gift to a descendant (child, grandson…), the sums transferred may be exempt from duties up to €31,865 every 15 years. The donee (the person receiving the gift) must be of age, and the donor must be under 80 years of age.

Please note! You have one month to declare the gift and claim this exemption. Otherwise, you will not be able to benefit from it.

Furthermore, other allowances may apply. They depend on the family relationship between the donor and the donee.

Gift duties between spouses and PACS partners

Inheritance and gift duties between brothers and sisters

Inheritance and gift duties between relatives up to and including the 4th degree

*The great-uncles and great-aunts must have no descendants. The donee’s parent, who is the donor’s nephew or niece, must be deceased.

Inheritance and gift duties to a third party and to relatives beyond the 4^th degree

IMPORTANT: the information contained in this article is simply intended to shed light on the main principles of the taxation of international inheritances and gifts.

It does not constitute guidance for your specific case. Consult a professional to assist you in your specific situation.

Our tax law firm can assist you.