The heir-side trap: how living in France can tax an inheritance from Australia
Art.750 ter §2 is the most missed trigger in cross-border estate planning. It fires from the heir's side — not the deceased's — and it reaches every asset in the world.
The heir-side trap: how living in France can tax an inheritance from Australia
Art.750 ter §2 is the most missed trigger in cross-border estate planning. It fires from the heir’s side — not the deceased’s — and it reaches every asset in the world.
A parent dies in Sydney — Australian domicile, Australian assets, Australian will. Their adult child has lived in Paris for 8 years. French succession tax applies to the entire worldwide inheritance received by that child under art.750 ter §2 of the French tax code. No French assets. No French deceased. No French will. Irrelevant. The child’s French residence is the trigger — and it is entirely independent of every other planning decision.
Principle 01 — The art.750 ter §2 rule in full
Art.750 ter of the Code Général des Impôts contains three independent hooks. §2 is the heir-side hook:
The rule: If a beneficiary has been resident in France for at least 6 of the 10 years preceding the year of the gift or inheritance, they are subject to French succession tax on all worldwide assets received — regardless of where the deceased was domiciled, where the assets are located, and what other taxes have already been paid.
The 6-of-10-year count is measured at the date of death, looking back over the preceding decade. Years do not need to be consecutive. A child who spent 3 years in Paris from 2016–2019, then returned for 3 more years from 2021–2024, meets the threshold at a death occurring in 2024.
Principle 02 — The five countries with heir-side worldwide scope
| Country | Trigger | Top rate (direct family) | Top rate (unrelated) |
|---|---|---|---|
| France | 6 of prior 10 years resident | 45% | 60% |
| Germany | Current German resident | 30% | 50% |
| Netherlands | Current Dutch resident | 20% | 40% |
| Belgium | Current Belgian resident | 27%+ | Higher |
| Japan | Japanese domicile or nationality within 10yr | 55% marginal | 55% marginal |
Principle 03 — The taxpayer mismatch: why credit fails
When the estate has already paid UK IHT, Australian CGT, or another estate-level tax, the heir still independently owes French succession tax — and the credit between them is limited. The estate paid the UK or Australian tax; the heir personally owes the French tax. The taxpayers are different people. Standard credit rules requiring the “same taxpayer” to have paid in both countries fail when the primary taxpayers differ.
Principle 04 — The five most dangerous scenarios
- French child of Australian parent: Parent dies in Sydney. Child in Paris for 7 years. Full Australian inheritance subject to French succession tax. Australian executor has no visibility of the French obligation.
- German-resident sibling of UK-domiciled deceased: UK IHT charged on UK estate. German-resident sibling additionally owes German ErbStG on received share.
- French-resident children of Moroccan/Algerian parents: North African assets distributed under Moudawana/Code de la Famille. French art.750 ter §2 applies to worldwide assets received by French-resident children independently.
- Japanese-resident heir of any estate: Japanese-domiciled heir receives share of British, American, or Australian estate. Japanese IHT at up to 55% applies on worldwide assets received.
- Dutch-resident heir receiving family company shares: UK IHT and BPR may eliminate UK charge. Dutch erfbelasting then applies to full value received — no Dutch equivalent of BPR for foreign assets.
The structural failure: Estate plans are drafted in the deceased’s country, by advisers who know the deceased’s situation. The heir’s tax position — which is entirely determined by where the heir lives — is invisible to those advisers. Almost no standard estate plan asks “where do the heirs live?” and then assesses each heir’s country’s rules independently.
Planning triggers — you should be reviewing this if…
- Any intended beneficiary has lived in France, Germany, the Netherlands, Belgium, or Japan for a significant period
- Your estate plan was drafted entirely in your own country without any assessment of your heirs’ countries
- You have French-resident children or grandchildren and your estate contains assets outside France
- You are a UK or Australian executor administering an estate with French-resident beneficiaries
- You are considering moving to France, Germany, or the Netherlands — the heir-side rules will apply to you as a beneficiary of other estates
Frequently Asked Questions
Does France tax inheritance received from another country?
Yes — under art.750 ter §2 of the French tax code, if you have been resident in France for at least 6 of the prior 10 years, French succession tax applies to all worldwide assets you receive as a beneficiary. This applies regardless of where the deceased was domiciled, where the assets are located, and what taxes have already been paid by the estate in another country. Rates: 5–45% for direct family; up to 60% for non-relatives.
How many years do you need to live in France before French inheritance tax applies to foreign assets?
Six years of French residence out of the prior 10 years is the threshold under art.750 ter §2. The years do not need to be consecutive — they are counted over the 10-year period preceding the death. If you have been French-resident for a total of 6 years in the decade before a death occurs, French succession tax applies to all worldwide assets you receive from that estate, regardless of where the deceased was domiciled or where the assets are located.
Does Germany have the same heir-side rule as France?
Yes — German-resident heirs are subject to German ErbStG (inheritance tax) on worldwide assets received, regardless of where the deceased was domiciled or where the assets are sited. Unlike France’s 6-of-10-year threshold, current German residence is sufficient. The Netherlands and Belgium operate equivalent heir-side rules. Japan applies a 10-year nationality rule that functions similarly.
Can French inheritance tax be credited against tax already paid by the estate?
Only partially. France’s art.784A CGI provides a unilateral credit for foreign tax paid on the same asset at the same event. However, when UK IHT or US estate tax was paid by the estate (a different taxpayer from the heir), and the heir independently owes French succession tax, the credit may not be available because the taxpayers differ. Australian CGT on death and French succession tax are also different types of taxes on different events, making cross-credit particularly unreliable.
I’m moving to France — will I face French inheritance tax on inheritances from my UK parents?
After 6 years of French residence, yes — under art.750 ter §2, you will face French succession tax on any worldwide assets you inherit. If your UK parents have a UK estate that will pay UK IHT, you will additionally owe French succession tax on your received share, subject to limited credit under the 1963 Franco-British DTA (for immovable property) and art.784A CGI (for other assets). This is one of the most important estate planning considerations for UK nationals moving to France.
Does the EU Succession Regulation affect the heir-side French succession tax?
No. EU Succession Regulation 650/2012 governs which succession law determines who inherits and in what proportions. It does not govern tax obligations. French succession tax under art.750 ter §2 applies regardless of which succession law governs the estate, regardless of any art.22 nationality law election in the deceased’s will, and regardless of where the estate is administered.
FAQs for educational purposes only. Not legal, tax or financial advice.
Related articles and guides
Ready to map your specific situation?
This article explains the principles. The simulator helps you understand how they apply to your residency, assets, and family structure.