“it is not necessary for the couple to predict infection for the children”

How much tax does the tax authorities deduct from an inheritance? MoneyVox offers you a series of 3 practical cases on inheritance tax, produced by Maître Patrice Bonduelle, notary in Paris. Here is the example of a couple who have an inheritance of 440,000 euros. Section 1.

The French are resistant to inheritance rights. However, according to the Inequality Observatory, only 13% of inheritances are greater than 100,000 euros and therefore taxable. The vast majority are therefore totally exempt from taxation. So should we revise the current system? During the presidential campaign, the issue of inheritance, transfer of property and taxation of them occupied a not insignificant part of the debates.

At the request of MoneyVox, Maître Patrice Bonduelle, a notary in Paris, conducted several practical cases. A way to present the options that are for you and to make the right tax choices when the situation arises.

The situation: a family with three children

The parents are married under the legal regime of the society and their assets consist of 50,000 euros in cashincluding 20,000 on life insurance (designating the three children as beneficiaries) and three real estate assets:

  • a house in Poitiers worth 250,000 euros;
  • two apartments in the same town worth 70,000 euros each and set for studio rental.

If the man dies …

In the case of inheritance, the surviving spouse receives in accordance with the rules of the Marriage Act half of the commonsexcl. life insurance, ie. € 210,000 [(30 000 + 250 000 + 70 000 +70 000) / 2].

The longest-living spouse will also have an option on the other half of the estate between ¼ in full ownership or the total right of use. We estimate here that the option relates to ¼ in full ownership, ie 52,500 euros (¼ of 210,000), for a total of 262,500 euros. The surviving spouse will be exempt from inheritance tax on the amount received.

The three children get ¾ from the estate i.e. 157,500 euros in total (¾ of 210,000) and 52,500 euros each. Following the application of the 100,000 euro allowance between parents and children under Article 779 of the General Tax Code (CGI), the children also do not pay inheritance tax.

What about life insurance?

With regard to the 20,000 euros in life insurance, where the premiums have been paid before the insured’s 70 years, they are not part of the estate’s assets. Each of the three children will receive € 6,667, to which the € 152,500 reduction will apply (Article 990 I of the CGI). These amounts are also exempt from tax.

The taxation of life insurance in case of death

By donation before the death of one of the spouses ….

In the case of transfer of all property with the exception of the main residence, it must 30,000 euros in cash is distributed equally, so the three children get 10,000 euros each. The cash donation allowance of EUR 31,865 (Article 790 G of the CGI) allows children to be exempted from gift tax on this amount.

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With regard to the two apartments of 70,000 euros each (a total of 140,000 euros), the donation is also egalitarian and relates, in terms of the amounts transferred, to full ownership of the property. Each child therefore receives 46,667 euros.

The specific reduction for each child (100,000 euros) makes it possible not to pay gift taxes on this transfer. The transfer of all the property with the exception of the main residence was made tax-free.

At the opening of the succession, the surviving spouse receives half of the Community assets in accordance with the rules of the legal marriage scheme. At the date of the death of one of the spouses, the community consisted of the main residence (250,000 euros). Here the children will again be exempt from inheritance tax.

Conclusion

” In this situation, it is not necessary for the couple to anticipate a transfer children unless they want to help them during their lifetime or if they believe their wealth will continue to increase over time, ”explains Maître Bonduelle.

Inheritance tax: calculation, deduction, payment …

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