US citizens in France face a two-level inheritance tax exposure that French nationals do not. France levies droits de succession on assets passing at death, assessed per heir after personal abatements. The United States separately levies estate tax on the worldwide gross estate of every US citizen, regardless of residence. Both systems apply simultaneously to a US citizen who dies domiciled in France.
The two countries have a dedicated treaty to address this overlap: the US–France Convention with Respect to Taxes on Estates, Inheritances and Gifts, signed in 1978 and amended by Protocols in 1984 and 2009. This is a completely separate treaty from the 1994 US–France income tax treaty. The income tax treaty does not cover inheritance or gift taxes.
French Droits de Succession — Structure
How the Tax Is Assessed
France taxes each heir on the value of their individual share, not the estate as a whole. There is no entity-level estate tax. Each heir pays droits de succession on their net received share after deducting their personal abatement. A notaire (French notary) is legally required to oversee succession procedures for estates with real property or assets above a de minimis threshold.
This structure differs fundamentally from the US system, which levies estate tax on the gross estate before distribution. The French per-heir structure permits abatement stacking across multiple beneficiaries; the US system applies a single unified credit against the total gross estate.
Territorial Scope
A French tax resident’s worldwide assets are subject to French droits de succession at death. Non-residents with French-situs assets (real property in France, French securities, French bank accounts) owe French succession tax on those assets. In addition, Art. 750 ter CGI extends French succession tax to a non-resident decedent’s foreign assets when the heir has been a French tax resident for at least 6 of the 10 years preceding the succession. A US-based parent whose adult child lives in France may find French droits de succession applied to the child’s inheritance of non-French assets under this rule.
Abatements per Heir
Abatements are deducted from each heir’s gross share before applying the rate schedule. They are personal to each heir and do not affect other heirs’ calculations. Statutory basis: CGI Art. 779.
| Relationship to Decedent | Abatement |
|---|---|
| Child (per parent, per child) | €100,000 |
| Spouse or PACS partner | Fully exempt (CGI Art. 796-0 bis) |
| Sibling (frère ou sœur) | €15,932 |
| Niece or nephew | €7,967 |
| Grandchild (standard) | €1,594 |
| Grandchild inheriting by representation from a predeceased parent | Up to €100,000 (divided among the grandchildren inheriting that parent’s share) |
| Handicapped heir (infirme) — any relationship | Additional €159,325, stackable with the relationship abatement |
| All other heirs (no family relationship) | €1,594 |
Concubins: An unmarried partner without a PACS receives only the €1,594 abatement and is taxed at 60%. The full spousal exemption requires legal marriage or a registered PACS.
Inheritance Tax Rate Schedules
All rates apply to the taxable amount after the heir’s abatement. Statutory basis: CGI Art. 777.
Direct Line (En Ligne Directe)
Applies to transmissions between parents and children (including adopted), grandparents and grandchildren, and children and parents.
| Taxable Amount After Abatement | Rate |
|---|---|
| Up to €8,072 | 5% |
| €8,073 to €12,109 | 10% |
| €12,110 to €15,932 | 15% |
| €15,933 to €552,324 | 20% |
| €552,325 to €902,838 | 30% |
| €902,839 to €1,805,677 | 40% |
| Above €1,805,677 | 45% |
Siblings
| Taxable Amount After €15,932 Abatement | Rate |
|---|---|
| Up to €24,430 | 35% |
| Above €24,430 | 45% |
Other Relatives to the 4th Degree
Rate: 55% (after the applicable relationship abatement).
Non-Relatives and Concubins
Rate: 60% (after €1,594 abatement). Applies to friends, unmarried partners without a PACS, and all others.
French Gift Tax — Droits de Donation
Gift tax uses the same rate schedules and the same abatements as succession tax. There is no separate lifetime rate schedule that is more favorable than the succession rate. The benefit of lifetime giving is the ability to apply the abatement multiple times over a 15-year period, not a reduced rate.
The 15-Year Rechargeable Abatement
Abatements reset every 15 years under CGI Art. 784. A parent can give a child up to €100,000 gift-tax-free today; after 15 years, the full €100,000 abatement is available again for another gift. Gifts made more than 15 years before the donor’s death do not reduce the heir’s inheritance abatement. Regular inter vivos giving at 15-year intervals is the primary French estate planning tool for direct-line transmissions.
Forced Heirship — Réserve Héréditaire
French civil law mandates a minimum share of the estate for the decedent’s children. This mandatory share is the réserve héréditaire. The balance, the quotité disponible, may be disposed of freely by will or inter vivos gift.
| Number of Children | Réserve (mandatory) | Quotité Disponible (freely disposable) |
|---|---|---|
| 1 child | 1/2 of the estate | 1/2 |
| 2 children | 2/3 of the estate | 1/3 |
| 3 or more children | 3/4 of the estate | 1/4 |
Statutory basis: Code civil Art. 912–930.
Brussels IV and Its Limits for US Citizens
Under EU Succession Regulation No. 650/2012 (Brussels IV), EU residents may elect the law of their nationality to govern their succession. A US citizen residing in France may elect US law.
Important: French courts treat the réserve héréditaire as an overriding mandatory provision of French private international law. Courts may apply the réserve regardless of the elected law, particularly for French-situs assets. A US citizen in France cannot reliably use the Brussels IV election to disinherit children under French law for assets located in France. The legal position is evolving and has not been settled definitively by French case law. Estate planning involving potential réserve conflicts requires advice from a specialist with dual US–French legal qualification. Find a Specialist.
US–France Estate and Gift Tax Treaty (1978, as Amended)
The Correct Treaty
The applicable treaty for estate and gift tax double taxation relief is the Convention between the Government of the United States of America and the Government of the French Republic with Respect to Taxes on Estates, Inheritances and Gifts, signed November 24, 1978, amended by Protocols in 1984 and 2009. It entered into force as last amended on December 21, 2009.
The 1994 US–France income tax treaty explicitly excludes estate and gift taxes from its scope. The two treaties are entirely separate documents. Any article or advice that cites the 1994 treaty in the context of inheritance is citing the wrong instrument.
Credit Mechanism
The 1978 treaty allocates taxing rights between the two countries and provides a credit mechanism:
- The domiciliary state (the US, for US citizens, on their worldwide estate) must allow a credit for estate tax paid to the situs state on assets located in that situs state, up to the US tax attributable to those assets.
- The situs state (France, for French-situs assets) must allow a credit for US estate tax paid on French-situs assets, up to the French tax attributable to those assets.
For a US citizen dying domiciled in France with French real estate: France levies droits de succession on the real estate. The US levies estate tax on the worldwide estate, including the French property, but allows a credit for the French droits de succession paid on that property. Where the French rate on the property exceeds the US marginal estate tax rate, US estate tax on the French property is typically eliminated. Where the French rate is lower, residual US estate tax may remain.
US Citizens Are Not Exempt
The 1978 treaty preserves the US right to tax the worldwide estate of US citizens. This is the estate and gift tax equivalent of the saving clause in the income tax treaty. A US citizen domiciled in France remains fully subject to US estate tax on their worldwide assets; the treaty then mitigates (but does not guarantee full elimination of) double taxation through the credit mechanism.
US Estate Tax for Americans in France
US estate tax under IRC §2001 applies to the worldwide gross estate of every US citizen at death, regardless of residence or domicile.
Unified Credit (TCJA Uncertainty)
The Tax Cuts and Jobs Act of 2017 significantly increased the unified credit, providing an effective exemption of approximately $13.61 million per individual for 2024. These provisions were scheduled to sunset after December 31, 2025, which would have reduced the exemption to approximately half that amount.
Verify before relying on any specific figure: The applicable US estate tax exemption for deaths occurring in 2026 and beyond depends on whether Congress acted to extend, modify, or make permanent the TCJA provisions before the sunset date. Confirm the current applicable exemption with a US-qualified tax professional before any estate planning analysis.
A surviving spouse may elect to use the deceased spouse’s unused exemption (portability election) by filing a timely Form 706 estate tax return, even if no estate tax is owed. Given the exemption uncertainty, this election is worth considering even for estates below the current threshold.
Foreign Death Tax Credit (IRC §2014)
The US estate tax return (Form 706) allows a credit for foreign death taxes paid on assets also included in the US gross estate, under IRC §2014. The credit reduces US estate tax dollar-for-dollar for French droits de succession paid on the same assets. The credit is limited to the lesser of the foreign tax paid and the US estate tax attributable to the same assets. Excess French tax (where the French rate exceeds the US marginal rate) is not creditable.
Form 3520 — Reporting Foreign Inheritances and Gifts
Who Must File
A US person who receives a gift or bequest from a foreign person exceeding $100,000 in aggregate within a calendar year must report it on Form 3520, Part IV. Key points:
- Form 3520 is an information report only. Foreign inheritances are excluded from US gross income under IRC §102. No US income tax is owed on the inheritance itself as a result of this filing.
- The $100,000 threshold is cumulative across all gifts and bequests received from the same foreign person (or related foreign persons) within the calendar year.
- French droits de succession paid by the heir does not reduce the reportable amount. The full gross amount received (before French tax) is reportable.
- A US person receiving a French inheritance who pays French succession tax and files Form 3520 has fulfilled both obligations separately. The French tax payment does not satisfy the US reporting requirement.
Penalties
Failure to file Form 3520, Part IV when required carries a penalty of 5% of the unreported amount per month, to a maximum of 25%. On a $500,000 inheritance, the maximum penalty is $125,000. The IRS has actively pursued these penalties. The filing obligation is triggered by the size of the inheritance, not by any US tax liability.
Due Date
Form 3520 is filed with the individual’s Form 1040, due April 15 (June 15 for taxpayers living and working abroad), with extension to October 15 available via Form 4868.
Assurance-Vie and French Succession Planning
Assurance-vie is the primary succession planning tool in France precisely because the death benefit paid to designated beneficiaries passes outside the estate and outside the réserve héréditaire calculation (within statutory limits). The favorable tax treatment under CGI Art. 990 I (€152,500 per-beneficiary exemption for premiums paid before age 70) and Art. 757 B (€30,500 total premium exemption for post-age-70 contributions) reduces or eliminates French droits de succession on the policy proceeds.
For US citizens, this French succession benefit does not extend to US estate tax. Assurance-vie policy proceeds where the decedent held incidents of ownership are includable in the US gross estate under IRC §2042. The French favorable treatment reduces French tax only. In addition, assurance-vie holdings may create PFIC obligations during the accumulation phase. See Assurance-Vie for US Citizens for the full treatment.
Technical References
French droits de succession rate schedules are in CGI Art. 777. Abatements per heir are in CGI Art. 779. The full spouse/PACS exemption is in CGI Art. 796-0 bis. The 15-year abatement reset rule is in CGI Art. 784. The territorial scope extension to non-resident estates with French-resident heirs is in CGI Art. 750 ter. The réserve héréditaire is governed by Code civil Art. 912–930. The Brussels IV nationality election is under EU Succession Regulation No. 650/2012. The applicable estate and gift tax treaty is the 1978 Convention as amended by Protocols of 1984 and 2009 (IRS treaty document page for France). US estate tax is in IRC §2001. The unified credit is in IRC §2010. The foreign death tax credit on Form 706 is in IRC §2014. The income exclusion for foreign inheritances is in IRC §102. Life insurance inclusion in the gross estate is in IRC §2042. Form 3520 Part IV reporting obligations are in IRC §6039F and the Form 3520 instructions. The Pacte Dutreil business asset exemption (75% reduction) is in CGI Art. 787 B and 787 C.
Frequently Asked Questions
Do US citizens living in France owe French inheritance tax on their worldwide estate?
Yes. A US citizen who is a French tax resident at death is subject to French droits de succession on their worldwide assets, assessed at the heir level after each heir’s personal abatement. US citizens outside France whose estates include French-situs assets are also subject to French droits de succession on those assets.
Is there a US–France estate tax treaty?
Yes, but it is a completely separate document from the 1994 income tax treaty. The applicable treaty is the Convention with Respect to Taxes on Estates, Inheritances and Gifts, signed in 1978 and amended by protocols in 1984 and 2009. The 1994 income tax treaty explicitly excludes estate and gift taxes from its scope. Citing the 1994 treaty in the context of inheritance planning is a factual error.
Does a US citizen owe US tax on a French inheritance they receive?
No. Inheritances are excluded from US gross income under IRC §102. A US person who receives a bequest from a French decedent owes no US income tax on the amount received. However, if the amount exceeds $100,000 in a calendar year, the US person must file Form 3520, Part IV as an information report. Failure to file carries a penalty of 5% of the unreported amount per month, up to 25%.
What is the French inheritance tax abatement for children?
Each child receives a personal abatement of €100,000 per parent under CGI Art. 779. The abatement is applied to that child’s individual share before the rate schedule is applied. A surviving spouse or PACS partner is fully exempt from French droits de succession under CGI Art. 796-0 bis. The abatement for siblings is €15,932; for nieces and nephews, €7,967.
What is the réserve héréditaire and does it apply to US citizens in France?
The réserve héréditaire is the mandatory minimum inheritance share reserved for the decedent’s children under Code civil Art. 912–930. With one child, half the estate is reserved; with two, two-thirds; with three or more, three-quarters. A US citizen may elect US law under Brussels IV, but French courts may still enforce the réserve as an overriding mandatory provision for French-situs assets. The legal position is unsettled and requires specialist advice.
How does the 15-year gift tax reset work in France?
Each heir’s personal abatement resets every 15 years under CGI Art. 784. A parent can give a child up to €100,000 gift-tax-free today; after 15 years, the full abatement is available again. Gifts made more than 15 years before the donor’s death do not reduce the heir’s inheritance abatement. This recharging mechanism is the primary lifetime wealth transfer strategy for direct-line transmissions under French law.
Do unmarried partners inherit free of French succession tax?
No, unless the couple has registered a PACS. The full exemption from droits de succession applies only to legally married spouses and PACS partners under CGI Art. 796-0 bis. A concibin (unmarried partner without a PACS) is taxed at 60% after only a €1,594 abatement. The PACS is a critical legal step for non-married couples in France with estate planning concerns.
Does the US estate tax apply to Americans living in France?
Yes. US estate tax under IRC §2001 applies to the worldwide gross estate of every US citizen at death, regardless of residence. A US citizen who has lived in France for decades with primarily French assets remains fully subject to US estate tax. The 1978 US–France estate and gift tax treaty provides a credit mechanism to mitigate double taxation, but full elimination of double tax is not guaranteed for all asset types and heirs.