THE CONNEXION – LEGAL NOTES – FEB 2015

QUESTION

As regards recent Connexion articles on changes to inheritance law (to begin this year), am I correct in assuming that the changes would not affect a couple like ourselves who spend less than half of the year in our French home and have no intention of becoming French residents? We have a "tontine" clause in the title deeds which should protect the position of the surviving partner but when the surviving partner dies I assume French law will still apply? This should not cause us a problem as things stand at present as we would want our children to inherit jointly.

R.B.

ANSWER

Given that you are UK resident and that your French property is just a holiday home, I confirm it is our current understanding that the EU Succession Regulation will not change how your French estate will be dealt with on the death of the first of you.

The tontine clause will certainly protect the survivor of you as this will result in the survivor being deemed to have been the sole owner of the property from the original date of acquisition and the survivor will have full ownership and control of the property.

This will, in due course, on the death of the survivor of you ensure your children (assuming they are children who are common to your marriage) ultimately inherit the property in equal shares.

The formalities on the first death are also simpler as there is no formal requirement for a Declaration of ownership (une Attestation Immobilière) to be drawn up and lodged with the French Land Registry. This saves time and money! It is still necessary however for a French Tax Declaration to be prepared by a French notary and lodged with the French Tax Authority even if there is no inheritance tax payable which would be the case if the property is owned by you as a married couple.

Just one note of caution however – please do check that your French title deed (l’acte de vente) does indeed contain a tontine provision as in the past we have had clients who came to us telling us they had asked for it to be included in their purchase deed but when we examined the deed there was no such provision and the clients simply owned “en indivision” which equates to owning as tenants in common under English & Welsh law.

The tontine provision will sometimes be identifiable in the title deed under the heading

“Pacte tontinier” however more often there is no actual reference to the word “tontine” and the clause is included by reference to the following words “une clause d’accroissement”.

Barbara Heslop

Heslop& Platt

15 January 2015