A taboo subject in France, the subject of inheritance and the inheritance costs it causes is nevertheless major. In fact, they brought in nearly 8 billion euros to the State in 2010, according to a recent article in Pleine vie on the subject.
Fortunately, there are legal methods that can alleviate or avoid these charges altogether. If we do it on time and in the right way. To begin with, if you are preparing your will, know that you can avoid certain taxes by passing on your inheritance during your lifetime. But for this, it must be done at a specific age.
At the time of inheritance, the calculation of the amount of inheritance tax is based on the value of the net assets transferred to each heir after the deduction of debts, recalls the article on the Pleine vie website. To know precisely how much the State deducts from an inheritance, you must carry out a calculation which is based on the distribution of the assets according to the rules of the Civil Code and on the reductions of the inheritance according to the relationship of the beneficiary with the deceased, explains the site.
But rest assured, the inheritance tax scale does not apply to all inheritances. Inheritances whose amount is less than that of the reduction are excluded from this calculation. It is a scale in brackets and the tax rate is between 5 and 45% depending on the value of the net assets transferred.
If you want to prepare your inheritance, at what age should you take care of it?
The sooner the better to pass on your assets to ensure a smooth succession to heirs. But not too soon. Indeed, by getting started relatively early, you will benefit from tax advantages, especially if the heirs respect certain deadlines. Thus, it is recommended to take measures for your estate before reaching the age of 70, indicates the association of notaries.
This age not only corresponds to retirement, but in addition, the value of the bare ownership which must revert to the children is set at 60% according to article 669 of the General Tax Code.
The French, however, lack anticipation when it comes to succession. But, if you wish to bequeath your assets during your lifetime, there are also two mechanisms that will prevent your children from paying inheritance fees after your death.
Here’s how to escape the cold.
You can buy a property, transfer bare ownership to your offspring and reserve usufruct for your entire life. This procedure is very advantageous, because it allows you to continue to enjoy your property as if it still belonged to you. After your death, the children will become the sole owners of the property and will therefore not pay any inheritance tax.
In this case, the parents give money to their children during their lifetime and, together, they buy the property in division of ownership. Result, as in the case of bare ownership, usufructuary and beneficiaries become bare owners. Concretely: upon the death of the donor parents, the act of dismemberment is canceled and the children appearing in the will become full owners. The latter will therefore not have to pay inheritance tax, because the property belonged to them before the death of the donors.
Whatever procedure you choose to adopt, it will in every way ease the burden on your children at this already difficult time.