A brief guide to how marriage and ‘Pacs’ affects finances in France
How you live with a partner, whether informally (concubinage) or in a civil partnership (Pacs) or in a marriage changes elements for tax and inheritance
Connexion summarises key points to how you live with a partner effects tax and inheritance statuses in France
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Ownership of property
The default regime for a French marriage (this can be changed via a notaire) is communauté réduite aux acquêts – property acquired during the marriage is jointly owned; that acquired before it is owned separately.
A Pacs (or UK civil partnership) couple comes under séparation des biens – each owns their own property separately.
For concubins each is legally treated as celibate for most tax matters. An exception is property wealth tax (IFI) where possessions of long-term partners who live together are assessed jointly.
UK marriages are deemed to fall under séparation des biens until 10 years’ residence in France after which future acquisitions fall under the French regime.
Income tax
Concubins fill in separate tax declarations. Pacsed or married couples declare jointly and this can bring significant tax savings for partners with unequal incomes.
This is because joint income is reduced by a mechanism known as quotient familial (‘parts’) before tax bands/rates are applied. The resulting amount is then multiplied by up by the number of ‘parts’.
Inheritance
In a marriage the survivor has an automatic right to at least part of their estate and anything inherited is exempt from inheritance tax; the same applies in the case of a Pacs if the partner is listed in a will. A concubin is taxed on any inheritance bequeathed to them at 60% after an allowance of €1,594.
Gifts
French gift tax is, in theory, chargeable on all significant gifts and is especially important in the case of real estate.
Married or pacsed couples benefit from an €80,724 allowance before taxation at rising banded rates. Concubins benefit from no allowance and taxation is at 60%.
Our new French tax guide
For more about French income tax and how to declare this spring (2020 revenue), see our dedicated French Income Tax 2021 helpguide (€12.50 for a digital copy or €15 +P&P for a print + digital copy).
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