Handing over our French house to our children

CherylD_3

We are considering 'donating' our French property to our children, as we can do under French law, as this will then remove it from our estate. We want their future children to be able to enjoy it as much as they have in the past 30 years and they want this too. They are both happily married but our one concern is that if either were to divorce in the future their spouses would be able to claim a share of the property. The Notaire tells us that this will not happen because under french law the property would belong only to our son & daughter. However I am not sure if the English courts would take the value of it as an asset into account in any divorce settlement. Can anyone tell me?

We have discussed this openly as a family & our son and daughter in law say they would never try to make claim on the house but of course in traumatic times this might not be the case. I am sure they would sign a document to this effect now if such a thing had any legality. Does anyone know if this is possible

Savvy_Sue

TBH, with a question like this I think you need to consult, and possibly pay, a UK lawyer. You may even find that the answer is "It depends!"

carolan78

Could the house not be put in a trustee for any Grandchildren and future Grandchildren that way it isn't an asset for your children.

Paparika

CherylD wrote: »

We are considering 'donating' our French property to our children, as we can do under French law, as this will then remove it from our estate. We want their future children to be able to enjoy it as much as they have in the past 30 years and they want this too. They are both happily married but our one concern is that if either were to divorce in the future their spouses would be able to claim a share of the property. The Notaire tells us that this will not happen because under french law the property would belong only to our son & daughter. However I am not sure if the English courts would take the value of it as an asset into account in any divorce settlement. Can anyone tell me?

We have discussed this openly as a family & our son and daughter in law say they would never try to make claim on the house but of course in traumatic times this might not be the case. I am sure they would sign a document to this effect now if such a thing had any legality. Does anyone know if this is possible

My parents live in France, and although it's their home, they have had to name me as their child, if anything happens to either of them, the other is not allowed to sell the house without my permission, French law so they didn't have a choice.

I think you need to speak to speak to expats forums over there, each area has different rules..

Filey

CherylD wrote: »

We are considering 'donating' our French property to our children, as we can do under French law, as this will then remove it from our estate.


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You need expert advice on this. It depends partly under what 'regime' you bought the house initially. French law does always favour the children of the marriage but there may still be gift tax to take into consideration. The Notaire should tell you about this if you ask him. If you don't specifically ask it might not be mentioned until you are presented with the bill.

Could be wrong but in my experience the French only answer the specific question you ask. Not sure whether there would be capital gains tax as it is not your principal residence and presumably you are not tax resident in France. Although having owned it for a long time might negate that.

Best plan is to ask the Notaire to tell you ALL the taxes that would be payable on donation. I wanted to 'donate' my half of our French house to my now (but not then) ex husband after we had separated and I had moved back to the UK. I would have had capital gains tax to pay. Subsequently we divorced and had a Consent Order in a UK court saying I should make over my half of the French house to him. I still had CGT to pay but only on half the house, whereas if we were still married I would have had to pay it on the whole house.

Leave no question unasked when it comes to French law and taxes. With regard to UK law, it might be that you need to survive a further seven years for the French house to be fully excluded from your estate, going down on a sliding scale. That's if it would be included in the first place.

AFAIK there is no charge for going to a Notaire and asking for the facts on taxes and inheritance and property law, so you could always ask more than one if you need further confirmation. Should you need it I can give you the details of a UK barrister practicing in France specialising in property law, but it's not free.

Funny how these things seem so straightforward when you first think of them but then problems rear their ugly heads.

CherylD_3

carolan78 wrote: »

Could the house not be put in a trustee for any Grandchildren and future Grandchildren that way it isn't an asset for your children.

Apparently Trusts are not legal in France