France is widely known for its strict inheritance tax rules, especially once inheritance moves beyond the direct parent–child line. The system does not focus solely on the value of what is passed on. It also closely examines how closely the heir is related to the deceased.
Each beneficiary receives a tax-free allowance, after which progressive rates apply to the remaining amount. As family ties become more distant, allowances shrink and tax rates climb. Siblings fall into one of the most heavily taxed categories, often facing substantial bills.
Standard allowances and tax rates by relationship
- Children / parents: €100,000 allowance each, taxed from 5% to 45%
- Brothers / sisters: €15,932 allowance each, taxed at 35% then 45%
- Nieces / nephews: €7,967 allowance each, taxed at 55%
- Other heirs: €1,594 allowance each, taxed at 60%
For brothers and sisters, anything above €15,932 is taxed at 35% up to a low threshold, then jumps to 45%. In practical terms, inheriting even a modest property can trigger tens of thousands of euros in tax.
Under the usual framework, siblings inheriting from one another can face rates comparable to the highest income tax brackets in France.
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The little-known sibling exemption that cancels the tax
Buried deep in French tax law is a provision that radically changes this outcome for a limited group of people. Article 796-0 ter of the Code général des impôts allows a brother or sister to inherit completely tax-free, provided they meet three strict conditions.
Condition one: five years of continuous cohabitation
The first requirement concerns shared living arrangements. The surviving sibling must have lived continuously in the same home as the deceased for the five years immediately before the death.
- The property must be the main residence of both siblings
- The five-year period must be unbroken
- Proof usually includes utility bills, tax notices, and housing documents
This rule is designed to protect siblings who genuinely shared daily life and expenses, not those linked only by occasional stays or shared ownership of a secondary property.
Condition two: marital status at the time of death
The second test relates to personal status. On the date of death, the surviving sibling must be:
- Single
- Divorced
- Widowed
- Legally separated under French law
Anyone who is married or in a civil partnership, including a French PACS, is excluded, even if they lived with their brother or sister.
Condition three: age or recognised disability
The final requirement addresses vulnerability. The surviving sibling must either:
- Be over 50 years old, or
- Have a disability preventing any professional activity
This condition focuses on siblings who may struggle to rebuild financial stability after losing a cohabiting family member.
How this exemption changes real outcomes
For those who qualify, the impact is striking. Instead of losing up to 45% of their inheritance, the surviving sibling receives the entire share intact. Property, savings, and personal items transfer without any French inheritance tax.
Introduced as part of a 2007 reform, this measure was designed to protect vulnerable siblings living together. It remains largely unknown, often only discovered during discussions with a notaire after a death.
Two scenarios: taxed heavily or fully exempt
Consider an estate worth €250,000, made up of a flat and savings, left by a woman in her seventies.
Case A: standard taxation applies
Her 48-year-old brother lives nearby but not with her. He inherits under the normal sibling rules. Most of the amount is taxed at 45%, creating a large bill that could even force the sale of the property.
Case B: full exemption applies
Her 55-year-old sister has lived with her for over five years, is divorced, and cannot work due to a recognised disability. She meets all three legal conditions. The entire €250,000 passes tax-free.
The estate value and family bond are identical. The difference lies solely in living arrangements, age, and legal status at the time of death.
Other cases where French inheritance tax is reduced or removed
The sibling exemption is just one of several targeted reliefs within French succession law. With foresight, families can combine different mechanisms to limit the tax burden.
Spouses and PACS partners: automatic zero tax
Married couples and partners in a French PACS benefit from a clear rule. When one partner dies, the survivor pays no inheritance tax, regardless of the estate’s size.
Additional relief for disabled heirs
An heir officially recognised as disabled receives an extra €159,325 tax-free allowance, on top of the standard allowance linked to their family relationship.
This additional relief can significantly reduce, or even eliminate, inheritance tax in certain cases.
Family cash gifts during lifetime
Separate from inheritance, French law allows tax-efficient cash gifts within families, subject to age and timing rules. Parents, grandparents, and sometimes aunts or uncles can transfer funds under generous exemptions, gradually reducing the future taxable estate.
Transfers of businesses and farms
Entrepreneurs and farmers may rely on schemes such as the pacte Dutreil. When specific commitments are respected, a large share of a business or agricultural land can be shielded from inheritance tax, helping keep it within the family.
Why this matters for British and American families in France
Many UK and US nationals own French property with siblings or choose to live together later in life. French inheritance tax rules usually apply to French-based assets, regardless of nationality.
A British woman sharing a home near Bordeaux with her older disabled brother could unknowingly meet the conditions for the sibling exemption. Without preparation, the brother might face an unaffordable tax bill. With documented cohabitation and proper advice, that tax could disappear entirely.
Key French terms to recognise
- Abattement: the tax-free allowance granted to each heir
- Part successorale: the individual share of the estate
- Droits de succession: inheritance tax
- Notaire: the public official handling estates and succession matters
Planning ahead with professional advice
Anyone sharing a household with a sibling in France may benefit from reviewing whether their situation already meets, or could meet, the three legal conditions. Proof of cohabitation, clarity around marital status, and documentation of a recognised disability can all prove decisive.
Simulations carried out with a notaire or cross-border tax adviser often clarify the stakes. Comparing standard sibling taxation with the full exemption can reveal major differences, and professionals can suggest lifetime gifts or ownership adjustments that keep more wealth within the family rather than lost to tax.
