The announcement that the French IHT threshold is increasing from €50,000 to €150,000 per parent for...
The announcement that the French IHT threshold is increasing from €50,000 to €150,000 per parent for each child has had a positive response from both life offices and financial advisers alike.
Kevin Morgan, managing director of IFA firm Consilium Financial Services, said: "Clearly the rise is to be welcomed. However most people move to France for lifestyle reasons so I do not believe it will initiate a big exodus there."
Brendan Harper, technical services manager at Friends Provident International, said the threshold increase hadn't come as a big surprise because Sarkozy was elected due to his determination to reform the tax and economic environment of France.
He said the announcement was good for Brits who own property in France and suggested the move was likely to stimulate the French property market further since first-time buyers have recently been granted mortgage-interest relief.
Paul Wilcox, IHT planning specialist at the Way Group, said Brits have had to be careful to avoid paying IHT in both France and the UK in the past but the changes have now made it less likely this would happen. He also said French IHT was now much more in line with the situation in the UK.
The French IHT system is different to the UK in that each beneficiary is granted a nil rate band according to their relation to the deceased. In contrast, in the UK it is the estate of the deceased that has a nil rate band and the number of beneficiaries is largely irrelevant. Wilcox pointed out that if French families have three children, they are now on the equivalent IHT level as the UK because they are allowed £100,000 per parent for each child.
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