Receiving a house or apartment as an inheritance does not necessarily mean having the money necessary to pay inheritance taxes. It is even one of the main difficulties encountered by families. In France, household assets are largely made up of real estate, while liquidity is often limited.
Consequently, some heirs fear having to quickly sell a family home to pay the tax authorities. A situation all the more delicate as the duties must be paid within the six months following the death when it occurred in France (or one year when it took place abroad), in accordance with article 641 of the General Tax Code.
For Master Véronique Dejean de la Bâtienotary, this situation has become very frequent. “Today, the heritage of the French still consists mainly of housing. This represents the majority of assets and poses a real problem when the surviving spouse is in the home. The heirs cannot sell it and must still pay the duties. » Fortunately, several mechanisms allow inheritance taxes to be financed without immediately selling the property. Deferred payment, split payment, use of a bank loan or use of estate cash: overview of the main solutions.
Inheritance taxes: what solutions to avoid selling your inheritance?
Selling the property remains the most common solution, but it is far from being the only one. Depending on the composition of assets and family situation, several mechanisms can allow heirs to keep the property while respecting their tax obligations.
1. Use estate cash
When an estate includes bank accounts, savings accounts or financial investmentsthese sums can be used to pay all or part of the inheritance tax. “One of the solutions is to pay with the assets of the estate”explains Maître Véronique Dejean de la Bâtie. The notary can then release the financial assets of the deceased in order to remit the rights to the Public Treasury. “We are tax collectors. We will collect the amount of inheritance tax and return it to the Public Treasury. We release financial assets, but always on the instructions of the heirs. »
The notary points out, however, that these liquidities are themselves part of the estate and are therefore taken into account in the calculation of rights. “It’s not a completely royalty-free pocket. » Capital from a life insurance contract can also constitute a source of financing when it benefits from an advantageous tax regime.
2. Request a deferred or split payment
Little known to the general public, the General Tax Code provides for two mechanisms allowing you not to immediately pay the entire inheritance tax: the deferred payment and the split payment. Deferred payment is particularly possible when the heirs receive property in bare ownership or when the surviving spouse benefits from a right to housing. “The children cannot sell the apartment because the spouse is in the accommodation. They can ask the tax authorities to only pay the rights on the death of the spouse”explains Maître Véronique Dejean de la Bâtie. This request must be accompanied by a guarantee, generally a mortgage on the property, as well as the payment of legal interest.
Another possibility: the split paymentwhich allows rights to be staggered over five years maximumin seven installmentswhen the succession includes more than 50% non-liquid assetslike real estate. “These are preferential measures which allow heirs to defer or spread the payment of rights”underlines the notary.
3. Take out a bank loan
Where duties are particularly high, split payment may not be sufficient. “Sometimes five years is not enough at all. At 60%, you have monthly payments of 100,000 euros. It’s huge”illustrious Master Véronique Dejean de la Bâtie. In this case, some heirs choose to contract a bank loan in order to preserve the property. According to the notary, financial institutions generally accept this type of financing. “The banks follow. They take out a mortgage on the property. As the heirs already own part of the heritage, this reassures them. »
4. Sell the property but in good conditions
When no other solution is possible, the sale of the property often remains the simplest way to finance the rights. “Mostly, the heirs liquidate the property”notes Maître Véronique Dejean de la Bâtie. But this sale does not necessarily take place urgently. The notary can organize the transaction sufficiently in advance so that the sale price is used directly to pay the duties.“When I see that the heirs are moving towards selling, we organize the sale of the asset before six months”she explains. If the deadline is too short, a split payment request also allows you to avoid late payment penalties until the sale is completed.
Anticipating remains the best way to reduce the bill
For the notary, the best way to avoid having to sell a property in an emergency is to prepare your estate well before death. ” Anticipate. There is no doubt. You can completely smooth things over by preparing the transfer, calculating taxes, using life insurance or transferring certain assets in bare ownership. » She therefore invites families to consult a notary before it is too late. “ Making a will or preparing its transmission is not like dying a little. Above all, it’s about allowing loved ones to get through this period in better conditions. »
She also recalls that inheritance tax does not concern not just big assets. “In the Paris region, it is sometimes enough to own your main residence and have two children to be subject to inheritance tax. This is not a topic reserved for wealthy families. »
