In France, more than 7 million people live in cohabitation. A choice of freedom, often motivated by a disinterest in administrative conventions. However, behind the romanticism of a common-law union lies a rather brutal legal reality since for the tax authorities, the cohabiting partner is not a spouse. In the event of death, this indifference from the State results in a fairly heavy tax bill with a 60% tax rateapplied by the tax administration on inheritances between cohabitees beyond the, low, reduction of €1,594.
For example, transmitting €100,000 to your partner costs €59,000 in inheritance tax. For an apartment costing €250,000, it costs almost €150,000, or 60% of the sum… “ Beyond the good, it is the physical security of the survivor who is at stakealerts Xavier Colard, associate lawyer at the Cazals-Manzo firm. In cohabitation, there is no right to housing. If the property belonged to the deceased, the partner can technically be evicted the day after death by the legal heirs “. The scenario gets tougher in the case of blended families. Imagine that your partner has children of their first birth. On their death, the property goes directly to them. In the event of joint ownership between two people, you do not recover the other’s share since it goes directly to the heirs of the deceased (or his parents if he does not have any).
PACS and will
“ Conversely, PACS partners benefit from a total exemption inheritance tax thanks to the TEPA law of August 21, 2007 », continues the lawyer. But, be careful, the PACS does not automatically protect, it is a contract, not an act of inheritance. Unlike marriage, the PACS partner is not a legal heir. Without a will attached to the PACS, the partner receives absolutely nothing. The best solution, outside of marriage, is to combine PACS and will, which costs less than 200 euros with a notary.
“ The PACS provides the fiscal framework, therefore 0% inheritance tax and the will provides the legal framework because it designates the partner as heir”summarizes Xavier Colard. It is only under this condition that transmission becomes free. If there are no children, you can leave everything behind. In the presence of children, you can bequeath the “available portion” (the portion that is not reserved for children), which often makes it possible to protect the use of the accommodation.
Clause and SCI
For those who refuse PACS, there are some tools to limit damage, although they are less radical. “ This does not change the inheritance fees.advises the lawyer. But it is possible to add a priority redemption clause from the partner on the act of acquisition of the property concerned. It’s not magic, it just means that we have the right to buy this share from the heirs as a priority. “. Buy through a SCI (real estate company) allows a mechanism of co-management or successive management: “ If the statutes are well writtenhe explains. We can imagine that the shares of the SCI of the deceased spouse go to the heirs but the manager has the power to decide whether or not to transfer the property, by making it available free of charge for at least a certain period of time. “.
Another option, life insurance allows you to transmit capital with a reduction of €152,500 per beneficiary, without paying the famous 60%, regardless of the relationship. And, finally, the tontine clause which stipulates that the last survivor is considered to have always been the sole owner of the property. If it neutralizes the heirs, it carries a risk: the partners must have a similar life expectancy and have contributed to the financing.
