Most readers are likely to be aware of the forced heirship rules in France, which (in the absence of inheritance planning) mean that a proportion of your estate is reserved for your children. Your children are also granted an inheritance tax allowance of €100,000, for each child from each parent.
These rules are more generous where the beneficiary is disabled, as no kindship condition is imposed, and there is an additional tax allowance.
In such cases a disabled person, whatever their relationship to the deceased, is entitled to an allowance of €159,325, to which they can add any other allowance to which they may ordinarily be entitled by virtue of blood link.
Thus, a disabled child would be granted a single allowance of €159,325, as well as a further €100,000 from each of their parents.
The same rules apply in relation to a gift.
The law does not specify that the person must be registered disabled or the nature, cause or the level of the disability that must apply before the condition is fulfilled, provided it exists on the day of the event giving rise to the tax.
Article 779, II, of the tax code merely states that “an allowance of €159,325 is made on the share of any heir, legatee or donee, unable to work under normal conditions of profitability, due to physical or mental infirmity, congenital or acquired".
In a case that was recently considered in the French Supreme Court, the Cour de Cassation, the court reiterated the conditions that must be met by stating that the beneficiary must prove that their disability has limited them in their career or studies, with a negative effect on their income, and that their economic prospects would have been better without these limits.
In the case, a disabled man inherited from his sister and contested a decision of the tax authority not to grant him inheritance tax relief under the provision for disabled persons.
Without the allowance he would have been liable for inheritance taxes after an allowance of only €16,000, the standard relief between brothers and sisters.
More specifically, the plaintiff, who had remained in the same company and in the same position for 26 years, argued that an infirmity of his eye since childhood, for which he had a disabled certificate, had limited him in his professional choices.
However, the court ruled there was no causal link between the disability and his professional career stating: "it follows that, to benefit from the said allowance, the person liable must prove the causal link between his disability and the fact that his professional activity has been limited and his advancement delayed or blocked".
Although he benefited from a company retirement plan at the age of 55, the court stated that by itself it: "does not provide evidence that such a departure, which, according to him, would necessarily have been anticipated because of his infirmity, would have had a negative impact on his income".
The fact that he was not able to take up a career in the Navy was "not sufficient evidence that that such a career would have offered him more favourable economic prospects during his working life and retirement."
The ruling in this case is consistent with other similar cases that have been heard in the courts.
Thus, a woman who suffered from throat cancer, depriving her of speech and taste, was not considered to have suffered in her career in an off-licence, as the turnover of the business had remained constant since the onset of her illness.
In another case the court ruled that a heir who, at the date of the opening of the succession, had been retired for several years and whose infirmity resulting from war wounds had not adversely affected the normal course of their career, nor had any impact on the amount of pension he received, was not entitled to the disabled relief.
Those who seek further guidance on the application of this rule would be best advised to make enquiries to their local tax office, in order to obtain a formal opinion from them on your case.
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