French resident and inheritances on US retirement accounts

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Topic Author
assyadh
Posts: 582
Joined: Tue Sep 18, 2018 12:44 pm

French resident and inheritances on US retirement accounts

Post by assyadh »

Hi everyone,

I was reading the US/FR estate tax treaty https://franceintheus.org/IMG/pdf/frenc ... treaty.pdf and the article 8 caught my eye:
Article 8
Taxation Other Than Pursuant to Articles 5, 6, and 7
Except as provided in Articles 5, 6, and 7, property, including shares or stock in a
corporation, debt obligations (whether or not there is written evidence thereof), other
intangible property, and currency may be taxed by a Contracting State only if the
decedent or donor was a citizen of or was domiciled in that State at the time of death or
the making of a gift, and if taxable by that State under its laws.
Since US retirement accounts are not taxable in France for a French resident, would that mean that they are also excluded from the French inheritance taxes? That's what my limited understanding makes me think.

Thoughts?
inverter
Posts: 1021
Joined: Mon Jul 27, 2015 1:40 pm
Location: New York, NY

Re: French resident and inheritances on US retirement accounts

Post by inverter »

I'm not a tax expert but it doesn't read that way to me...
bsteiner
Posts: 9208
Joined: Sat Oct 20, 2012 9:39 pm
Location: NYC/NJ/FL

Re: French resident and inheritances on US retirement accounts

Post by bsteiner »

What does the U.S.-France estate tax treaty say?
TedSwippet
Posts: 5180
Joined: Mon Jun 04, 2007 4:19 pm
Location: UK

Re: French resident and inheritances on US retirement accounts

Post by TedSwippet »

assyadh wrote: Fri Apr 30, 2021 6:40 pm I was reading the US/FR estate tax treaty https://franceintheus.org/IMG/pdf/frenc ... treaty.pdf and the article 8 caught my eye:
Article 8
Taxation Other Than Pursuant to Articles 5, 6, and 7
Except as provided in Articles 5, 6, and 7, property, including shares or stock in a
corporation, debt obligations (whether or not there is written evidence thereof), other
intangible property, and currency may be taxed by a Contracting State only if the
decedent or donor was a citizen of or was domiciled in that State at the time of death or
the making of a gift, and if taxable by that State under its laws.
Since US retirement accounts are not taxable in France for a French resident, would that mean that they are also excluded from the French inheritance taxes? That's what my limited understanding makes me think.
You're referring to the "if taxable by that State under its laws" part, right?

If yes, my amateur reading of it is "if {estate or inheritance} taxable by {France} under its laws". It looks like you're reading it instead as "if {income} taxable by {France} under its laws". I suppose either could be right, but since this is the estate tax treaty, my hunch is that the first is the more likely of the two. Don't know for sure, and I haven't read this treaty (and don't plan to -- sorry!).
Topic Author
assyadh
Posts: 582
Joined: Tue Sep 18, 2018 12:44 pm

Re: French resident and inheritances on US retirement accounts

Post by assyadh »

TedSwippet wrote: Wed May 05, 2021 1:45 pm
assyadh wrote: Fri Apr 30, 2021 6:40 pm I was reading the US/FR estate tax treaty https://franceintheus.org/IMG/pdf/frenc ... treaty.pdf and the article 8 caught my eye:
Article 8
Taxation Other Than Pursuant to Articles 5, 6, and 7
Except as provided in Articles 5, 6, and 7, property, including shares or stock in a
corporation, debt obligations (whether or not there is written evidence thereof), other
intangible property, and currency may be taxed by a Contracting State only if the
decedent or donor was a citizen of or was domiciled in that State at the time of death or
the making of a gift, and if taxable by that State under its laws.
Since US retirement accounts are not taxable in France for a French resident, would that mean that they are also excluded from the French inheritance taxes? That's what my limited understanding makes me think.
You're referring to the "if taxable by that State under its laws" part, right?

If yes, my amateur reading of it is "if {estate or inheritance} taxable by {France} under its laws". It looks like you're reading it instead as "if {income} taxable by {France} under its laws". I suppose either could be right, but since this is the estate tax treaty, my hunch is that the first is the more likely of the two. Don't know for sure, and I haven't read this treaty (and don't plan to -- sorry!).
I see, thanks for the insight. It is not something easy to decipher.
It surprises me the number of US retirees settling in France, I am wondering if they are aware of the dreadful french inheritance taxes.
Topic Author
assyadh
Posts: 582
Joined: Tue Sep 18, 2018 12:44 pm

Re: French resident and inheritances on US retirement accounts

Post by assyadh »

inverter wrote: Wed May 05, 2021 12:00 pm I'm not a tax expert but it doesn't read that way to me...
Can you share your opinion please? thanks
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