A loved one passes away, and along with the grief come paperwork, a French notary, a legal professional who handles estates and property transactions (notaire), and deadlines. Then comes a question you may not always dare to ask out loud: how much will be left once the tax authorities have taken their share? The rate schedule shows rates of up to 45%, or even 60%, which is enough to worry anyone. But the rate on the schedule is almost never the rate you will actually pay. In this article, we explain how French inheritance tax (droits de succession) is calculated in 2026, we work out what you actually keep in four common situations, and then we give you the broad outlines for investing that money with peace of mind.
Inheritance Tax in France: What You Keep and How to Invest It
This article was originally written in French by Jordan Houi for readers residing in France. The savings products, tax rules, and figures it describes apply in France; other countries have different rules.
Contents:
How inheritance tax is calculated
How much you really keep: four worked examples
What is exempt from inheritance tax
The fees that still eat into the inheritance
How to invest inherited money
FAQ
How inheritance tax is calculated
Good news first: there is nothing mysterious about the calculation.
It is done heir by heir, in three steps. First, the net share each heir receives is determined, meaning their share of the deceased's assets after debts are deducted. Next, a French tax allowance (abattement) is subtracted, which depends on the family relationship. Finally, a progressive rate schedule is applied to what remains.
Progressive, like income tax: each bracket is taxed at its own rate, and only the top bracket reaches the highest rate.
A married spouse and a partner in a French civil partnership (PACS) have been fully exempt from inheritance tax since 2007, whatever the amount received. The rest of this article therefore concerns the other heirs.
Allowances based on your relationship to the deceased
The allowance is the portion of the inheritance that is not taxed at all. The closer the family relationship, the higher it is.
| Relationship to the deceased | Allowance in 2026 |
|---|---|
| Married spouse or PACS partner | Fully exempt |
| Child or parent | 100 000 € |
| Brother or sister | 15 932 € |
| Nephew or niece | 7 967 € |
| Grandchild (not by representation) | 1 594 € |
| Any other person, including an unmarried partner | 1 594 € |
| Heir with a disability | €159,325 on top of the personal allowance |
In practical terms: a child who inherits €90,000 from one parent pays nothing. Zero.
And these amounts did not change with the 2026 Finance Act: the allowances and the tax schedule are identical to those of previous years.
The direct-line schedule
For children, grandchildren inheriting by representation, and parents, here is the schedule that applies to the taxable share, after the allowance.
| Taxable share after allowance | Rate |
|---|---|
| Up to €8,072 | 5 % |
| From €8,072 to €12,109 | 10 % |
| From €12,109 to €15,932 | 15 % |
| From €15,932 to €552,324 | 20 % |
| From €552,324 to €902,838 | 30 % |
| From €902,838 to €1,805,677 | 40 % |
| Over €1,805,677 | 45 % |
Take a child who inherits €300,000 from his father. After the €100,000 allowance, the taxable share is €200,000. The calculation gives €403.60 on the first bracket, €403.70 on the second, €573.45 on the third, then €36,813.60 on the remaining €184,068 taxed at 20%.
Total: €38,194.
That is 12.7% of the inheritance. Far from the 20% you might have imagined when reading the tax schedule, and even further from 45%.
Brothers, sisters, nephews, unmarried partners: a different scale
As soon as you step outside the direct line, the picture changes dramatically.
Between brothers and sisters, the schedule has only two brackets: 35% up to €24,430 of taxable share, then 45% above that. For nephews and nieces, it is a single rate of 55%. And for everyone else (a friend, a distant cousin, an unmarried partner not in a PACS), the rate climbs to 60%.
Yes, 60%.
A brother or sister can be fully exempt if they meet three conditions at once: being single, widowed, divorced or legally separated; being over 50 (or having a disability that prevents them from working) at the time of death; and having lived under the same roof as the deceased for the previous five years.
How much is left after taxes? Four worked examples
Enough theory. Here is what inheritance tax comes to in situations you often encounter, calculated using the 2026 schedule and without any special allowance.
| Situation | Amount inherited | Inheritance tax | What you keep | Effective rate |
|---|---|---|---|---|
| Child | 150 000 € | 8 194 € | 141 806 € | 5,5 % |
| Child | 300 000 € | 38 194 € | 261 806 € | 12,7 % |
| Brother or sister (not exempt) | 100 000 € | 35 388 € | 64 612 € | 35,4 % |
| Nephew or niece | 50 000 € | 23 118 € | 26 882 € | 46,2 % |
| Unmarried partner without a PACS | 50 000 € | 29 044 € | 20 956 € | 58,1 % |
This table tells you two things.
The first is reassuring: in the direct line, the vast majority of heirs pay far less than they feared. A child who receives €200,000, for example, pays €18,194 in tax, an effective rate of 9.1%.
The second is far less so: for a nephew or an unmarried partner, nearly half of the inheritance can go to tax. It is precisely for these relationships that planning ahead (French life-insurance savings contract (assurance-vie), PACS, gifts) changes everything... provided you think about it in advance.
Gifts received from the same deceased person in the 15 years before death have already "used up" part of the allowance. If your parents gave you €60,000 ten years ago, you have only €40,000 of allowance left on the estate.
What escapes inheritance tax
Not everything you receive when a loved one dies necessarily goes through the tax scale. Three cases deserve your attention.
Assurance-vie: a separate regime
Sums paid out by an assurance-vie contract to the designated beneficiary are not part of the estate in the civil-law sense. They have their own tax treatment, which depends on the deceased's age at the time the payments were made.
For payments made before age 70, each beneficiary receives an allowance of €152,500. Above that, the sums are taxed at 20% up to €700,000, then at 31.25%.
For payments made after age 70, the allowance drops to €30,500, and it is a global one: it is shared among all beneficiaries, across all contracts. Anything above that is subject to standard inheritance tax. On the other hand, the gains generated by these payments are not taxed at all.
An example? A daughter receives €200,000 from a contract funded by her mother before age 70. The first €152,500 is exempt, and the remaining €47,500 is taxed at 20%, or €9,500. And the €100,000 allowance on the rest of the estate remains fully intact!
The surviving spouse
We mentioned it above, but it bears repeating: spouses and PACS partners pay nothing. This exemption applies only to married couples or those in a PACS. An unmarried partner, by contrast, is still taxed at 60% after an allowance of €1,594.
A huge difference for a simple trip to city hall.
The deceased's primary residence
When the deceased's primary home is occupied on the date of death by their spouse, PACS partner or one of their children, its value benefits from a 20% allowance when calculating the tax. On a house valued at €400,000, the taxable base drops to €320,000.
The costs that eat into the inheritance
Inheritance tax is not the only expense. To know what will actually land in your account, you also have to factor in several additional costs.
The notaire's fees. A notaire is required as soon as the estate includes real estate. The fees are regulated and depend on the value of the assets and the documents to be drawn up (property certificate, estate return, division of the estate). For an estate that includes a home, expect several thousand euros in many cases.
Bank estate-processing fees. Long opaque, they are now capped at 1% of the deceased's account balances, up to a maximum of about €850. For €10,000 held in the accounts, the bank can no longer charge more than €100.
Late-payment penalties. The estate tax return must be filed within six months of the death (twelve months if the deceased lived abroad). After that deadline, late-payment interest applies, followed by a 10% surcharge once the delay exceeds one year. On €100,000 in tax, a one-year delay can cost more than €12,000 in penalties.
You don't have the cash to pay the tax because the inheritance consists mainly of a house? The tax authorities can, on request, grant payment in installments or a deferral, with interest. Talk to the notaire about it from the start rather than letting the deadlines slip.
In short, between the amount you inherit and the sum actually available to you, there is the inheritance tax, plus a few thousand euros in fees. Better to know this before you make any plans.
How should you invest inherited money?
Once the tax is paid, the money is there. And that is often the moment when you feel most at a loss.
First piece of advice, and not the least important: don't rush anything. Nothing obliges you to invest within the following month. Leaving the money in a regulated savings account for a few weeks, giving yourself time to catch your breath and take stock, is a perfectly reasonable decision.
Then, three simple steps will help you structure your thinking.
Start with your emergency savings. Before any investment, make sure you have three to six months of expenses in an account you can access at any time. An inheritance is often the opportunity to top up this cushion.
Split the sum according to your time horizons. Money you will need in two years (renovations, a down payment on a home) should not be invested the same way as money you won't touch for ten years. Each horizon calls for its own investment vehicle, and its own level of risk.
Diversify. For the long-term portion, it is better to spread your money across several asset classes rather than betting everything on a single investment: capital-guaranteed euro fund within a French life-insurance contract (fonds en euros) and market-linked investment units within a French life-insurance contract (unités de compte) in an assurance-vie, stocks through a French tax-advantaged stock savings plan (PEA), real estate, and why not a portion of loans to businesses. Crowdlending , for example, lets you finance small and medium-sized businesses in exchange for regularly paid interest. Like any investment, it carries a risk of capital loss and limited liquidity: it is meant to be one component of a diversified portfolio, not the whole of it. The interest you receive is also taxable, as we explain in our article on crowdlending taxation.
Summary table
| Key point | Key takeaway |
|---|---|
| Spouse and PACS partner | Fully exempt |
| Child | €100,000 allowance, then rates from 5% to 45% |
| Brother or sister | €15,932 allowance, then 35% and 45% |
| Nephew, niece | €7,967 allowance, then 55% |
| Unmarried partner, friend | €1,594 allowance, then 60% |
| Assurance-vie | Separate rules: €152,500 per beneficiary for premiums paid before age 70 |
| Filing deadline | 6 months after the death |
| Investing | Emergency fund, time horizons, diversification |
Key takeaway
For direct descendants and ascendants, inheritance tax weighs much less heavily than the rate schedule suggests: for most inheritances, the effective rate stays below 15%. It is outside the close family that the bill becomes truly harsh.
So before you think about investing, do the full math: inheritance tax, notaire fees, bank fees. This net amount, and this amount alone, should be the basis for your decisions.
And once the money is available, take your time. A well-invested inheritance is rarely one invested in a hurry.
FAQ
Is inheritance tax paid before the estate is divided?
Yes, in principle. It is due when the estate return is filed, within six months of the death, even if the division among heirs is not complete. Each heir owes his or her own tax, but the notaire often pays it from the deceased's accounts when possible.
Can inheritance tax payments be spread out?
Yes, under certain conditions. The tax authorities can grant split payment, in several installments, or deferred payment, particularly when an heir receives the bare ownership of an asset. The request is made when the return is filed, and interest applies.
Is assurance-vie part of the estate?
No, not in the civil-law sense. The capital paid to the designated beneficiary follows its own tax rules: an allowance of €152,500 per beneficiary for premiums paid before age 70, and an overall allowance of €30,500 for those paid after. However, premiums that are clearly excessive relative to the deceased's wealth can be added back into the estate.
What happens if I refuse the inheritance?
You receive nothing and pay no tax, nor any of the deceased's debts. Your share then goes to the other heirs, or to your own children by representation. Note: refusing the inheritance does not cause you to lose the benefit of an assurance-vie of which you are the beneficiary.
Inheritance tax is frightening, often more than it should be. Understanding the calculation already means regaining control over a period when everything seems to slip away from you. And you: do you know today what your loved ones would pay on what you leave them?
About Maclear
Maclear AG is a Swiss peer-to-peer (P2P) lending and crowdlending platform, headquartered in Switzerland. The company acts as a financial intermediary in the non-banking sector and is a member of PolyReg SRO, in accordance with Swiss financial regulations, particularly regarding AML, KYC, and GDPR. Maclear provides individual and qualified investors access to carefully selected business loan opportunities, with integrated risk assessment, a Provision Fund, and a Secondary Market for liquidity.
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