In light of the COVID-19 pandemic, the Government has published guidance on postponing payments of contributions typically made by developers, such as those under planning obligations and Community Infrastructure Levy...
Estate administration and estate planning in France – the impact of coronavirus
As a result of the coronavirus crisis and the inability to attend the Notaire’s offices in person, the administration of French estates is currently subject to significant delays.
Equally, the situation regarding signing by proxy isn’t yet clear. Usually, the signature of a proxy must be witnessed either by a Notaire or a Mairie official but, in current circumstances, this isn’t possible. Some Notaires are adopting a pragmatic attitude, allowing their clients to print their proxies and sign them at home unwitnessed, as well as accepting emailed copies. However, the postal system is currently unreliable for sending original documents.
Another issue is the difficulty in sending and receiving hard copies of original documents. Usually, there’s a high volume of original or certified copies of documents that must be provided to the Notaire to enable them to draft the French probate Deeds. However, we have been advised to avoid sending documents by registered signed for post for the time being as there might not be a member of staff present at the Notaire’s office to sign for the parcel. Likewise, normal post can be sporadic and original documents are at risk of being lost. Again, Notaires are being flexible, allowing the process to progress using only electronic copies of documents sent by email.
Under normal circumstances, an apostille (a stamp affixed by the Foreign and Commonwealth Office to formally authenticate an official document or a signature on a document) is required. This necessitates sending the original document to the FCO and is usually required on the Grant of Probate as well as any certificate of law prepared by a solicitor. The FCO has issued guidance confirming that they are not currently issuing the apostille on any documents. However, they are willing to confirm the authenticity of a signature if the document is sent electronically.
Whilst such flexibility is welcome, subject to the Notaire being satisfied with this method, it is likely that for sealed documents such as Grants of Probate, the system will not be as efficient.
Despite the French government having already issued more than 25 emergency decrees delaying various administrative processes, none of them allow a deferred payment of French Inheritance tax. Indeed, when a deceased dies outside of France, French IHT must be paid within a year of the death (and within 6 months of the death if the deceased dies while in France) otherwise a 10% penalty of the tax due will apply and be subject to a late payment interest rate. This is an extremely frustrating situation as it’s impossible to obtain a valuation of a French property due to the lockdown and French banks are working even slowly than usual. This means that it’s difficult to establish the actual value of the assets in order to calculate the tax due.
At this stage, if French IHT is due soon on an estate, we would recommend that you liaise with your Notaire to determine an approximate value of the assets. This will allow you to calculate the tax and make a payment on account of French IHT directly to the French tax authorities (pending submission of the tax return which will need to include the actual values).
If a late payment penalty is levied, it’s still possible to apply to the French tax authorities for a waiver of the penalties. Despite the gravity of the current situation, it remains at the discretion of the French tax authorities whether they agree to waive the penalties or not.
It’s currently not possible for beneficiaries to waive their rights to their inheritance of French assets through the mechanism of renunciation (for example in estates with a high level of debt). This is because it’s a service operated by local French Courts, which are currently only dealing with urgent litigation matters. This may cause issues if you are put on notice by the other beneficiaries to either accept or renounce your inheritance and we would recommend that you seek legal advice should you find yourself facing such a situation.
Estate planning & Wills
Estate planning is relatively unaffected by the current lockdown in France. Indeed, we and our Notaire contacts continue to advise our clients remotely. French Wills don’t require any witnesses, as they follow the format of “holographic Wills” and only need to be written and signed to be immediately valid. However, if a choice of English law Will is required, please note that this should be made in an English style Will, which require two witnesses.
Under the lockdown, if you wish for your French Will to be kept safe by a Notaire and registered with the French Central Wills Registry, you can only send your original Will to France in the post, which we strongly advise against at the moment. Instead, we would advise you to safely retain it until normal postal services resume. As reassurance, registering a French Will with the French Central Will Registry is not a condition of validity but simply an extra precaution to ensure that the Notaire instructed to administer the French estate becomes aware of the existence of the French Will. A French Will is fully valid and effective from the moment it’s written by the testator in compliance with French law requirements.
In compliance with the Hague Convention, a French Will can only validly cover French moveable assets (i.e. bank accounts) if it’s written while the testator is physically present in France. Therefore, at the moment, for our British based clients who require Wills urgently, we are only able to draft French Wills related to French immoveable assets (i.e. houses and flats). Ideally, these should be covered in your English Wills to ensure your testamentary dispositions are fully effective.
Despite the complex situation in France and the implications for legal processes, the French government has passed emergency legislation to break the deadlock and protect the economy. We are closely monitoring the situation and are regularly in touch with our French contacts who provide invaluable information. We receive a constant stream of guidance issued by the relevant legal advisory bodies and we constantly review our ongoing files and update our clients on how the various emergency decrees impact the progress of their respective transactions.