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Inheritance tax can represent a significant financial burden for heirs when they inherit from a brother or sister.
However, an exemption from inheritance tax may apply where the deceased lived with the sibling who inherits from them. The French Court of Cassation has reiterated the importance of meeting the applicable conditions, notably in a judgment dated 12 March 2025 (no. 22-20.873).
Calculation of inheritance tax between siblings
Taxable estate
In France, when a person dies, their heirs are, in principle, required to pay inheritance tax (succession" class="glossary-link" hreflang="fr">droits de succession). The tax is calculated on the deceased’s estate after deduction of the liabilities of the estate. This is referred to as the taxable estate.
Allowance
The inheritance tax payable to the French Treasury may be reduced by means of allowances. Between siblings, the current allowance is €15,932 per heir (French General Tax Code [Code général des impôts – CGI], Article 779 IV).
Example: For a taxable estate valued at €100,000, where there is only one inheriting brother, inheritance tax is calculated on €84,068 (€100,000 − €15,932)
Calculation of the Tax (CGI, Article 777, Table III)
The applicable rates are:
- 35% on the portion of the taxable amount up to €24,430;
- 45% on the portion exceeding €24,430.
Example: For an estate of €84,068, after applying the €15,932 allowance, the taxable amount is €68,136. The inheritance tax is calculated as follows:
- up to €24,430: €8,550.50 (€24,430 × 35%);
- from €24,431 to €68,136: €19,667.25 (€43,705 × 45%).
The total inheritance tax payable is therefore €28,217.75 (€8,550.50 + €19,667.25).
However, a full exemption from inheritance tax is available between siblings, subject to specific conditions.
Full inheritance tax exemption between siblings, subject to conditions
What conditions must be met to qualify for the exemption? (CGI, Article 796-0 ter)
The heir must:
• be unmarried, widowed, divorced or legally separated at the time of death
• be over 50 years of age when the succession opens, or have a disability that prevents them from supporting themselves through employment
• have continuously shared the same principal residence with the deceased for the five years preceding the death
What is meant by “Domiciled”?
In a recent decision, the French Court of cassation (judgment of 12 March 2025, no. 22-20.873) held that the condition of being “domiciled with the deceased” is satisfied where the heir had established their principal residence at the same place as that of their deceased brother or sister (Article 102 of the French Civil Code).
It is not sufficient for the heir to have stayed there from time to time or for the siblings to have occasionally spent time together in the same home. The heir must have lived continuously with their brother or sister for the five years preceding the latter’s death.
How can this shared residence be proven?
The shared residence may be established by any means of evidence, including:
• utility bills in both names (electricity, gas, water, etc.);
• rent receipts in both names;
• witness statements;
• an income tax return,...