Searches in Britain for pension inheritance tax planning are climbing, and the reason is a dated, published reform: from 6 April 2027, most unused pension funds and pension death benefits join the taxable estate for United Kingdom Inheritance Tax. For a British citizen who has settled in France since Brexit, that reform lands on top of a second system. France taxes the worldwide estate of anyone fiscally domiciled on its soil, applies its own levies to life assurance pay-outs and pension capital, and protects children through a reserved share that English law does not know. The same pension pot can therefore be counted twice, once in London and once by the French notaire settling the succession. This article explains, for a British reader and in plain English with every French term defined at first use, how the two systems meet, where double exposure really arises, and which levers exist to challenge an excessive bill. It assumes the reader is resident in France after Brexit and holds United Kingdom pension rights, whether a State Pension, a workplace defined benefit scheme or a defined contribution pot.

I. What the 2027 United Kingdom reform changes for a Briton living in France

A. Unused pension funds brought inside the United Kingdom estate: the £325,000 threshold and the 40 per cent rate

Until the reform, United Kingdom registered pension schemes sat largely outside Inheritance Tax. An undrawn defined contribution pot passed to beneficiaries outside Inheritance Tax, with income tax at the beneficiary’s marginal rate depending on the age at death. The technical note published by the British government ends that treatment in these terms: the reform brings most unused pension funds and pension death benefits inside the value of the estate for Inheritance Tax for deaths from 6 April 2027 The measure was enacted in the Finance Act 2026, which, in the government’s words, received Royal Assent on 18 March 2026, and it applies by date of death: the change applies by date of death: deaths on or after 6 April 2027 fall under the new rules, while a member dying before that date stays under the current rules even where benefits are paid out afterwards The date of death, not the date of payment, therefore decides which regime applies, a point that matters for families administering an estate across two countries with different probate calendars. The official guidance is published on the GOV.UK technical note on Inheritance Tax on pensions.

Once inside the estate, the pot faces the ordinary Inheritance Tax machinery. No tax arises where the estate is worth less than the £325,000 threshold, and none arises where everything above the threshold passes to a surviving spouse or civil partner, a charity or a community amateur sports club. Above the threshold the standard rate is 40 per cent, charged only on the slice of the estate above the threshold. The government’s own example makes the arithmetic concrete: an estate of £500,000 with a £325,000 threshold producing a charge of 40 per cent on £175,000 Those figures are taken from the GOV.UK guide to Inheritance Tax. A British expatriate with an untouched self-invested personal pension worth 300,000 pounds alongside a French house and savings can therefore cross the threshold on the pension alone, even before French duty is considered. Gifts made while alive add a further layer, since some lifetime gifts may still be taxed after death, and the seven-year clock familiar to English advisers keeps running after a move to France.

Two practical consequences follow for the Franco-British family. First, the personal representatives, the English-law equivalent of the French heirs and executor combined, must now value pension rights they previously ignored, obtain information from scheme administrators under the new sharing duties, and pay tax before probate assets can be distributed. The reform creates a dedicated payment channel for this purpose, but the liability itself sits with the estate. Second, the spouse exemption remains the simplest shelter on the United Kingdom side: everything passing to a surviving spouse or civil partner escapes the charge. That shelter is automatic in London, yet it does not travel to France, where the surviving spouse is protected differently, through a full exemption from French succession duty rather than through a threshold. The two exemptions look similar and work differently, which is why each must be checked in its own system rather than assumed to cover both.

B. Why French fiscal domicile pulls the same pension wealth into French succession duty

France does not ask where the pension was earned. It asks where the deceased was fiscally domiciled, a concept defined by article 4 B of the General Tax Code (Code général des impôts), which treats as domiciled in France, among others, “Les personnes qui ont en France leur foyer ou le lieu de leur séjour principal” (persons who have their home or principal residence in France). A British citizen who lives year-round in the Dordogne, is registered with the local commune, files a French income tax return and holds a Withdrawal Agreement residence card will normally meet that test, even while keeping a British passport and receiving a United Kingdom pension. Fiscal domicile is a question of fact, home, presence and professional activity, not of nationality or of the immigration document held.

Once French fiscal domicile is established, article 750 ter of the General Tax Code casts a worldwide net: “Sont soumis aux droits de mutation à titre gratuit : 1° Les biens meubles et immeubles situés en France ou hors de France, et notamment les fonds publics, parts d’intérêts, biens ou droits composant un trust défini à l’article 792-0 bis et produits qui y sont capitalisés, créances et généralement toutes les valeurs mobilières françaises ou étrangères de quelque nature qu’elles soient, lorsque le donateur ou le défunt a son domicile fiscal en France au sens de l’article 4 B” (property of every kind, in France or abroad, is subject to gratuitous transfer duty where the deceased was fiscally domiciled in France). Pension rights are movable property for this purpose. The undrawn United Kingdom pot, the death benefit lump sum and even capitalised products therefore fall in principle within the French succession, valued under French rules and taxed at French rates according to kinship. The French house, the French bank accounts and the United Kingdom pension are aggregated into one taxable mass, from which only the allowances and exemptions examined below are deducted.

Many readers hope a tax treaty removes the overlap. The instrument in force between the two countries does not. The convention signed in London on 19 June 2008, which entered into force on 18 December 2009 and is effective for Income Tax and Capital Gains Tax, is a treaty on taxes on income and on capital, as its very title confirms: the Double Taxation Relief and International Tax Enforcement (Taxes on Income and Capital) (France) Order 2008, effective for Corporation Tax from 1 April 2010 and for Income Tax and Capital Gains Tax from 6 April 2010 (see the GOV.UK page on the 2008 convention). Succession duty, the French droits de mutation par décès, sits outside that framework. There is no bilateral credit mechanism comparable to the income-tax credits British residents in France use each year on their 2047 and 2042 returns. Double exposure is therefore legally possible: the same pension capital taxed at 40 per cent above the threshold in the United Kingdom and then subjected to French transfer duty in the hands of each beneficiary. The defence is built domestically, on each side separately, through allowances, exemptions, life assurance structuring and timely challenges, which is the subject of the second part. Readers fixing their residence position for the first time should start with the arrival pillar on visas, residence cards and challenging a refusal, since fiscal domicile usually follows the settled life that the residence card documents.

II. How France taxes the transmission, and where challenges bite

A. The reserved share, life assurance levies and pension capital: which door the money walks through

French succession law starts from a concept English lawyers find startling: the forced share. Article 912 of the Civil Code (Code civil) provides that “La réserve héréditaire est la part des biens et droits successoraux dont la loi assure la dévolution libre de charges à certains héritiers dits réservataires, s’ils sont appelés à la succession et s’ils l’acceptent. La quotité disponible est la part des biens et droits successoraux qui n’est pas réservée par la loi et dont le défunt a pu disposer librement par des libéralités” (the reserved share is the portion of the estate the law secures, unencumbered by charges, to certain heirs called reserved heirs, where they take the succession; the disposable portion is what remains freely disposable by gift or will). Children are the principal reserved heirs. A British will written in English, even one validly choosing English law for the succession as a whole, cannot simply disinherit children as to French-situated assets without confronting this rule, and pension capital routed through French vehicles meets it too. The detailed interaction between an English-law choice and the French reserved share is mapped in the firm’s guide to British wills and French houses, which should be read alongside this article before any testament is signed.

Life assurance, assurance-vie, is the traditional escape route, and it works because the pay-out is treated as outside the succession. Article L. 132-13 of the Insurance Code (Code des assurances) states the principle: “Le capital ou la rente payables au décès du contractant à un bénéficiaire déterminé ne sont soumis ni aux règles du rapport à succession, ni à celles de la réduction pour atteinte à la réserve des héritiers du contractant. Ces règles ne s’appliquent pas non plus aux sommes versées par le contractant à titre de primes, à moins que celles-ci n’aient été manifestement exagérées eu égard à ses facultés” (capital or annuity payable on death to a named beneficiary is subject neither to hotchpot nor to reduction for infringement of the reserve; nor are the premiums, unless manifestly excessive in light of the policyholder’s means). The exception is narrow and judged at the date of payment, not with hindsight. On 25 March 2026 the Paris Court of Appeal, Pole 3 Chamber 1, appeal no. 24/10815, rejected children who sought reclassification of their stepmother’s policy as an indirect gift and repayment of the premiums to the estate. The court noted the sale of property, a comfortable pension and substantial means, then held that, on all that evidence, the premiums could not be regarded as manifestly excessive, so that the proof required by article L. 132-13 of the Insurance Code had not been made out, and it confirmed the first-instance judgment in full. For the British family, the lesson is practical: fund the assurance-vie steadily while means are ample, keep evidence of income and assets at each payment date, and the children’s challenge to the premiums will normally fail.

Outside the succession does not mean outside tax. Two levies divide the field by the age at which premiums were paid. Article 757 B of the General Tax Code provides that “Les sommes, rentes ou valeurs quelconques dues directement ou indirectement par un assureur, à raison du décès de l’assuré, donnent ouverture aux droits de mutation par décès suivant le degré de parenté existant entre le bénéficiaire à titre gratuit et l’assuré à concurrence de la fraction des primes versées après l’âge de soixante-dix ans” (sums due by an insurer on the death are subject to death duties according to kinship, but only as to premiums paid after the age of seventy). Premiums paid before seventy escape this article entirely. And the same article creates a valuable pension-planning window, since by exception sums due on death after seventy under a retirement savings plan (plan d’épargne retraite) or the French sub-account of a pan-European pension product “Par exception, les sommes, rentes ou valeurs quelconques dues directement ou indirectement par un assureur, à raison du décès après l’âge de soixante-dix ans du titulaire d’un plan d’épargne retraite mentionné à l’article L. 224-1 du code monétaire et financier ou d’un sous-compte français du produit paneuropéen d’épargne-retraite individuelle mentionné à l’article L. 225-1 du même code, donnent ouverture aux droits de mutation par décès suivant le degré de parenté existant entre le bénéficiaire à titre gratuit et l’assuré pour leur montant total” (are subject to death duties on their total amount), meaning the plan capital is channelled into the ordinary kinship-based duty rather than the flat-rate levy described next. A Briton who transfers pension capital into a French retirement plan should therefore model the succession cost before signing, because the plan wrapper changes the tax door the money walks through.

The second levy, article 990 I of the General Tax Code, catches what article 757 B leaves alone: “Lorsqu’elles n’entrent pas dans le champ d’application de l’article 757 B , les sommes, rentes ou valeurs quelconques dues directement ou indirectement par un ou plusieurs organismes d’assurance et assimilés, à raison du décès de l’assuré, sont assujetties à un prélèvement” (where they fall outside article 757 B, sums due by insurers on death are subject to a levy). The statute then fixes the arithmetic exactly: “puis d’un abattement fixe de 152 500 €. Le prélèvement s’élève à 20 % pour la fraction de la part taxable de chaque bénéficiaire inférieure ou égale à 700 000 €, et à 31,25 % pour la fraction de la part taxable de chaque bénéficiaire excédant cette limite.” Each beneficiary therefore enjoys a fixed allowance of 152,500 euros, pays 20 per cent up to 700,000 euros and 31.25 per cent beyond. The courts apply those figures strictly, as shown in litigation: in Commercial Chamber, 8 January 2020, appeal no. 18-19.428 (ECLI:FR:CCASS:2020:CO10003), the Court of Cassation recorded that keeping the initial contract would have triggered the levy above the allowance, before rejecting the appeal on the scope of the bank’s duty to advise. The decision matters twice: it fixes the arithmetic families must check on every policy, and it shows that a bank or adviser who moves an elderly client’s savings between contracts without explaining the levy can be liable for the lost chance, quantified there at 10,000 euros for breach of the duty to advise. British retirees approached in English by cross-border advisers should therefore demand the 990 I calculation in writing before switching any contract. The income-tax side of the same pensions, treaty article 18, withholding and the annual return, is covered separately in the firm’s guide to British pensions and French income tax; this article deals only with death and transmission.

B. Deadlines, allowances and challenging the bill: the six-month clock and the defences that work

French succession procedure runs on a short clock that catches cross-border families unprepared. Article 641 of the General Tax Code sets the filing deadline for the declaration of succession (déclaration de succession): “De six mois, à compter du jour du décès, lorsque celui dont on recueille la succession est décédé en France métropolitaine; D’une année, dans tous les autres cas” (six months from death where the deceased died in metropolitan France, one year in all other cases). A Briton who dies at home in France leaves six months; one who dies during a stay in England leaves a year. Late filing draws interest and penalties automatically, so the calendar should be diarised at the same time as the English grant of probate is applied for. The declaration is filed by the heirs, legatees and donees, and it must be complete, because article 784 of the General Tax Code requires that “Les parties sont tenues de faire connaître, dans tout acte constatant une transmission entre vifs à titre gratuit et dans toute déclaration de succession, s’il existe ou non des donations antérieures consenties à un titre et sous une forme quelconque par le donateur ou le défunt aux donataires, héritiers ou légataires et, dans l’affirmative, le montant de ces donations ainsi que, le cas échéant, les noms, qualités et résidences des officiers ministériels qui ont reçu les actes de donation, et la date de l’enregistrement de ces actes.” (the parties must state, in every deed and every succession declaration, whether prior gifts were made by the deceased). Earlier English lifetime gifts, even ones sheltered by the seven-year rule in London, must therefore be disclosed in France, where they reduce the available allowances and can revive duty through the fifteen-year recall mechanism that French notaires apply.

Against that strict machinery, the allowances are generous where the family structure fits them. Article 779 of the General Tax Code grants that “il est effectué un abattement de 100 000 € sur la part de chacun des ascendants et sur la part de chacun des enfants vivants ou représentés par suite de prédécès ou de renonciation” (an allowance of 100,000 euros applies on the share of each parent and each living or represented child). Each child therefore receives 100,000 euros exempt from duty before the progressive scale, which climbs to 45 per cent between close relatives. And the surviving spouse or civil partner pays nothing at all: article 796-0 bis of the General Tax Code provides that “Sont exonérés de droits de mutation par décès le conjoint survivant et le partenaire lié au défunt par un pacte civil de solidarité” (the surviving spouse and the partner bound by a civil solidarity pact are exempt from death duties). A British couple married in England and settled in France, or bound by a French PACS (pacte civil de solidarité, the registered partnership), transmits the French estate between spouses exempt from French duty, whatever London charges on the same assets. Where the heirs are siblings, nephews or unmarried partners, by contrast, the rates reach 55 and 60 per cent, and the assurance-vie route with its per-beneficiary allowance usually becomes the centre of planning.

When the administration goes too far, the courts police the boundary. Sums moved out of the deceased’s account in the year before death cannot simply be added back to the estate on suspicion. In Commercial Chamber, 10 June 1997, appeal no. 95-15.784, the Court of Cassation quashed a judgment that had reinstated 275,000 francs withdrawn during the final year, holding that the lower court had violated the cited provision, and it ordered transcription of its decision in the margin of the quashed judgment. The tax authority must prove, not presume: unexplained use of funds is not enough without a legal basis for reinstatement. The same discipline governs challenges to valuations of unlisted pension rights, to the claimed date of fiscal domicile, and to late-payment penalties where the delay stems from a genuine cross-border difficulty. In practice, the challenge runs in stages: a detailed reply to the reassessment proposal (proposition de rectification) within the stated time, then a formal contentious claim (réclamation contentieuse) to the tax office, then referral to the administrative court if the claim is rejected expressly or by silence. Each stage has its own deadline, and missing one closes the door even where the merits are strong, so advice should be taken as soon as the first letter from the administration arrives, not after the final demand.

Conclusion

A British resident of France now faces two death-tax systems on the same pension wealth: the United Kingdom’s 40 per cent charge above the £325,000 threshold on unused funds for deaths from 6 April 2027, and France’s worldwide succession duty on anyone fiscally domiciled under article 4 B, with no treaty credit between them. The lawful response is sequencing, not concealment. Fix the fiscal domicile evidence early, choose beneficiaries with the allowances in mind, route capital through the correct door, assurance-vie before seventy, retirement plan or direct transmission after, with the 152,500-euro allowance and the spouse exemption verified in figures, keep proof of means at every premium date in case reserved heirs challenge, disclose prior gifts in the declaration, and file within six months of a death in France or one year elsewhere. Where the administration adds back sums without basis, taxes the wrong door or denies an allowance, the case law above shows that reasoned, timely challenge succeeds. The reform rewards families who plan the transmission while both spouses are alive; it punishes those who discover the two systems in the months after a death.