Decision Summary
Overall outcome based on all metrics
✓ UK (for most estates) wins
UK inheritance tax is more predictable and generally lower for most estate configurations. The £500.000 threshold (£1m for couples) is more generous than France's €100.000 per parent-child pair. UK Business Property Relief at 100% outperforms France's Dutreil at 75%. However, France's progressive rates at mid-estate values for children are lower than UK's flat 40%, and French assurance vie is a uniquely efficient planning vehicle.
Estate of £500.000-1.000.000 (couple)
🇬🇧 UK
UK nil-rate band doubled for couples creates £1m threshold. Much of this range may be tax-free
Estate of €1m-3m to children
🇫🇷 France
French progressive rates (20-30% at mid values) lower than UK flat 40% in this range
Business assets
🇬🇧 UK
UK Business Property Relief at 100% exempts qualifying business. France Dutreil only 75%
Life insurance planning
🇫🇷 France
French assurance vie regime exempt up to €152.500 per beneficiary. No UK equivalent
Gifts to children over time
🇬🇧 UK
UK 7-year rule faster than France's 15-year lookback for gifts to become exempt
Cross-border UK-France estate
⚖️ Specialist advice required
EU Succession Regulation and bilateral treaty create complex interaction. Professional advice essential
£325.000
UK IHT nil-rate band
Per individual. No tax below this threshold. £500.000 with main residence relief
40%
UK IHT rate
On estate value above nil-rate band. Reduced to 36% if 10%+ left to charity
100%
France spouse exemption
Spouses and PACS partners fully exempt from succession tax. better than UK
€100.000
France direct descendant allowance
Per parent per child. Renewable every 15 years. Can be used for gifts too
100%
UK spousal exemption
Unlimited spousal exemption. Transferable nil-rate band to surviving spouse
⚖️ Side-by-Side Comparison
Metric
🇬🇧 UK Inheritance Tax
🇫🇷 France Succession Tax
Winner
Spousal Exemption
On death transfer to spouse
100%. unlimited spousal exemption
100%. spouses and PACS partners fully exempt
Tied
Both countries fully exempt spouse-to-spouse transfers
Nil-Rate Band / Allowance (per person)
£325.000 nil-rate band + £175.000 residence nil-rate band = £500.000 total
€100.000 per parent per child (every 15 years)
🇬🇧 UK Inheritance Tax
UK effective threshold £500.000 (can be £1m for couple) larger than France's €100.000 per parent-child combination
Top Tax Rate
40% on value above nil-rate band
45% on direct descendants above €1.805.677 bracket
🇬🇧 UK Inheritance Tax
UK top rate 40% lower than France's 45% maximum
Rate to Children (mid bracket)
40% flat above nil-rate band
20% on €15.933-552.324. Progressive to 45%
🇫🇷 France Succession Tax
France applies lower rates at mid-estate values for children. UK flat 40%
Transferable Allowance to Surviving Spouse
Unused nil-rate band fully transferable. Doubles effective threshold to £1m
No transferability. Each parent has separate €100.000 per child
🇬🇧 UK Inheritance Tax
UK double allowance for married couples significantly more generous than France
Gifts in Life
Potentially exempt after 7 years (taper relief applies 3-7 years)
Exempt if >15 years before death. Allowance resets every 15 years
🇬🇧 UK Inheritance Tax
UK 7-year rule faster than France's 15-year rule for large gifts to become IHT-free
Business Property Relief
100% relief on qualifying business assets. Major planning tool
Dutreil Pact. 75% abatement on qualifying business assets if conditions met
🇬🇧 UK Inheritance Tax
UK 100% BPR more generous than France's 75% Dutreil abatement
Life Insurance Treatment
Potentially outside estate if written in trust
Assurance vie. major planning vehicle. Exempt up to €152.500 per beneficiary (for policies pre-70)
🇫🇷 France Succession Tax
French assurance vie is a unique and very efficient estate planning tool with no UK equivalent
Cross-Border Complexity
UK taxes based on domicile of deceased. Worldwide assets if UK domiciled
France taxes based on residence/domicile of deceased and location of assets
Tied
Both create complexity for cross-border estates. Professional advice essential
ⓘ UK nil-rate band frozen until at least 2028 under current government plans. fiscal drag increases effective burden as estate values rise. French €100.000 allowance can be used for gifts and resets every 15 years. a major planning mechanism. France residence nil-rate band equivalent does not exist. All amounts in local currency. GBP approximately 1,18 EUR.
🧠 Analysis
The UK Nil-Rate Band Has Been Frozen Since 2009. Fiscal Drag Is Silently Expanding IHT Liability
Key Evidence
- UK nil-rate band frozen at £325.000 since 2009. No increases planned until at least 2028
- UK average house prices have risen from approximately £160.000 (2009) to approximately £285.000 (2026). a 78% increase
- This means more estates cross the IHT threshold each year without any legislative change
- An estate at £500.000 in 2009 was at the threshold. The same real-value estate today is £890.000. well into IHT territory
What This Means
The frozen nil-rate band is a stealth IHT increase. Estates that would have been below the threshold in 2009 are now substantially above it in nominal terms. The residence nil-rate band (£175.000) provides some relief but is subject to tapering for estates above £2m. Families with property in London and the South East are particularly affected.
Source: UK HMRC IHT statistics 2026. ONS house price data 2026
French Assurance Vie Is One of Europe's Most Efficient Estate Planning Tools. With No UK Equivalent
Key Evidence
- French assurance vie (life insurance with investment component) allows investments to grow free of succession tax during the policyholder's lifetime
- On death, beneficiaries receive up to €152.500 each exempt from succession tax (for premiums paid before policyholder age 70)
- Unlimited beneficiaries can be designated. a large family can extract very significant wealth free of tax
- The assurance vie structure is deeply embedded in French financial planning and widely used across wealth levels
What This Means
For families with significant French assets or French-resident family members, the assurance vie structure provides a uniquely efficient way to pass wealth outside of the normal succession tax framework. The UK has no equivalent mechanism offering comparable estate planning efficiency combined with investment growth. For cross-border UK-France families, structuring French assets inside assurance vie is a key planning consideration.
Source: French Tax Code Article 990-I. AMF France assurance vie regulation 2026
✓ Understanding Check
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🎯 Make Your Decision
Which jurisdiction is more estate-tax efficient for your situation?
Based on estate size, family structure and asset type
Estate below £1m (couple, UK property)
🇬🇧UK
Double nil-rate band plus residence relief can eliminate IHT entirely for many couples
Business assets
🇬🇧UK
UK Business Property Relief at 100% is more generous than France's 75% Dutreil
Investment wealth (mid €1m-3m) to children
🇫🇷France
French progressive rates at mid values (20-30%) lower than UK flat 40%
Life insurance planning
🇫🇷France
Assurance vie exempts up to €152.500 per beneficiary. No UK equivalent
Lifetime gift strategy
🇬🇧UK
7-year rule faster than France's 15-year lookback for gifts to become exempt
Cross-border UK-France estate
⚖️Specialist advice essential
EU Succession Regulation and bilateral treaty create complexity requiring expert planning
⚖️ Related Comparisons
📊 Related Intelligence
❓ Frequently Asked Questions
Both. UK: unlimited spousal exemption. all assets passing to a UK-domiciled spouse are fully exempt from IHT. France: spouses and PACS (civil partnership) partners are fully exempt from succession tax. one of the improvements introduced in French law in 2007. In both countries, spouse-to-spouse transfers are fully exempt, making the key planning question about passing to the next generation.
The Dutreil Pact (Pacte Dutreil) is a French succession tax mechanism that provides a 75% abatement on the value of qualifying family business assets passed to heirs, subject to commitment conditions requiring the family to retain the shares for minimum periods. UK Business Property Relief (BPR) provides 100% exemption on qualifying business assets. more generous than France's 75% abatement. Both require genuine business assets meeting qualifying conditions.
The EU Succession Regulation (Brussels IV, 650/2012) allows EU residents to elect for their estate to be governed by the law of their nationality rather than their residence country. The UK has not adopted Brussels IV (and left the EU), creating complex interaction for UK-France cross-border estates. A UK national resident in France may have different options depending on whether they make an election for English law to govern their succession. Specialist cross-border estate planning advice is essential for families with assets in both countries.
✓ Key Takeaways
Key Takeaways
✓
UK IHT nil-rate band frozen at £325.000 since 2009. fiscal drag silently expanding liability as asset values rise
✓
UK effective threshold for couples: up to £1.000.000 using transferable nil-rate band and residence relief
✓
France: spouses and PACS partners fully exempt. UK: spousal exemption also unlimited and fully exempt
✓
UK Business Property Relief at 100% is more generous than France's Dutreil Pact at 75%
✓
French assurance vie exempts up to €152.500 per beneficiary. no UK equivalent mechanism
✓
UK 7-year gift rule is faster than France's 15-year lookback for gifts to become exempt
✓
France applies progressive rates at mid-estate values that can be lower than UK's flat 40%
✓
Cross-border UK-France estates require specialist advice. EU Succession Regulation applies
Sources & References
Comparison for informational purposes only. Results depend on individual circumstances. Last updated Jan 2026.
Disclaimer
Inheritance tax rules change frequently. This is not tax or legal advice. Consult a qualified adviser.
Inheritance tax rules change frequently. This is not tax or legal advice. Consult a qualified adviser.