Inheritance in Morocco: are inheritance taxes payable in France?
International inheritances: France and Morocco
Inheritance is a crucial stage in the transfer of an estate from a deceased person to their heirs. However, where the deceased had connections with two different countries, such as France and Morocco, matters can become complex, particularly in relation to taxation and inheritance tax. If a French national resident in Morocco dies, will their heirs, whether resident in France or elsewhere, have to pay inheritance tax in France? The answer depends on several factors: the deceased’s tax residence, the heirs’ tax residence and the location of the assets. The information below is intended to clarify the tax implications of an inheritance in Morocco and the circumstances in which French inheritance tax may be payable.
The legal framework for inheritances in Morocco
The information below is provided subject to all reservations. It should be confirmed by a Moroccan tax lawyer before any action is taken. In tax matters, Morocco applies specific inheritance rules that differ significantly from those applicable in France. Unlike France, where inheritance tax may be substantial depending on the relationship between the deceased and the heirs, Morocco applies a comparatively lighter tax regime. Inheritance matters are generally governed by rules derived from Muslim law, and taxes on inheritances are more limited, particularly for close relatives. The position may nevertheless vary depending on the nature of the assets and the family relationship.
Specific features of inheritance in Morocco
- Inheritance involving Moroccan residents: if the deceased was domiciled in Morocco at the time of death, their estate will be subject to Moroccan inheritance rules, which are largely influenced by Islamic law, and inheritance taxation, where applicable, is generally very low or non-existent for direct heirs.
- Real estate: transfers of real estate on death may be subject to certain taxes in Morocco, but these remain lower than the inheritance taxes generally applicable in France.
For expatriates, whether French, Moroccan or otherwise, residing in Morocco, however, the estate will not necessarily be governed solely by Moroccan tax rules. Heirs may also be affected by French inheritance tax, particularly if they reside in France or if the deceased owned assets in France.
French inheritance tax: what are the implications for heirs?
Even though Morocco has comparatively favourable inheritance taxation, heirs are not necessarily exempt from French inheritance tax. French tax law determines liability by reference to several criteria.
The deceased’s tax residence
The deceased’s tax residence is a key factor. Two main situations may arise:
- The deceased was tax resident in France: if the deceased was resident in France, all their assets, whether situated in France or abroad, including in Morocco, may be subject to French inheritance tax.
- The deceased was tax resident in Morocco: if the deceased was tax resident in Morocco at the time of death, heirs may nevertheless be liable to French inheritance tax if they are resident in France. This may extend to assets located abroad, including in Morocco, depending on the heirs’ French tax residence.
The six-year rule
Another important point is the French six-year rule. Where the deceased was not tax resident in France, an heir who is tax resident in France may be taxable in France on assets situated abroad if that heir has been tax resident in France for at least six of the ten years preceding the transfer. Assets situated in Morocco may therefore fall within the scope of French inheritance tax.
Tax treaties between France and Morocco
France and Morocco have entered into tax treaties intended to prevent double taxation. There is, however, no comprehensive bilateral convention devoted exclusively to inheritance tax between the two countries. In principle, this may result in taxation arising in both jurisdictions.
No general inheritance-tax treaty
Unlike treaties dealing with income or capital taxation, there is no general France-Morocco convention governing all inheritance taxes. In practice, double taxation may nevertheless be limited because Morocco imposes little or no inheritance tax in a number of direct-line inheritance situations. The Franco-Moroccan tax convention dealing with income and capital does, however, contain a specific provision concerning estates under which Moroccan securities forming part of the estate of a French national domiciled in Morocco may, subject to the applicable conditions, be exempt from French transfer duties on death.
Tax credit mechanism
Where double taxation arises, French law may provide a mechanism allowing certain foreign inheritance taxes paid in Morocco to be credited against French inheritance tax, subject to the statutory conditions and limits.
Planning an inheritance between France and Morocco
French nationals residing in Morocco may wish to anticipate the settlement of their estate in order to organise the transfer of their assets in appropriate legal and tax conditions. Estate planning can help identify and, where legally possible, reduce future tax exposure in both Morocco and France. For further information: Legal and tax audit – International estate planning.
Preparing an appropriate will
One of the first issues to consider is the preparation of an international will taking account of the relevant French and Moroccan legal rules. A properly prepared will can help prevent uncertainty or disputes between heirs. Advice from a notary or lawyer experienced in international succession law may therefore be appropriate.
Lifetime gifts
Lifetime gifts are frequently used as part of French estate planning. French law provides allowances and exemptions that may permit assets to be transferred during the donor’s lifetime under favourable tax conditions. The tax consequences may differ depending on whether the gift is made in Morocco or France and on the tax residence of the parties.
Life insurance
In France, life insurance is often used as an estate-planning instrument because, subject to applicable conditions and limits, sums may be transferred under a specific tax regime. In an international situation, the interaction with Moroccan law and taxation should also be considered.
Declaring a Moroccan inheritance in France: the notary’s role
Procedure
If you are an heir of a person who was domiciled in Morocco at the time of death, the notaries and staff of our notarial office can assist you with:
- Determining whether inheritance tax is payable in France;
- Calculating any French inheritance tax due;
- Preparing the French inheritance tax return;
- Filing the inheritance tax return with the French tax authorities;
- Paying any inheritance tax due to the French Treasury.
Where there are several heirs, a single inheritance tax return may be filed for all heirs, or a return may be filed for only some of them, particularly where a dispute exists between heirs. Our notarial office can carry out the French tax formalities relating to a Moroccan estate entirely remotely, without the heirs having to travel to our office. For further information: Can a notarial deed be handled remotely?
Time limit
Where the deceased was domiciled in Morocco at the time of death, the heir or heirs generally have ONE (1) YEAR from the date of death to file the inheritance tax return with the French tax authorities and pay any inheritance tax due. After this period, late-payment interest, surcharges or penalties may become payable. Where this deadline has expired, or where it is materially impossible to file the return and/or pay the inheritance tax within the deadline, the notary may submit a reasoned request to the French tax authorities seeking a discretionary remission of late-payment interest, surcharges or penalties. Such a request may in particular be relevant where heirs are unable to release the deceased’s Moroccan bank accounts and transfer the funds to France in order to pay the inheritance tax.
Fees
The notary’s statutory fees for preparing an inheritance declaration are set by law. They are calculated in proportion to the value of the estate according to a progressive statutory scale. You may also contact us before taking any steps in order to obtain an estimate. For further information: Requesting an estimate – French notarial fees
Administrative and legal formalities in Morocco
Our notarial office can also assist with the settlement of inheritances in Morocco by facilitating certain formalities from France. We can prepare authentic powers of attorney, certify documents and assist with obtaining apostilles or legalisations where required for documents intended for the Moroccan authorities. For further information: Certification and notarisation services.
Further information
For further information, please contact us by email (ccn@ccn.notaires.fr), by telephone (01.88.32.98.80) or using the contact form below:
