International wealth transfer: what tax relocation really changes.
Summary
Introduction
Many tax relocation projects are conceived through a single lens: that of income tax and corporate tax. The transfer of wealth is often relegated to a later stage of consideration, even though it represents the most significant financial burden for a generation . A difference of a few percentage points in an annual tax rate rarely has as much impact as a lost inheritance tax allowance or an unforeseen double taxation.
The difficulty stems from a poorly understood reality: changing one's tax residence is not enough to remove an inheritance from French jurisdiction. Three independent criteria still apply, and only one needs to be met for the French tax authorities to retain the right to tax . The place of death alone is irrelevant.
There is a second layer, this one non-tax-related: the law governing inheritance. This law does not necessarily coincide with tax law, and its application depends on mechanisms of private international law that must be activated during one's lifetime. Residence in Dubai, Malta, or Mauritius does not have the same consequences in this regard.
This article examines the ten jurisdictions covered by Coreway Consulting from the exclusive perspective of inheritance. We recently compared five tax models and their taxation rationales ; this article extends that analysis to the estate planning and family aspects.
Taxation and inheritance: two distinct rules
An international inheritance is always analyzed on two levels. The first determines which state can levy inheritance tax; the second designates the civil law that distributes the assets among the heirs . These two levels are governed by different connecting factors and can perfectly well refer to two distinct countries.
The tax system is based on residency and asset location criteria specific to each national legislation. In Europe, the civil system has been based since 2015 on Regulation 650/2012, known as Brussels IV, which considers the deceased's habitual residence at the time of death . Outside the European Union, each state applies its own conflict-of-laws rules.
This separation explains seemingly paradoxical situations. A manager based in Cyprus may have their estate governed by French law if they exercised a professional right, while simultaneously escaping all Cypriot inheritance tax , since the island has abolished it. Taxation and inheritance do not move together.
Why inheritance agreements are rare
France has signed over 120 tax treaties covering income tax, but only about 35 deal with inheritances, and just eight extend to gifts. Consulting the mechanism of atax treaty helps to understand the logic behind eliminating double taxation, but this presupposes that such a treaty actually exists.
In most jurisdictions covered by Coreway, no inheritance tax treaty binds France. The elimination of double taxation then relies on the unilateral tax credit mechanism provided for in Article 784 A of the French General Tax Code (CGI) , which only cancels the tax actually paid abroad on assets located outside France. When the host jurisdiction does not levy any tax, there is nothing to credit.
What France remembers after the departure
Article 750 ter of the General Tax Code sets out three alternative taxation criteria. The first concerns the tax residence of the deceased: if he/she is domiciled in France within the meaning of Article 4 B, the entire worldwide estate is taxable , regardless of the location of the assets.
The second criterion is real: assets located in France remain taxable even when the deceased and the heirs all reside abroad. A Parisian building, shares in a company whose assets consist primarily of real estate, or an account opened in a French institution are included in the French tax base simply by virtue of their location .
The third criterion is the most frequently underestimated. It concerns heirs or donees domiciled in France who have been so for at least six years during the ten years preceding the transfer . A parent who has lived in the Bahamas for fifteen years but whose child lives in Lyon will have the share received by that child taxed in France.
This third criterion therefore requires us to consider the entire family, not just the individual considering the move. Our analyses of tax optimization strategies in Dubai systematically incorporate the location of the heirs, because it determines the actual effectiveness of the plan. A successful individual relocation can remain financially neutral if the next generation remains in France.
United Arab Emirates: no rights, but a devolution to be defined.
The United Arab Emirates does not levy inheritance or gift taxes, either at the federal or emirate level. From a strictly fiscal perspective, the transfer of assets held locally by an Emirati resident is exempt from any transfer tax .
The serious issue therefore shifts to the civil sphere. Since February 2023, the federal decree-law on civil personal status has applied by default to non-Muslim residents, with inheritance divided equally between the spouse and children. This system can be overridden in favor of the law of the deceased's nationality , but only by an explicit declaration of intent.
Registered Will or Local Devolution
In practice, the central tool is the will registered with the dedicated registries, notably the DIFC Wills Service in Dubai. It allows for the specific designation of beneficiaries, the appointment of an executor, and, for parents of minor children, the provision of locally enforceable interim guardianship .
Without this document, the release of bank assets and the transfer of shares in local companies can be frozen for many months. Tax optimization strategies in Dubai only have real value when combined with a written inheritance plan. This is one of the first points we address in an Emirati case, even before the actual relocation.
Cyprus and Malta: inheritance without taxes in Europe
Cyprus abolished its inheritance tax in 2000 and has not reinstated it since. The transfer of assets held by a Cypriot resident does not trigger any local inheritance tax , placing the island in a unique position within the European Union.
Malta does not have inheritance tax per se, but it does apply a tax on documents and transfers. This levy applies to the transfer of Maltese real estate at a rate of 5%, and to the transfer of shares in certain companies at a rate of 2%. It is therefore less an inheritance tax than a registration fee based on the nature of the asset .
European Regulation 650/2012 and the choice of law
Since both jurisdictions are members of the European Union, the Brussels IV Regulation applies. The default law of succession is that of the deceased's habitual residence, but anyone can designate the law of their nationality in their will. This choice of law is a voluntary act, never automatic.
The choice is not neutral. Opting for Maltese or Cypriot law can offer greater testamentary freedom than French law; retaining French law, on the other hand, ensures equality among children. Our work on tax optimization strategies in Malta and Cyprus incorporates this civil dimension from the initial analysis phase, as it determines the chosen structure.
A clarification is necessary: the regulation establishes the law applicable to the transfer of assets, not the tax jurisdiction. Choosing Cypriot law does not eliminate the connecting factors of Article 750 ter . The two approaches remain independent of each other.
Mauritius, Singapore, Bahamas: movable assets and detention vehicles
Mauritius does not levy inheritance tax. Singapore abolished its estate duty for deaths occurring on or after February 15, 2008, and the Bahamas has never instituted an inheritance tax. For assets consisting primarily of movable property, these three jurisdictions offer locally tax-free transfers .
The appeal of these investment centers lies less in the absence of interest rates than in the quality of their holding vehicles. Trusts, foundations, and asset management companies benefit from a proven legal framework, with readily available case law and professionals experienced in cross-border structures. However, the chosen vehicle must withstand scrutiny by the French tax authorities .
Trust, foundation, or company: three distinct models
French law addresses trusts through Article 792-0 bis of the French General Tax Code (CGI), which governs their taxation under inheritance and gift tax and establishes a specific levy. A poorly designed discretionary trust can result in higher taxation than direct ownership , while also generating annual reporting obligations for the trustee.
The foundation, known in both Panama and the Bahamas, has its own legal personality, making it more akin to a company than a trust. Finally, the asset management company remains the most transparent solution for an estate comprised of securities and equity investments . Our analyses of tax optimization strategies in Mauritius detail the substance requirements for each of these vehicles.
The decisive criterion is never the vehicle itself, but the alignment between its actual governance and the settlor's intent. Tax optimization strategies in Singapore clearly illustrate this requirement: the financial center attracts family offices precisely because it mandates effective management within its borders. An empty structure there is just as fragile as anywhere else.
Andorra, Georgia, Panama, Portugal: four shades
Andorra does not levy any inheritance or gift tax. Georgia does not have a separate inheritance tax, but treats inheritance as income: heirs in the first two classes are exempt, while more distant relatives are subject to income tax at a rate of 20% above a certain threshold . Panama abolished its inheritance tax in 1985 and applies a strictly territorial tax system, which leaves assets held outside the country outside its jurisdiction .
The Portuguese case: the imposto do selo
Portugal has abolished its inheritance tax, but subjects gratuitous transfers to stamp duty, the imposto do selo, at a rate of 10%. Transfers to the spouse, descendants, and ascendants are entirely exempt , thus neutralizing the levy in most typical family situations.
This distinction is important to understand because it concerns inheritances outside the direct line of descent: siblings, nephews, unmarried partners, or legatees without a family relationship remain subject to taxation. Therefore, a blended family or a plan to transfer assets to a third party requires prior verification of the line of succession . The tax rate is significantly lower than the French rates applicable to non-relatives.
Forced heirship: what the 2021 law changed
French law protects descendants through the concept of forced heirship, a portion of the estate that the deceased cannot freely dispose of. Most common law jurisdictions disregard this concept and uphold almost complete testamentary freedom . This fundamental difference in philosophy has long been an argument in favor of relocating inheritance abroad.
The law of August 24, 2021, introduced a third paragraph to Article 913 of the French Civil Code. When foreign inheritance law does not include any forced heirship provisions, children may claim compensation from assets located in France , up to the amount of the forced heirship rights that French law would have granted them. This provision applies to estates opened since November 1, 2021.
Actual scope of the compensatory levy
This mechanism requires two cumulative conditions: that the deceased or at least one of their children be a national of a European Union member state or have their habitual residence there, and that there are assets located in France from which to claim . Assets entirely relocated from France are therefore automatically excluded from this mechanism.
Its practical scope was significantly reduced in June 2026, when the European Commission closed the proceedings against France, adopting a strictly literal interpretation of the text. The levy now only applies if the foreign law does not provide any mechanism to protect children ; a functional equivalence is sufficient to preclude it. Family provisions in common law systems are thus considered a protective mechanism.
It would therefore be unwise to present this mechanism as a reliable safety net for forced heirs. We prefer to focus on the current state of the law rather than its hoped-for evolution : a scheme that only holds if a provision is one day removed is not a sound one.
Building a transmission consistent with one's residence
An international inheritance strategy is built in a specific order, and this order is as important as the choices themselves. The location of the heirs must be addressed before the selection of the jurisdiction; otherwise, the third criterion of Article 750 ter negates part of the expected benefit .
Next comes the composition of the estate. French real estate remains taxable in France regardless of circumstances; its prior sale, contribution to a structure, or its deliberate retention requires explicit arbitration. An estate consisting primarily of movable assets offers much greater flexibility and opens the door to the jurisdictions of island nations.
Three questions to be resolved before any arbitration
The first question concerns the time horizon: is the transfer planned for the medium term or several decades from now? A gift-partition made before departure follows different rules than an inheritance opened fifteen years later from Mauritius, and the six-year window of the heir criterion can be used to advantage .
The second concerns the desired governance: outright transfer, division of ownership rights, or ownership through a managed structure. The third concerns the acceptability of documentary risk, since any cross-border structure requires maintaining evidence of substance throughout the arrangement's lifespan .
These three answers influence the choice of jurisdiction far more than the stated rate. This is why we never approach a case by considering the country, but rather by examining the existing family and asset structure .
Comparison of inheritance taxes by jurisdiction
Jurisdiction | Local inheritance taxes | Point of vigilance | Applicable inheritance law |
United Arab Emirates | None | Default devolution to be framed | Possible option for national law |
MAURITIUS | None | Substance of the detention vehicles | Mauritian conflict rules |
Malta | No inheritance tax | Transfers: 5% real estate, 2% securities | European Regulation 650/2012 |
Andorra | None | Actual residence required | Andorran conflict rules |
Cyprus | Removed in 2000 | Substance and real presence | European Regulation 650/2012 |
Georgia | No standalone inheritance tax | 20% beyond 2nd class | Georgian conflict rules |
Panama | Removed in 1985 | Strict territoriality of income | Panamanian Rules of Conflict |
Portugal | 10% tax | Exemption for spouse, descendants, ascendants | European Regulation 650/2012 |
Singapore | Estate duty abolished in 2008 | Effective on-site management required | Singapore's conflict rules |
Bahamas | None | Cost of living and accessibility | Bahamian Rules of Conflict |
France (reference) | Tax rate up to 45% in direct line | Article 750 ter: three alternative criteria | European Regulation 650/2012 |
The rates and schemes indicated reflect the law applicable at the time of writing and are subject to change. They do not, under any circumstances, replace a case-by-case verification at the time of project implementation.
Testimony: A family with a heritage, living in Malta
A family, whose anonymity we are preserving, settled in Malta after the sale of a regional industrial group. The estate, almost entirely movable, was intended for three children, two of whom were still residing in France at the time of the move .
The initial analysis showed that the third criterion of Article 750 ter would negate most of the expected benefit for these two children. The plan was therefore developed over several years, aligning the timing of the gift-sharing arrangement with the children's own mobility plans . No decisions were made hastily.
A choice of inheritance law was formalized by will, and the ownership of the securities was reorganized around an asset management company with effective local governance. What the family gained from this process was not a higher interest rate, but the clarity of a structure that everyone understands .
Frequently Asked Questions
Is changing one's tax residence enough to escape French taxes?
No. Article 750 ter establishes three alternative criteria, and the deceased's departure only neutralizes one of them. Assets located in France and the French residence of the heirs continue to be subject to taxation, regardless of the place of death.
What is the difference between tax law and inheritance law?
Tax law determines which state can levy inheritance tax. Inheritance law designates the heirs and determines the distribution of assets. These laws can designate two different countries for the same inheritance.
Does the European regulation apply outside the European Union?
Regulation 650/2012 is binding on the courts of participating Member States, but the law it designates may be that of a third country. Conversely, an estate opened outside the European Union falls under the conflict-of-laws rules of the state concerned , which may lead to a different outcome.
Can a foreign trust help avoid French inheritance tax?
Not in the general case. Article 792-0 bis of the French General Tax Code (CGI) governs the taxation of trusts for inheritance and gift tax purposes and provides for a specific levy, subject to reporting requirements. A poorly structured trust can result in a higher tax burden than direct ownership .
Do you have to move the whole family for the strategy to work?
It's not essential, but the location of the heirs should be included in the analysis. The six-year rule (out of ten years) opens a window of opportunity that can be addressed , provided it's dealt with beforehand, not after the departure.
How does Coreway support work in this area?
The method remains the same five-step approach: discovery, analysis, recommendation, coordination, and implementation. Regarding inheritance matters, the coordination phase involves notaries, lawyers, and tax specialists from both jurisdictions . A personalized study is prepared upon request, following an examination of the individual's assets.
Conclusion
The transfer of assets is the most technical aspect of a relocation project, and the one whose effects are measured over the longest period. It is not simply a matter of a rate or a country, but rather the interplay between a residence, a family structure, and assets .
The ten jurisdictions covered by Coreway Consulting all have zero or minimal inheritance tax. The real variable to adjust lies elsewhere: in the location of the heirs, the nature of the assets, and the legal soundness of the chosen holding vehicle .
Study your transfer project
Each family structure requires a specific approach. You can study your estate planning with Coreway Consulting to compare your financial situation with the rules of the jurisdictions under consideration.
