Inheritance and gifts between France and Andorra: who taxes what?

Is there inheritance tax in Andorra?

No. Andorran law has neither inheritance tax nor gift tax. The income tax law (IRPF) expressly excludes from its scope assets received by inheritance, legacy or gift, as well as life insurance benefits paid to a beneficiary other than the policyholder (Llei 5/2014, art. 4.4). The deceased’s unrealised capital gain is not taxed either (art. 5). Only a gift to someone who is not a close relative can cost anything:

Law of 29 December 2000 on ITP (art. 1, 3, 4.5 and 8) and Llei 5/2014 on IRPF (art. 5 and 27). Close relatives: spouse, stable partner, relatives in the direct or collateral line up to the third degree; the donee then takes over the donor’s acquisition value and date.

Inheriting property in Andorra

The foreign property investment tax does not reach a non-resident heir either: the law exempts acquisitions on death, which do not require prior foreign investment authorisation, as well as gifts between spouses, partners and relatives up to the second degree (Llei 3/2024, art. 4). The resale of an inherited property then follows the rules on capital gains on property in Andorra. See also all the taxes in Andorra.

When does France tax? The three cases of Article 750 ter

France does not tax inheritances according to nationality, but according to the tax domicile of the deceased or donor, that of the heir or donee, and where the assets are located. Article 750 ter of the French General Tax Code distinguishes three cases:

Domicile is understood within the meaning of Article 4 B, with no treaty to settle conflicts: a parent living in Andorra whose home or economic interests have remained in France falls under the first case, for all their assets. The criteria are set out in our guide to tax residency, and the departure itself in leaving France for tax purposes.

The 6-out-of-10-year rule

The third case concerns the heir, donee or legatee who is domiciled in France for tax purposes when they receive the assets, and who has been so for at least six of the ten years preceding the year of the transfer. Both conditions must be met. Where the deceased or donor lived in Andorra:

• a child living in Andorra is taxed in France only on assets located in France, whatever their past in France;
• a child domiciled in France for fewer than six of the last ten years is likewise taxed only on assets located in France;
• a child long settled in France is taxed on their whole share, Andorran assets included.

The rule also applies to gifts received from a parent living in Andorra, whatever the asset given.

No France⁠–⁠Andorra treaty on inheritance

The 2013 France⁠–⁠Andorra tax treaty only covers taxes on income. The official list of treaties concluded by France mentions only this text for Andorra, whereas France has signed treaties specific to inheritances and gifts with other countries, such as Germany. Nothing therefore limits the application of Article 750 ter.

That leaves the tax credit under French law: in the first and third cases, inheritance and gift tax paid abroad is credited against French tax, up to the amount of French tax relating to the assets located outside France (Article 784 A). As Andorra levies no tax on inheritances or on family gifts, this credit is nil: Andorran assets received by an heir domiciled in France bear French tax in full. Whether the ITP paid on a gift of real property to a third party can be credited is not settled by the legislation: have it checked.

Worked example: one child in France, the other in Andorra

Hélène, a widow of French nationality, has been domiciled in Andorra for tax purposes since 2015 and dies there in 2026, without having made any gifts. She leaves a flat in Andorra (€700,000), securities of non-French companies deposited with an Andorran bank (€500,000) and a flat in Lyon (€400,000). Her two children inherit in equal shares: Claire has lived in Lyon for twenty years, Marc has lived in Andorra since 2012.

Indicative calculation: share received (Claire) or half of the Lyon flat (Marc), less the allowance of €100,000 per child, then the direct-line scale of Article 777. Excluding debts, costs and earlier gifts. Tax due in Andorra: €0.

And if the mother had remained domiciled in France?

If Hélène had remained domiciled in France for tax purposes, for example because her home had stayed there, the first case would apply: each child would be taxed on their €800,000, i.e. €305,924 in tax in total. The difference lies in the domicile of the mother and of each child, not in nationality. This is a point to plan for if you want to live off your capital in Andorra with children who have stayed in France.

Life insurance: the two French regimes

In France, life insurance benefits paid on death follow two regimes, depending on the insured person’s age when the premiums were paid:

The Article 990 I levy covers sums that do not fall within the scope of Article 757 B.

The Article 990 I levy applies if the insured person was domiciled in France for tax purposes at death, or if the beneficiary is domiciled there at the time of death and has been so for at least six of the previous ten years. For an insured person living in Andorra, a beneficiary child long domiciled in France is therefore subject to it; a child who lives in Andorra is not. Sums under Article 757 B, for their part, fall under inheritance tax, and therefore under the three cases of Article 750 ter. In Andorra, these benefits escape income tax provided the beneficiary is not the policyholder.

Which civil law applies? EU Regulation, reserved share and legitim

Tax law does not say who inherits: that question is governed by the civil law applicable to the succession, which France and Andorra do not determine in the same way.

For a French national who lives in Andorra, the two systems can converge on French law. The Regulation, which applies to deaths occurring since 17 August 2015, designates Andorran law as the law of habitual residence; but Andorran law refers back to national law, and the Regulation accepts this renvoi to French law. The Andorran courts, for their part, apply national law directly. An express choice of French law in a will secures this outcome, subject to the deceased being “manifestly more closely connected” with another country, which both texts allow to be invoked: have this arrangement validated by a notary.

Reserved share and compensatory deduction

Since 1 November 2021, Article 913 of the French Civil Code has allowed each child to make a compensatory deduction from the assets located in France, where the deceased or one of the children is a national of a European Union State or lives there, and the applicable foreign law “does not allow any reserved-share mechanism protecting children” (free translation). Andorran law provides for a legitim of a quarter: if it applies, the condition seems difficult to meet, but we have not found any decision settling the point.

Declaring the estate in France: deadlines and the competent office

Where France is entitled to tax, the inheritance tax return (forms 2705, 2705-S and 2706) is filed together with payment of the tax:

1. 1

   Within 6 or 12 months

   Six months from the death if it occurred in France, twelve months in other cases, and therefore for a death in Andorra.

2. 2

   With the Recette des non-résidents

   For a deceased person domiciled outside France, the return is filed with the directorate for non-resident taxation in Noisy-le-Grand.

3. 3

   Except for small estates

   No return is required if the gross assets are below €50,000 for heirs in the direct line, a spouse or a PACS partner (French civil partnership) who have not received from the deceased any gift that was not registered or not declared, or below €3,000 for other heirs.

For the other differences between the two countries, see our comparison of Andorra vs France taxes; the comparison tool calculates income tax.

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Income tax in France and in Andorra on the same taxable income, with every assumption shown.

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Common misconceptions about France⁠–⁠Andorra inheritance