When a “dummy” civil partnership allows you to avoid inheritance tax

LThe tax administration must act within specific periods when it “takes back” a declaration that contains errors or omissions to correct them: six years, when it must carry out cross-checks to understand the taxpayer’s situation; three years, only if it has the necessary requirements immediately (Articles L. 186 and L. 180 of the Tax Code Book).

If she misses the deadlines, her action is time-barred, as the following case shows. 1ahem In August 2014, the financial administration received the declaration of inheritance from Mr. X, who died in February, as well as the will of the deceased. He, a childless widower, appoints his brother universal legatee. He bequeaths to his nurse, whom he “regarded as (her) girl”and that his wife also considered “like your own family”the amount of 310,000 euros, “to which may be added the sale of the contents of (his) apartment”.

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The declaration of inheritance states that Mr.me Y, 60 years, eight days before death. Which allows Mme Y benefit from the exemption from the transfer tax at death, as provided for in Article 796-0 bis of the General Tax Code.

However, on January 16, 2018, the administration demanded… 347,535 euros, which includes 60% of the right to transfer between non-parents (177,133 euros), default interest (28,696 euros) and fines for “abuse of the law” (141,706 euros) .

No life together

He claims that the civil partnership was “fictitious”because he concluded with a goal“avoid” these rights, not in the right to organize as required by the Civil Code (515-4), and “common life”an idea that assumes “in addition to common residence and life as a couple”as specified by the Constitutional Council on November 9, 1999 (99-419). In reality, the administration shows, the homes of civil partners were different. Moreover, their relationship had a nature “subsidiary” and none “sentimental”which precluded any life as a couple.

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Mme Y opposes the statute of limitations: his right to “renew” can only be exercised until the end of the third year after the declaration, i.e. until 31 December 2017, he acted with a sixteen-day delay. The administration responds that it needs further investigations to assess the fictitious nature of the civil partnership, justifying the six-year delay.

The court ruled him wrong at first instance and then on appeal: the declaration of inheritance and the will already allowed him to prove the fictitious nature of the civil partnership, taking into account the two addresses of the civil partners, their age difference and the nature of their relationship. Only further investigation “confirm” these elements, as claimed by ME Géraud Mégret, lawyer Mme Y to the Court of Cassation. The appeal of the Administration is hereby dismissed, on May 29 (2024, 22-24.008): Mme Y can keep his legacy.

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