I have already posted commentaries on the French prélèvement
compensatoire, which is designed to extend the effect of
French forced heirship rights over successions generally allowing a
clawback from French assets to the extent that a child resident in
France of the EU is not given an equivalent reserved share
under an applicable foreign law.
On of the main theoretical objections to the French
prélèvement compensatoire was that the Regulation overrode
the application of French law where therewas either a choice of
English law in the disposition under article 22, or applying the
English law as the law of habitual residence of the deceased under
However, the Court of Justice of the European Union has
confirmed in a recent preliminary ruling C‑277/20 o a reference
from an Austrian Court (French version available) that the Succession
Regulation does not apply to liberalities made otherwise than by
succession. In other words it does not apply to lifetime gifts. But
that is not the end of the story as the Considerant (14) to which
the Court referred has a further sentence which was not relevant to
the Court's ruling and which was not cited in full.
I will set the consequences of this out here.
Were an English parent to make an inter vivos gift
(technically outside the scope of the Regulation), that would not
benefit from the Succession Regulation's protection, as the gift
would itself fall outside its scope: by virtue of the first
sentence of Considerant 14 which the CJEU set out:
(14) Property rights, interests and assets created or
transferred otherwise than by succession, for instance by way of
gifts, should also be excluded from the scope of this Regulation.
That notwithstanding, the issue does not end there.
The Considerant continues:
…. However, it should be the law specified by this
Regulation as the law applicable to the succession which determines
whether gifts or other forms of dispositions inter vivos giving
rise to a right in rem prior to death should be restored or
accounted for for the purposes of determining the shares of the
beneficiaries in accordance with the law applicable to the
The CJEU did not address this point in its ruling as it was not
relevant to the Austrian donatio mortis causae before
In other words, if English law is applicable to the French
succession under article 20, either through the nationality option
under article 22 or by virtue of the habitual residence of the
deceased under article 21, Considerant 14 states in effect that the
prélèvement compensatoire (introduced after the Regulation
came into force) should not be applied to any prior gifts in
rem where the succession is governed by the law governing the
succession to a right in rem over the immovable. In other
words the only clawback permitted under the Regulation would be a
clawback permitted by English law over lifetime gifts of rights
in rem over immovable property, not under French law.
There is no such clawback under English law, and the somewhat
remote Inheritance (Provision for Family and Dependants) Act 1975
may not be applicable were the deceased to be domiciled outside the
Lifetime gifts of rights in rem such as the
nue-propriété of immovables with retention of a
usufruit are frequent under French law on the
recommendation of a notaire in wealth and succession
planning. The question is, how far can a disgruntled heir go in
asserting the new prélèvement against French property in
the context of an international succession where they have not
received the equivalent of the French reserved rights over the
whole international succession? In legal terms Can France outstare
the Regulation and the second sentence of Considerant 14?.
Normally, as I have pointed out elsewhere, children who are not
EU nationals or who do not reside in the EU cannot take advantage
of the French prélèvement successoral under article 913
Code civ. to undo their deceased parent's succession
engineering in France. However, where one of their siblings does so
qualify, they all can benefit from the domestic French changes.
The question is does the Succession Regulation provide the final
answer? Contact me for advice on the issue.
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