Crypto: The legal rules on inheritance

The world of cryptocurrency is now the subject of massive investment by institutions, but also by individuals. It is therefore logical that the tax and legal question of inheritance arises. Each investor must be alerted to the current legal framework to avoid unpleasant surprises in the event of inheritance. A question arises for the investor reasoned. This consists of knowing whether the succession in cryptocurrencies is subject to inheritance tax and to what extent.

Cryptocurrencies: taxable inheritance deeds

Some may consider that the blockchain would make it possible to escape the tax administration. Indeed, cryptocurrencies are in essence decentralized and in this sense allow anonymity. However, to enjoy their inheritance, those concerned can convert cryptocurrencies into fiat currency. In this case, the bank will ask them about the origin of the sums resulting from this conversion before crediting them to their bank account. Therefore, it is preferable to mention them in the declaration of inheritance and anticipate the amount of inheritance tax they will be liable for, if applicable.

In 2014, the tax authorities specified in their doctrine that virtual units of account stored on electronic media are part of taxable assets. Thus, these cryptocurrency accounts must be included in the declaration of succession to be filed within six months of death. In the event that the estate is taxable in France, these accounts must be subject to French inheritance tax.

Inheritance tax: exceptions exist

Article 750 ter of the General Tax Code governs the rules of territoriality in matters of inheritance tax. There are two reasons which lead to the domicile of the deceased in France. Either the deceased was domiciled in France, or the deceased was domiciled outside France, but the heir was domiciled in France for at least six of the ten years preceding the date of death, or because the crypto account is held in France .

To avoid French inheritance tax, the account must be held outside France by a deceased domiciled outside France. However, an additional condition exists. The heir must be domiciled in France for less than 6 years during the 10 years preceding the death. If this condition is not fulfilled, the amount due in France will be determined by applying the tariff to the value of the account subject of the succession. In the event of inheritance, it is therefore recommended to deal with a tax lawyer.

To approach the subject from a more practical point of view, the reading of this article is strongly recommended.

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