An inheritance can seem resolved on paper and yet turn into a heavy problem because of an administrative detail. When tax benefits depend not only on the reality experienced, but also on the way that reality is registered with the State, a simple outdated address can end up having a huge cost. It was based on this last situation that a French pensioner was forced, after receiving an inheritance, to pay almost half of it in taxes.
This was the situation reported by the Spanish digital newspaper. A retired man in France thought he had the conditions to inherit from his sister without paying inheritance tax, but ended up being asked to pay around 305 thousand euros because the coexistence between them was not formally reflected in the deceased’s official address.
Detail that caused the exemption to fall in France
In France, the legal basis for this exemption is in article 796-0 ter of the Code général des impôts. The rule provides that the hereditary share of each brother or sister may be exempt from inheritance tax if the heir is single, widowed, divorced or separated, is over 50 years old or has a relevant disability, and has been constantly domiciled with the deceased during the five years prior to death. The French tax administration details the same criteria in BOFiP, the official public finance bulletin.
The decisive point is precisely the notion of “domicile”. In a ruling dated March 12, 2025, the French Cour de cassation confirmed that, for the purposes of this exemption, it is not enough to prove a de facto coexistence: the brother or sister must have established their main establishment in the same location. It was this restrictive reading that gave legal force to the idea that mere cohabitation, without a clear correspondence in official records, may not be sufficient to benefit from the exemption.
According to the same source, the sister never made the change of address official, continuing administratively linked to Paris, and that this led the administration to refuse to prove fiscally relevant cohabitation.
How the R$305 thousand comes about
The value also matches current French rules. When the exemption in article 796-0 ter does not apply, article 779, IV, of the Code général des impôts provides for a deduction of 15,932 euros for successions between siblings, and article 777 sets taxation at 35% up to 24,430 euros and 45% above that amount.
Noticias Trabajo reports a net inheritance of 700 thousand euros and explains that, after the legal deduction, a 45% rate was applied to the taxable part, which led to a charge close to 305 thousand euros.
In Portugal, would it be the same?
In Portugal, the framework is different. The relevant tax on free transfers is Stamp Duty, and the Stamp Tax Code exempts the spouse or partner, descendants and ascendants on free transfers subject to item 1.2 of the General Table.
This same item 1.2 sets, as a rule, a rate of 10% on the free acquisition of goods. This means that siblings do not benefit from the exemption reserved for direct heirs and, in principle, are subject to the applicable taxation.
In other words, unlike the French case, in Portugal it is not the coexistence between siblings that opens the door to an inheritance exemption of this type. The decisive factor is the degree of kinship provided for in the Stamp Tax Code. Therefore, an heir brother is not exempt just because he lived with the deceased, even if this coexistence lasted for years.
Updating your tax address matters
Still, updating your tax address continues to be important in Portugal. The General Tax Law establishes that communication of tax domicile to the tax administration is mandatory and that the change of domicile is ineffective until it is communicated.
In terms of sanctions, the RGIT provides for a fine of 75 to 375 euros for failure to present or present declarations or registration forms after the legal deadline or updating the elements of the taxpayer number of individuals.
In Portugal, therefore, the outdated address does not have the same automatic effect on the exemption between siblings that appears in the French case, but it can create failed notifications, procedural delays and tax infractions of its own.
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