This article is provided for general information only and does not constitute legal, tax or financial advice. Rules change and individual situations differ. Always confirm the current position with a qualified professional before acting.
A widow in Bath, aged 65, owns a house near Uzès worth €500,000 and has two grown-up children. Her notaire suggests giving them the house now while she keeps the right to use it for life. The gift tax is worked out on a fraction of the value, and when she dies the children own it outright with no more French tax to pay. It sounds almost too neat, and for a family living in England it comes with questions the French paperwork doesn’t ask.
The technique is the démembrement de propriété, literally the dismembering of ownership, and the economy ministry’s guide to splitting ownership sets out the basics. Below we go through those basics, then add what an owner abroad needs on top: a worked gift-tax example, who pays for the roof, the wealth-tax catch, the rule that can pull the house back into the estate, and how HMRC sees the same deed.
Sources: articles 669, 751 and 1133 of the French tax code.
Two rights instead of one
Splitting ownership divides full ownership of an asset into two separate rights. The nue-propriété (bare ownership) is the right to dispose of the property without the use of it. The usufruit (usufruct) is the right to use and enjoy it, which means living there or collecting the rent. The Civil Code adds a condition the short version tends to leave out: the usufruitier (usufruct holder) enjoys the property like an owner but must preserve its substance (article 578). That’s why the usufruct holder can’t knock down the house or turn it into something else.
The split is used mainly in inheritances and gifts, though it can also be created by a sale. Full ownership is the two rights together, so selling the whole property needs both parties to agree. Each of them can sell their own right without the other’s consent, though. The usufruct holder may let the property, sell the usufruct or give it away (article 595). A sale of the property without the usufruct holder’s agreement leaves the usufruct in place.
Why families do it
It’s mainly a way of passing on property early. A parent gives the nue-propriété to a child and keeps the usufruit, so nothing changes in daily life. The gift tax is calculated on the tax value of the bare ownership alone, which can reduce it, depending on the parent’s age. When the usufruct ends on the parent’s death, or at the end of a fixed term, the child becomes full owner and no tax or duty is due on that reunion of the two rights (article 1133 of the tax code).
How the value is split: the official scale
For a life usufruct, which ends on the holder’s death, the tax value of each right comes from a scale based on the usufruct holder’s age at the date of the gift or the death (article 669 of the tax code). The younger the holder, the more the usufruct is worth.
| Age of the usufruct holder | Usufruct | Bare ownership |
|---|---|---|
| Under 21 | 90% | 10% |
| 21 to 30 | 80% | 20% |
| 31 to 40 | 70% | 30% |
| 41 to 50 | 60% | 40% |
| 51 to 60 | 50% | 50% |
| 61 to 70 | 40% | 60% |
| 71 to 80 | 30% | 70% |
| 81 to 90 | 20% | 80% |
| Over 91 | 10% | 90% |
A usufruct granted for a fixed term is valued differently, at 23% of the full value for each ten-year period of the term, whatever the holder’s age. The law adds “without fractions”, which practitioners read as counting a part-period as a whole one, so a 12-year usufruct is valued at 46%. The official simulator on service-public.gouv.fr works out both values for you.
One correction to the way the scale is sometimes presented. In the tax code, it’s a scale for gift and inheritance duties. When the whole property is sold, the Civil Code splits the price according to the respective value of each right, unless the parties agree to carry the usufruct over onto the sale price (article 621). Families can use the tax scale to agree that split, but the Civil Code doesn’t require it.
A worked example for a parent abroad
French gift tax applies to property in France whatever the donor’s country of residence (article 750 ter of the tax code). Back to our widow in Bath. She’s 65, sole owner of a €500,000 house, and gives the nue-propriété to her two children in equal shares. We assume she has made no other gifts to them in the past 15 years and that the value doesn’t change, and we leave out notary fees and land-registry charges. This is the French tax only. The UK side comes further down.
| Per child | Gift of full ownership | Gift of bare ownership, usufruct kept |
|---|---|---|
| Value taxed | €250,000 | €150,000 (60% of €250,000) |
| Parent-to-child allowance | €100,000 | €100,000 |
| Taxable | €150,000 | €50,000 |
| French gift tax | €28,194 | €8,194 |
The saving depends on her age. At 55 the bare ownership would be valued at 50%, cutting each child’s tax to €3,194. At 75 it would be valued at 70%, and each child would pay €13,194. The €100,000 allowance applies per parent and per child, and it renews every 15 years, because gifts more than 15 years old are left out of the calculation (article 784). Our guide to French inheritance law covers the full rate tables and how forced heirship fits around a gift like this.
Who pays for what: the 1804 rules
The usufruct holder must look after the property and carry out routine repairs (article 605 of the Civil Code). They bear all the annual charges, such as taxes (article 608), and the taxe foncière (property tax) is assessed in their name (article 1400 of the tax code). The bare owner must let them use the property, within the limit of preserving its substance, and pays for the grosses réparations (major repairs), unless these were caused by a lack of upkeep since the usufruct began.
What counts as major is a short list. The Civil Code lists main walls and vaults, the replacement of beams and of entire roofs, and retaining and boundary walls rebuilt in full. Everything else is routine (article 606). Neither party has to rebuild what has fallen down through age or been destroyed by accident (article 607).
| Cost | Who pays by default |
|---|---|
| Upkeep and routine repairs: a leak, repainting, servicing | Usufruct holder |
| Taxe foncière and other annual charges | Usufruct holder |
| Main walls, vaults, beams, an entire roof, retaining and boundary walls in full | Bare owner, unless poor upkeep caused it |
| Rebuilding what fell down through age or was destroyed by accident | Neither is obliged to |
These are default rules, so check whether the deed says anything about repairs and charges, and ask the notaire to spell it out before anyone signs. For a family spread across two countries, a roof that needs replacing on a house the parent uses and the children own is exactly the conversation to have in advance.
Flats and lettings: who votes, who signs
In a copropriété (a building in shared ownership), the usufruct holder and the bare owner are represented at the general meeting by the bare owner unless they agree otherwise (article 23 of the 1965 law). A parent who keeps the usufruct of a flat can therefore find the child holding the vote, so agree in writing who attends and votes. Our guide to the copropriété AGM explains how proxies work when you can’t be there.
The usufruct holder can let a home on an ordinary residential lease alone. Leases they sign alone for more than nine years bind the bare owner, once the usufruct ends, only for the rest of the current nine-year period. A commercial or rural lease needs the bare owner’s agreement, or a court’s authorisation (article 595). Our article on who can sign a French lease covers what happens to the tenant when the usufruct ends.
The wealth-tax catch
Giving away the bare ownership doesn’t take the property out of the parent’s impôt sur la fortune immobilière (IFI, the French wealth tax on property). The usufruct holder declares the full value (article 968 of the tax code). The value is only split between the two of them in a few listed cases, such as a surviving spouse’s statutory usufruct, a sale with the usufruct reserved where the buyer isn’t one of the seller’s heirs, or a gift to the State or a public-interest body.
Non-residents pay IFI on their French property when its net value is over €1.3 million (article 964). If that’s you, the gift won’t reduce your IFI while you hold the usufruct. Our IFI guide explains the rest of the calculation.
The rule that pulls the house back into the estate
French tax law presumes, until proved otherwise, that a property belongs in full to the estate of a deceased usufruct holder when the bare ownership is held by one of their presumed heirs (article 751 of the tax code). The presumption doesn’t apply to a regular gift made more than three months before the death. It also doesn’t apply to a split made by way of gift by notarial deed more than three months before the death, with the bare ownership valued on the article 669 scale.
In practice, the clean route is a gift signed before a notaire, made well ahead of time. A family that instead buys a property split, with the parent buying the usufruct and the child the bare ownership, should expect the tax office to treat the whole value as part of the parent’s estate. The child then has to prove otherwise. The law gives one example: a gift of the money to buy the bare ownership, recorded in a deed with a certain date more than three months before the death, with the purchase deed showing where the money came from.
How the usufruct ends
The usufruct ends on the holder’s death or at the end of the agreed term. The bare owner then becomes sole owner and can live there, let the property or sell it. The Civil Code lists three more endings: the two rights coming into the same hands, non-use for thirty years, and the total loss of the property (article 617). A usufruct granted to anyone other than an individual, such as a company, lasts no more than thirty years (article 619).
Only the first two endings are tax-free under article 1133. Selling the usufruct to the bare owner, or simply giving it up, is a separate transaction that can be taxed. Capital gains tax applies to a sale of split property too, and our guide to capital gains for non-residents explains how it works when you live abroad.
The UK side: HMRC may read the deed as a trust
This is where a French plan can go wrong for a parent living in Britain. In its Inheritance Tax Manual, HMRC says it treats a usufruct as a settlement for inheritance tax, much like a life-interest trust with the bare owners holding the property for the usufruct holder. For a usufruct created on or after 22 March 2006, HMRC says the donor makes an immediately chargeable transfer of the full value of the property when it’s created. It adds that a donor who keeps the usufruct may well have reserved a benefit. It values the property at its open market value and ignores the French scale.
HMRC also acknowledges that its treatment isn’t universally accepted. The manual reports one leading commentator calling it a toss of a coin, and it sends cases where the taxpayer disagrees to its technical specialists. The question is open, then, and a family can’t simply rely on the French valuation.
Whether it touches you depends on your UK status. Since 6 April 2025, non-UK assets are within UK inheritance tax if you’re a long-term UK resident, which broadly means UK tax resident for 10 of the previous 20 years. Before that date, the test was domicile. A gift is also a disposal for UK capital gains tax, at market value on the date of the gift. A parent living in the UK should therefore have a UK adviser look at the deed before signing it in France, and shouldn’t assume the French saving survives on the UK side.
Before you sign a démembrement from abroad
Who pays for the roof? The default rules are in articles 605 to 607 of the Civil Code. Ask the notaire what the deed says.
Who votes at the AGM? In a copropriété, the bare owner does unless you agree otherwise.
Will you need a commercial lease, or one longer than nine years? Then the bare owner’s agreement matters.
Is IFI in play? The usufruct holder still declares the full value, outside the listed exceptions.
Is it a gift by notarial deed, valued on the official scale, made well ahead? That keeps the article 751 presumption away.
Have you used the €100,000 allowance in the past 15 years? Earlier gifts count against it.
What will HMRC make of it? If you’re a long-term UK resident, take UK advice on the same deed first.
Our view
French law makes this route attractive by design: tax on a fraction of the value now, and nothing more when the parent dies. The weaker parts are older and less visible. The repair rules date from 1804, so items they never mention, such as a boiler or a façade render, have to be argued case by case. The wealth-tax rule taxes the parent on value they’ve given away. For families in Britain, the bigger gap is between two tax systems that read the same deed in different ways, with HMRC itself admitting the answer is contested. A deed that works perfectly in Uzès can still be the wrong one for a parent in Bath.
Readers, have you given or received the bare ownership of a French property while living in the UK, and did anyone raise the HMRC view before the deed was signed? Who paid when the first big repair came along? Would you rather split ownership this way or use an SCI, which our SCI or direct ownership guide compares?
FAQ: usufruct and bare ownership in France
What is démembrement de propriété?
It’s the split of full ownership into two rights: the usufruit, the right to use the property or collect its rent, and the nue-propriété, the right to dispose of it. It arises on a death or through a gift, typically when a parent gives the bare ownership to a child and keeps the usufruct.
How are usufruct and bare ownership valued for French tax?
For a life usufruct, by the scale in article 669 of the tax code, based on the usufruct holder’s age: at 61 to 70, the usufruct is 40% and the bare ownership 60%. A fixed-term usufruct is valued at 23% of the full value for each ten-year period.
Who pays the taxe foncière on a split property?
The usufruct holder. The tax is assessed in their name, and they also bear routine repairs and other annual charges. The bare owner pays for major repairs such as an entire roof or main walls.
Is French tax due when the usufruct ends on death?
No tax or duty is due when the usufruct ends on the holder’s death or at the end of its term. If the bare owner is an heir, the split should come from a gift by notarial deed made more than three months before the death, or the tax office can presume the property belongs to the estate.
How does HMRC treat a French usufruct?
HMRC’s published view is that a usufruct is a settlement for UK inheritance tax. For one created on or after 22 March 2006, HMRC says creating it is an immediately chargeable transfer of the property’s full open-market value. HMRC accepts this view is contested, so take UK advice if you’re a long-term UK resident.
