Inheritance Tax Advantages for French Investors in Monaco

For many French families, Monaco is not typically viewed as a destination for tax optimisation, given the well-known agreements between the two countries. Yet when it comes to inheritance, the Principality offers a set of little-known advantages that can make a meaningful difference to long-term legacy planning. These benefits do not arise from nationality or residency, but from how assets located in Monaco are treated. For French investors who value clarity, stability and thoughtful succession structuring, Monaco can quietly become one of the most strategic places to hold property.

A Real-Life Case: The French Family Seeking Better Protection for Their Heirs

One long-standing French client had been searching for a way to secure a smoother future for his children. Despite years of guidance from wealth managers and property agents, no one had ever mentioned how Monaco’s succession rules could work in his favour. When he arrived at Balkin – Knight Frank Monaco, he discovered advantages he had never been told about. Understanding that Monaco offered a clearer and more efficient inheritance framework, he quickly realised that investing in the Principality could significantly strengthen his family’s long-term legacy.

Key Advantage 1: Monaco’s Succession Rules Apply to Monaco-Based Property

Property located in Monaco is subject to Monaco’s own succession tax framework, regardless of the deceased’s nationality or place of residence. This is where one of the Principality’s most meaningful advantages appears: inheritance tax in direct line is set at 0%, a sharp contrast to the 20–45% rates applied in France. For French families who choose to hold assets such as houses in Monaco for sale instead of equivalent French property, this difference can represent an effective saving of around 30% for their heirs. It is not a general tax exemption, but a location-based benefit that can genuinely influence long-term legacy outcomes.

Key Advantage 2: The Five-Year Rule – When French Residents Gain Extra Flexibility

French nationals who have been living in Monaco for more than five years may access additional structuring options that are often overlooked. In some cases, French property held through a Monaco-based SCI may be subject to a different inheritance regime than under standard French rules. This is a nuanced area that requires precise legal and tax guidance, yet it can open the door to meaningful optimisation for families planning. Although little known, this framework allows long-term Monaco residents to organise their assets with greater clarity and stability for future generations.

Strategic Impact: Transforming an Investment into a Long-Term Legacy Plan

Recognising the advantages Monaco offered, the client chose to invest in property within the Principality to strengthen his family’s estate planning. Beyond potential inheritance savings, Monaco real estate offers asset stability, high liquidity, and access to professional management, ensuring investments are well cared for. Today, his properties generate a steady monthly income with minimal involvement on his part. This approach combines financial efficiency with peace of mind, allowing him to focus on family and long-term goals, confident that his investments are structured to support a lasting legacy for future generations.

A Smooth Future for the Next Generation

Thanks to Monaco’s succession framework, the client’s heirs will inherit his assets straightforwardly and efficiently, without facing direct-line inheritance tax. The process is more straightforward, clearer, and far less burdensome than under standard French rules, reducing administrative friction and uncertainty. By carefully structuring his investments within the Principality, he has created a legacy that delivers both security and continuity. Ultimately, this strategic approach ensures that his children can fully benefit from the wealth he has built, preserving the family’s financial future with confidence and peace of mind.