Have you just inherited some furniture and would like to know its value? Or has your solicitor recommended that you carry out a tax inventory to avoid the 5% lump sum? Don't panic, we'll explain the terms so that you can make informed decisions.
Should I ask an auctioneer for an inventory?
If the estate is in the process of being settled, a judicial auctioneer (now known as a commissaire de justice) and a notary may carry out an inventory of your furniture, regardless of whether or not you own any works of art.
The General Tax Code (article 764 I) provides for three options for valuing furniture as part of the inheritance:
1. The price of movable property obtained at public auction, when the sale takes place within two years of the death. In this case, there is no need to take any special steps, as the sale price will be used as the reference price for settling inheritance tax. This is the simplest solution if you know that you don't want to keep anything.
2. The estimate contained in an inventory: the auctioneer, in the presence of the notary and the heirs, makes an inventory of the movable property. When he visits the property, he draws up a descriptive and estimated list item by item. The total sum of this inventory is used to give the value of the furniture "in real terms". This is known as a tax inventory. The total retained by the auctioneer serves as a reference for calculating inheritance tax.
3. The 5% flat rate: in the absence of an inventory, the taxable value of the deceased's personal property will be estimated at 5% of the total estate assets. This means, for example, that if you inherit a property valued at €10,000 and a life insurance policy worth €50,000, the State will consider the personal property to be worth €7,500. With this calculation in mind, you can choose the most attractive option for your estate.
To sum up: inheritance tax on personal property is estimated at 5% of the total value of the estate. Movable property is often worth much less, and it is therefore preferable to opt for a tax inventory, which will reduce inheritance tax, or to sell everything, to pay inheritance tax on the amount sold.
The choice of inventory becomes compulsory when there is a minor or a protected person in the estate.
Depending on the value and nature of your movable and immovable assets, it may be preferable to choose one or other of these solutions.
As soon as the value of the personal property appears to you to be less than 5% of the value of the estate, it is strongly recommended that an inventory of the personal property be drawn up by an auctioneer.
MILLON's auctioneers can advise you on the solution best suited to your needs. They will come to your home with your notary to draw up the inventory.
How does the tax inventory work? Do I need to be present?
The auctioneer will draw up a handwritten list giving a brief description and a financial value for each item or group of items.
This value is that of the market price of the public auction at the time of the inventory.
All the heirs must be present, but they can be represented by giving a power of attorney to the notary.
How much does the inventory cost?
An estimate is provided in advance. The amount is calculated according to the location, volume and, where applicable, the nature of the number of items to be valued.
The estimate can be sent within 24 hours on request to the following email address: mdlh@millon.com