Does a French resident pay French inheritance tax on an estate inherited from Israel?

A French resident inheriting an apartment in Jerusalem or a bank account in Tel Aviv often arrives with a reassuring half-truth: "Israel has no inheritance tax." That part is correct. What it misses is that France does have inheritance tax, and France taxes its residents on what they receive, including assets that come from abroad. The tax exposure on an Israeli inheritance is frequently French, not Israeli.

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Detailed Answer

Israel repealed its Estate Duty Law in 1981, and there has been no Israeli inheritance or estate tax since. The assets in an Israeli estate — real property, bank deposits, securities — generally transfer to the heirs without any Israeli death duty, once the Registrar of Inheritance (Rasham HaYerushot) has issued a succession order or will execution order. What an heir does face in Israel is process and incidental cost (the probate order, Land Registry re-registration, and any capital gains exposure if the inherited asset is later sold), but not a tax on the act of inheriting.

France is different. French succession duty (droits de succession) is charged under the Code général des impôts, and the French rules look primarily at residence. Where the heir has been resident in France for at least six of the ten years before the inheritance, France taxes that heir on the worldwide assets they receive, including assets located in Israel. Where the deceased was French-resident, France taxes the estate's worldwide assets as well. So a French-resident child inheriting from an Israeli-resident parent can be drawn into French tax on the Israeli assets even though Israel itself imposes nothing. The rates depend on the relationship: direct-line transfers (parent to child) benefit from an allowance and a progressive scale rising to 45%, while more distant relatives and unrelated heirs face much higher rates.

This produces an asymmetry that catches French heirs out. In a normal cross-border inheritance, the heir pays tax in the asset's country and claims a credit at home for the foreign duty. Here, because Israel levies no inheritance tax, there is usually no Israeli duty to credit against the French droits de succession. The French liability therefore tends to stand at its full amount. France does grant relief in some situations for tax actually paid abroad on foreign-situated assets, but with no Israeli inheritance tax paid, that relief commonly has nothing to bite on. The Franco-Israeli tax treaty of 1995 chiefly addresses income and capital taxes rather than succession duties, so heirs should not assume it eliminates the French charge.

For the non-resident heir the practical task is twofold: complete the Israeli succession process to obtain and transfer the assets, and separately declare and pay any French droits de succession through a French notaire within the French filing deadline. The two systems run in parallel and on different timetables. The Israeli side — obtaining the order from abroad and repatriating funds — is set out in the guide on transferring inherited funds from Israel, while the French declaration is handled under French procedure.

In Practice: Israel imposes no inheritance tax (the Estate Duty Law was repealed in 1981), so the Registrar of Inheritance (Rasham HaYerushot) transfers Israeli assets without death duty, the succession order costing NIS 543 plus a NIS 136 publication fee and issuing in about 3 to 5 months. France, by contrast, charges droits de succession on a French-resident heir's worldwide inheritance at direct-line rates up to 45%, declared to the French tax authorities via a notaire generally within 6 months of death (12 months where the death occurred outside France) — with little or no Israeli duty available to credit against it.

Key Considerations

• Israel has charged no inheritance or estate tax since 1981, so the Israeli assets pass without death duty
• France taxes a French-resident heir on worldwide assets received, including those from Israel
• Direct-line French rates rise to 45%, with higher rates for distant or unrelated heirs
• Because Israel levies no inheritance tax, there is usually no foreign duty to credit against the French bill
• The French declaration runs on its own deadline through a notaire, separate from the Israeli probate

When to Consult a Lawyer

This question typically requires professional legal advice when:

• You are a French resident inheriting significant Israeli real estate or financial assets
• The deceased held assets in both France and Israel and the two estates must be coordinated
• You need to plan a future Israeli bequest to French heirs in a way that manages the French succession-duty exposure

A qualified Israeli inheritance attorney working alongside a French notaire can sequence the Israeli probate and the French declaration so neither deadline is missed.

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Speak With an Israeli Attorney

The danger for French heirs is assuming "no Israeli inheritance tax" means no tax at all. We handle the Israeli succession order and asset transfer and coordinate with your French notaire so the French duty is declared correctly and on time.

Contact us for a confidential initial consultation.