1. Estate Taxation in Monaco
i. Lifetime gifts
Tax on lifetime gifts only applies to assets that are situated in Monaco, regardless of the domicile, residence or nationality of the donor. Rates vary from 0 % to 16% depending on the family relationship.
Tax on inheritance only applies to assets that are situated in the Principality of Monaco, regardless of the domicile, residence or nationality of the deceased person or donor. Rates vary from 0 % to 16% depending on the family relationship.
iii. Wealth tax
Monaco does not have a wealth tax, although French wealth tax may be applicable to certain French nationals who are resident in Monaco.
2. Succession Planning in Monaco
i. Applicable law
Monaco applies the law of the country where the deceased was domiciled. The deceased has the option to choose the law of their nationality through a Will (Law No. 1448 of June 28, 2017).
ii. Wills in Monaco
In Monaco, it is possible to organize the transmission of your estate through a Will which must comply with a certain number of rules.
iii. Restrictions on freedom of disposition
Under the Monegasque forced heirship rules, a certain portion of the estate (hereditary reserve) cannot be disposed of by lifetime gift or will other than to descendants and, under certain conditions, to the ascendants.
Under Monaco International Private Law there is an exemption to the forced heirship rules in the event that the national law of the deceased does not recognise forced heirship.
3. Trusts and Foundations in Monaco
Monaco enacted special legislation (Law No. 214 of 1936) designed to recognise trusts and allow certain foreigners (generally national of common law countries) who are resident in Monaco to take advantage of their national law, which enables them to create trusts either during their lifetime or by a will. Foreign trusts are recognized in Monaco. Monaco has signed and ratified the Hague Convention on the applicable law and recognition of Trusts of 1 July, 1985.
Monaco Foundations cannot be used in Monaco for estate planning purposes but only for a general interest purpose and have to be authorized by the government.
4. Matrimonial Issues in Monaco
The future spouses can get married with or without a contract of marriage. If they get married without a contract of marriage, the regime of the separation of goods will be apply automatically.
They can also make the choice of another regime (community reduced to acquisitions) through a contract.
Monaco has legalized the “contrat civil de solidarité”. This Monaco civil partnership contract regroups two types of contract :
- “Contrat de vie commune” reserved for couples of different sex living in the form of a common-law relationship;
- “Contrat de cohabitation” can be concluded by two members of the same family living together.
For more details of Rosemont’s Estate Planning and International Private Law services see https://rosemont-int.com/en/article/tax-estate-planning/estate-planning-en
Please contact your local Rosemont office for assistance firstname.lastname@example.org.