According to current estimates, nearly 1.3 million French retirees are moving abroad. There are many reasons for leaving: a desire to enjoy the sun, to fulfill a dream, to change the air, to benefit from a higher purchasing power or a more favorable tax regime. Mauritius is one of the most popular destinations in recent years. In the heart of the Mascarene Archipelago, in the Indian Ocean, it seduces by its climate, its idyllic landscapes, its exceptional living environment, its geographical location… and its taxation regulations. Especially since for retirees, there are some tax advantages, especially in terms of inheritance and donations. Two decisive points when you no longer work and you are already thinking about the future and that of your descendants. However, in order to be able to retire in Mauritius, there are some conditions to be met. Similarly, it is essential to find out about the tax rules concerning donations and inheritances before considering such acts.
Moving to Mauritius for retirement is not something to be improvised. Certain steps must be taken and conditions respected. First of all, it is necessary to apply for a retirement permit, valid for 3 years and renewable. To obtain it, you must be over 50 years old and transfer a minimum of US$30,000 to a Mauritian bank account each year with an initial deposit of US$2,500. The administration also requires a medical certificate. Similarly, to obtain this residence permit as a pensioner, a form must be completed and accompanied by supporting documents including a passport, a copy of the last entry visa, an extract from a criminal record and 4 passport photos. This permit does not allow its holder to work and be paid by a Mauritian company.
Retirement abroad has consequences for the transmission of your heritage. In Mauritius, the provisions of the Civil Code applicable to donations are quite similar to those of the French Civil Code. But to avoid contradictions and concerns, it is recommended to indicate in the deed of gift the applicable law. Moreover, in the bilateral agreement signed by France and Mauritius, there is no mention of this transaction. As a result, it is taxed in France. There is no double taxation since the Mauritian tax system does not mention anything about taxes on direct online donations.
In the case of an estate, when a pensioner becomes a tax resident of Mauritius and wishes to transfer his property to a descendant, or in the event of death, the applicable tax rate depends on the place of residence of the heir or donee. If the heir lives in France, he/she pays inheritance tax in France. On the other hand, if he is a Mauritian tax resident, the Mauritian rules apply and he is exempt from inheritance tax.
Therefore, in order to benefit from the advantages of double taxation, the owner of real estate in Mauritius and his or her direct line heirs must be Mauritian tax residents. In case of doubt, we advise you to consult a notary to avoid any tax concerns.