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Compensatory Payment on a French Divorce: How Prestation Compensatoire Works

By Recording Law Editorial Team10 min read
Compensatory Payment on a French Divorce: How Prestation Compensatoire Works

Frequently Asked Questions

Is the compensatory payment always paid as a lump sum of capital?

In principle, yes. Article 270 establishes capital as the default form. A judge can order a lifelong periodic payment, a rente viagere, only exceptionally, under Article 276, by a specially motivated decision, when the recipient's age or health prevents them from meeting their own needs.

What article covers the rente viagere exception?

Article 276, not Article 274. Article 274 covers only the forms a capital payment can take, such as a lump sum or a transfer of property. The rente viagere is a separate, narrower exception under Article 276.

Can a judge refuse to award a compensatory payment?

Yes. Under Article 270, a judge can refuse if equity requires it, including when the divorce is pronounced at the sole fault of the spouse requesting the payment.

What does a judge consider when setting the amount?

Article 271 lists factors including each spouse's needs and resources, the marriage's duration, age and health, career sacrifices made for the household or the other spouse's career, the estimated patrimonial situation after the matrimonial regime is liquidated, and each spouse's retirement pension situation.

How is a capital payment taxed if paid within 12 months?

The paying spouse receives an income tax reduction equal to 25 percent of the amount fixed by the judge, capped at a base of 30,500 EUR, provided the capital is paid in cash within 12 months of the divorce judgment becoming final.

How is a capital payment taxed if paid over more than 12 months?

It no longer qualifies for the 25 percent reduction. Instead, it follows the pension alimentaire tax regime: the payments become deductible for the paying spouse and taxable as income for the recipient spouse.

Is a rente viagere taxed the same way as a capital payment made within 12 months?

No. A rente viagere always follows the pension alimentaire tax regime, deductible for the payer and taxable for the recipient, regardless of how long the payments continue.

Does the length of the marriage affect the compensatory payment?

It is one of the factors a judge must consider under Article 271, alongside the spouses' needs and resources, age and health, career sacrifices, patrimonial situation, and retirement pension situations.

Sources and References

  1. Code civil, article 270, purpose of the compensatory payment and capital as its default form(legifrance.gouv.fr).gov
  2. Code civil, article 271, criteria a judge weighs when fixing the compensatory payment(legifrance.gouv.fr).gov
  3. Code civil, article 274, forms the capital compensatory payment can take(legifrance.gouv.fr).gov
  4. Code civil, article 276, exceptional rente viagere form of the compensatory payment(legifrance.gouv.fr).gov
  5. Impots.gouv.fr, tax treatment of the compensatory payment, 25 percent reduction and pension alimentaire regime(impots.gouv.fr).gov
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