Senior Partner at Blevins Franks.
Blevins Franks has been providing specialist, professional advice for over 40 years and have earned a reputation as the leading international tax and wealth management advisers to UK expatriates living in France. The French tax system is different to that of the UK, and the interaction between each country’s tax laws means there are some important facts for you to be aware of. We have set out 5 top tips for you to consider if you are buying a property in France or looking to relocate there:
Tax Residency – Be aware of the French tax residency rules. Become tax resident, and you become liable to French taxes on your worldwide income and gains. If you continue to spend time in the UK, you could retain UK tax residency and be liable to taxes in both jurisdictions.
Pensions – If you are intending to retire to France, it is crucial you take advice on the tax treatment of pension income and lump sums before you take any benefits from your pension fund. Otherwise, you could miss out on important tax savings.
Investing Tax Efficiently – Taxefficient investments in the UK like ISAs are not tax efficient in France – you will have to pay French tax and social
charges on any income and gains. You will need to take steps to place savings and investments in French compliant tax-efficient structures.
The “Foyer” System – The “foyer” or “household” system shares the income of the household amongst all its members. This avoids one family member being taxed at the highest rates, and another failing to fully utilise their tax-free allowances. Make sure this is utilised where beneficial.
French Estate Taxes – The French estate tax system is very different to that of the UK’s, and Brexit will only complicate this issue. Makes sure you understand how each system works and how they interact.