Living France - - The Essentials -

In France you are taxed on a house­hold, rather than on an in­di­vid­ual ba­sis. This means that if you are mar­ried or in a civil part­ner­ship, your tax li­a­bil­ity is based on your com­bined in­come. French in­come tax rates are pro­gres­sive up to 45%. In ad­di­tion to in­come tax, so­cial charges are levied on most types of in­come (8% on salaries, 7.4% on pen­sion in­come and 15.5% on in­vest­ment in­come for 2017).

UK gov­ern­ment ser­vice pen­sions re­main tax­able in the UK and are not taxed in France, al­though you need to de­clare the in­come as it is taken into ac­count when the rate of tax payable on your other French source in­come is cal­cu­lated.

You also have to con­sider the tax im­pli­ca­tions on any other types of in­come such as in­vest­ment in­come. It is im­por­tant to note that what is tax-ef­fi­cient in the UK (such as ISAs) is not tax-ef­fi­cient if you be­come French res­i­dent.

Be­sides in­come tax you may be li­able to wealth tax. This is an an­nual tax on the value of a house­hold’s world­wide as­sets as at 1 Jan­uary. You are li­able if your tax­able as­sets are above €1.3m. Rates range from 0% (for as­sets un­der €800,000) to 1.5% (for as­sets above €10,000,000). From 2018 this may be re­stricted to real es­tate as­sets.

Suc­ces­sion tax is the French equiv­a­lent of UK in­her­i­tance tax but works quite dif­fer­ently. Tax is not charged on your es­tate but paid by each ben­e­fi­ciary on the as­sets they in­herit. Rates vary ac­cord­ing to the re­la­tion­ship be­tween the de­ceased and the ben­e­fi­ciary.

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