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The amount of tax a British expat living in France has to pay will not change as a result of Brexit negotiations as tax agreements are negotiated with individual countries not with the EU as a bloc.

[Original posted in July 2016, last updated November 2019]

The double tax treaty, which ensures that people are not taxed twice on the same money, is a direct agreement between Britain and France. Post Brexit, however, depending on the terms of the exit agreement, British nationals living in the UK could no longer benefit from some exceptions reserved for EU citizens.

If Britain decides to remain part of the single market (the EEA, European Economic Area) nothing is likely to change as tax rules are the same for residents of the EU and the EEA. Inheritance tax, local property taxes and stamp duty on property purchases would also remain the same because equal tax rules for locals and other Europeans are part of the principle of the free flow of capital within the single market, enshrined in the 1957 Treaty of Rome.

However, in the event of a full Brexit – from the single market as well as the European Union – it will no longer be necessary for EU countries to treat Britons the same as EU nationals and any advantages of being an EU national would therefore no longer apply.

Social charges on pensions

Currently British state pensions for residents in France are exempt from social charges as they are not considered to issue from the French social system – it is the UK that covers healthcare through the S1 mechanism. France has committed to a 2-year extension of rights to Britons even in case of a no deal, but after this time British pensioners would have to enrol in the French healthcare system and their pensions would no longer be eligible for the social charges exemption.

Fiscal representative

France requires that a représentant fiscal intervene in the sale of property by non-residents who bought the property less than 30 years ago, which adds a fee of around 0.5% to 1% of the sale price to the transaction costs. This requirement is waived for EU citizens, and therefore it would be safe to assume that it will indeed apply to non-resident British property owners after Brexit.

Other potential changes of taxes in France after Brexit would be the treatment of donations made to non-EU (i.e. British) charities, which would no longer be eligible for a credit under the French tax system, and the loss of preferential social charges on income received by European non residents that was reduced by 9.7 points, from 17.2% to 7.5% on 1 January 2019, which doesn’t apply to non-residents of third countries.

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This guide is provided for general information purposes only and does not intend to be a substitute for professional advice. We encourage you to consult your estate agent, legal or tax adviser.

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