Thinking of Moving to France? Three Reasons to Seek Financial Advice



Thinking of Moving to France? Three Reasons to Seek Financial Advice

You may have already researched key aspects like the ideal location and property prices, but have you considered the financial implications such as income, capital gains tax and wealth tax, and Napoleonic Law?

Here, we’ll provide you with three reasons why you should seek expert, cross-border advice to ensure you have all the knowledge you need for a stress-free transition to a new life in France.

1. Will you become a French resident?

Do you intend to reside in France indefinitely, or plan to spend half of the year in your French holiday home? This is important, as it will determine whether you are a French tax resident or not.

If you spend more than 183 days in France each year, have your main home or occupation, or hold most of your assets in France, you will be considered resident in France for tax purposes, and any worldwide income, capital gains and real estate wealth will be taxed by France in accordance with their rules and rates.

If you do not meet any of the tax residence criteria, you only need to pay taxes on income sourced in France and assets that are located there. However, you are likely to be taxed on worldwide gains in your country of residence – as is the case in the UK – so it’s important to get integrated advice to have the best options presented to you.

2. Are you aware of your pension options?

As an expatriate, you could choose to leave your pension in the UK or opt to take your pension funds with you when you make the move to France. Determining a course of action that would be the most advantageous, but not too risky, depends a great deal on your personal circumstances and goals for retirement.

If you decide to leave your pension where it is, the ways in which you can access your funds will depend on the type of pension you have. It’s also worth noting that UK pension payments are generally paid in sterling, but while living in France you’ll need to convert the money over to Euros which is susceptible to conversion fees and variable exchange rates.

Alternatively, you may wish to transfer your pensions overseas, which can be done through a Qualifying Recognised Overseas Pension Scheme (QROPS). EU transfers are currently tax-free, but transfers outside the EU invite a 25% ‘Overseas Transfer Charge’. QROPS will also allow you to consolidate several pensions and offer greater investment diversification than typical UK schemes. A QROPS will protect your pension from UK taxation on income or other gains and is completely immune to future changes in UK legislation that would negatively impact you.

There are benefits to both approaches, and receiving advice from a regulated expert who specialises in cross-border investments management will help to ensure you are able to make an informed decision that will benefit you the most, without placing unnecessary risk on your retirement savings.

3. Have you heard of forced heirship?

France still looks to enforce ‘forced heirship’, part of the Napoleonic code created in the early 1800s designed to protect family bloodlines. This means you cannot freely leave your assets to whomever you want, and children are protected above spouses.

Although an EU Succession Regulation (Brussels IV) dictates that an individual can elect for a will to fall under the law of their country of nationality, rather than country of residence, France has now approved changes to succession law that will allow children to contest and appeal the will of their parent if it does not follow the reserved heirship rules for assets located in France.

This legislation seems to be in direct conflict with European regulations and could still be challenged by the European courts, but it is important to seek advice and stay up to date on the situation if you feel it may affect your circumstances.

Need Advice on Moving to France?

Blevins Franks are experts at helping British expatriates make the most of their wealth in the most tax-efficient way possible.  We provide integrated, cross-border advice on tax planning, estate planning, investments and UK pensions. Our overriding aim is to give you peace of mind that your financial affairs are in order, for today and the future, for yourself and your family and heirs. We can also guide you through the new residence rules post-Brexit. We have ten offices across France, and our advisers would be happy to discuss your plans to move to France and how we can help.

+44 (0)20 7389 8133

[email protected]

Tax rates, scope and reliefs may change. Any statements concerning taxation are based upon our understanding of current taxation laws and practices, which are subject to change. Tax information has been summarised; individuals should seek personalised advice.

You can find other financial advisory articles by visiting our website here

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