Bill Blevins, co-founder of Blevins Franks and columnist for The Connexion for many years, sadly recently passed away from a long illness.
Bill worked closely with David Franks to make Blevins Franks one of the leading international tax and wealth management advisers for UK nationals living, moving to and returning from Europe. Her lively personality, insight and generosity have had a great impact on staff and clients.
Condolences from all of Bill’s colleagues at Blevins Franks go to his wife and family.
Rob Kay, a senior partner at Blevins Franks who has worked closely with Bill for many years and has decades of experience advising British nationals in France, will write this column in the future.
If you are new to France or are planning to move here, you probably have a list of jobs to do.
While that might sound like a long time already, you should include a wealth management review on the list. It is important to adapt your tax, financial and estate planning to your new life in France and devoting a little time to it now will pay you dividends and give you peace of mind.
If you’ve been living here for a while, when was the last time you reviewed your financial plan? Are you sure it is up to date and suitable for your life in France?
Residence has become a bigger issue for UK nationals after Brexit. There are, in fact, two concepts of residency that you should be aware of and plan for:
- Legal residence – your rights, as a national of one country, to live and work in another;
- Tax residency – the country which has tax rights on your worldwide income, earnings and wealth.
If you weren’t on time to gain legal residency under the Brexit Withdrawal Agreement, don’t worry. It is generally still possible to retire in France.
You will need to overcome a few more bureaucratic hurdles, but with some advance planning and a little patience, you can make your dream come true. Make sure you understand the French tax residency rules (it’s not just about counting the days) and, if you come across one, correctly report your worldwide income, earnings and real estate as required by law. French tax.
If you own assets or earn income in another country, follow the double taxation treaty to pay your taxes in the right place.
Overall tax rates in France can be a bit off-putting, but the tax burden on income and investment assets has improved since the 2018 tax reforms.
It is certainly worth reviewing your investment assets to see how you can take full advantage of this more favorable tax system.
In all cases, the French tax system offers possibilities to reduce your commitments, from the share system for general income to tax-advantageous measures for your savings and investments.
Don’t assume that what was tax efficient in the UK is also beneficial in France. You may need to convert existing layouts to more suitable for French residents.
Certain investment schemes in France, such as life insurance, allow you to reduce your annual taxable income (without necessarily reducing your actual income), which can make a big difference to your tax bill.
If you have not yet moved to France, find out if you are in a better tax position selling your house in the UK while you are still living in the UK or while waiting to live in France. If you haven’t bought your French home yet, be aware that the way you own the property could have unexpected tax and inheritance consequences.
If you opt for co-ownership, do you have to in joint possession, in tontine or an asset included in your conjugal community? Or should you buy through a real estate company (SCI), a particular type of French company?
Explore all of your options – the best one for you will depend on your family situation and goals.
You should also know that if the global real estate assets of your household amount to more than 1.3 million euros, you will be liable for property tax in France.
Inheritance tax and estate planning
Will the right money go to the right hands at the right time? French inheritance tax and inheritance tax are both very different from those in the UK. To make sure your wishes are granted, seek advice from a local advisor.
Inheritance tax can be high, up to 60% for distant or non-relatives, but there are often ways to reduce this burden for your heirs.
French inheritance law imposes forced inheritance. UK nationals can use the EU inheritance rules to decide which UK inheritance law (but not tax) to apply to their estate, but first understand how it works and the potential consequences in determining if it is the right one. way for your family.
Your investment portfolio
Review all of your savings and investments to make sure they’re right for you now. Do you have the right asset mix to meet your goals, time horizon and risk tolerance? Do you need to hold more Euro assets and diversify away from UK stocks and bonds? For added peace of mind, get an objective analysis of your risk profile, and then make sure that the mix of assets you have in your portfolio is exactly right for your needs and future needs.
Retirees should examine their pension funds and the options available to determine how to maximize their retirement savings.
Living in France presents opportunities. As a non-UK resident, you may be able to transfer your funds from a UK scheme to a recognized and qualifying overseas pension scheme (QROPS), which can provide various benefits. But explore all of the options before determining which one is best for you.
In certain circumstances, France only levies 7.5% income tax on lump-sum pensions.
This might allow you to move the capital to more tax-efficient arrangements, but it is only suitable for certain people, depending on their position. Do not risk your retirement savings: benefit from professional and regulated advice.
For best results, consider all of these essentials in conjunction with each other. Often times, one will impact the other, so working on them in isolation could have unintended consequences.
Ultimately, you want the peace of mind that all of your affairs are in order and designed in the best way to make your wishes come true. Following the professional advice of a local advisor will ensure you have the facts and understand your options.
Tax rates, scope and reliefs may change. All statements regarding taxation are based on our understanding, Blevins Franks, of applicable tax laws and practices which are subject to change; The tax information here has been summarized; it is advisable for an individual to seek personalized advice.