Many of those resident in France still need to keep an eye on the UK tax authorities. Here are a couple of important current issues.
UK Tax Residence
Some will be aware that HMR&C announced recently that their review of the UK Tax Residence rules, which had been expected to be finalised by now so that new rules could be introduced from 6 April 2012, is still ongoing. The existing rules will continue to apply until 5 April 2013.
However, this should not be regarded with too much complacency since the likely new regime will take into account periods spent in the UK during the tax years 2010-11, 2011-12 and 2012-13, so it is still important to keep a record of your movements, as in all probability the new rules will ‘catch’ many more than previously.
Just before Christmas, HMR&C announced a review of the QROPS rules and the short period of consultation with interested parties ended on 31 January 2012. Changes are due to take effect from 6 April, and these are likely to include more strict policing of such pension transfers than previously. However, genuine transfers (not ‘pension-busting’ – where the aim is to release cash) will still be possible.
As before, it is vital to take professional advice on pensions and the desirability or otherwise of using a QROPS transfer, but for many long term expatriates there can be considerable advantages.
If you have UK tax-efficient investments such as ISAs or PEPs, you need to be aware that these do not protect you from French taxes. Fortunately, the Assurance Vie allows you to hold investment funds etc that you may already be familiar with in a manner which avoids French tax and helps with succession planning too.
There have been many changes to the French tax system during 2011 and many are also affected by events in the UK, such as those above. If you would like advice concerning these or any other financial issues, please contact me for a free initial consultation.
The Spectrum-IFA Group
Tel: 04 68 98 18 94
Mobile: 06 32 23 94 95
Visit our website – www.spectrum-ifa.com