By Mary Taylor, Partner, Blevins Franks
Tax planning has become even more complicated in France. We have been faced with numerous tax reforms and rises. Cross border exchange of information is also on the increase, reducing financial privacy.
The fixed rates of tax applied to investment income have been abolished this year. Your interest, capital gains, dividends etc. are now taxed at the scale rates of income tax, up to 45%, and you still need to pay 15.5% social charges.
Tax on capital gains made on the sale of property also increased this year. A surtax of up to 6% is added on depending on the amount of gain. At least the taper relief period is being reduced.
Over recent years we have also had reforms to wealth and succession taxes. Social charges are imposed on non-residents. We also now have a strict reporting requirement for trustees.
There has also been confusion over whether French residents have to pay social charges on UK rental income and UK government pensions. There has been inconsistency across regions with local tax offices interpreting the UK/France double tax treaty in their own way
Looking ahead, the 2014 Finance Bill may introduce changes to the taxation of Assurance Vie contracts. Assurance Vie would continue to enjoy favourable tax treatment, however you could consider establishing or adding monies to a contract now, to take advantage of the exceptionally favourable current tax regime.
At the same time, European and global tax authorities are closing many exemptions and tax planning arrangements, attacking offshore tax havens and demanding higher levels of disclosure. Banking secrecy is fast being consigned to history. After a surge of bilateral agreements, the move now is to multilateral agreements which will see several countries all sharing information with each other.
Governments will receive much more information on income and assets held overseas. To give one example, a local French tax office has questioned British expatriates about their National Savings Certificates after receiving information from the UK authorities. These are tax free investments in the UK but unfortunately fully taxable here in France, as is also the case with ISAs and PEPs.
It is more important than ever to ensure that not only are your assets invested as tax efficiently as possible, but also in a fully compliant manner.
Blevins Franks are holding a series of private seminars and consultations to discuss the various tax changes in France, how they impact your personal wealth, and the solutions. Please contact us if you would like to attend or if you would prefer a personal appointment.
Mary Taylor TEL 05 62 30 51 40 EMAIL mary.taylor@blevinsfranks.com
To keep in touch with the latest developments in the offshore world, check out the latest news on our website www.blevinsfranks.com
| The 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; an individual should take personalised advice. |
