05 July 2019
By Thomas Marron
06 14 24 61 29
It is not difficult to appreciate why so many people fall in love with France and consider making it their home. There are, however, some tax and financial essentials you need to be aware of and plan for if you are to get the best out of living in France.
While you should review all the various aspects of your wealth management when moving from one country to another, in France it is particularly important to look at the tax and estate planning implications nice and early. The way you hold your assets can make a significant difference to how they are taxed as well as to inheritance issues.
Ideally you should take advice before you buy your property and make the move, so that you do not miss out any tax and succession planning opportunities. However it is never too late to review your position as there are often steps you can take to improve your tax situation.
There are various ways of owning property in France. There is personal ownership in sole or joint names. You could have a community marriage contract or insert a tontine clause in the French conveyance. Alternatively, you could own the property in an SCI, a form of French property-holding company.
When deciding how to own your French property, you also need to take the strict French succession laws into account. The best option for you depends on a number of factors, such as your family situation (particularly if you have an unmarried partner or stepchildren); what you want to happen to your property on death; whether you will be a French or UK tax resident etc.
The French tax regime is completely different to the UK’s, not to mention very detailed and complex. Anyone moving to France or recently arrived needs to be prepared for this. There are various tax traps and many people pay more tax than necessary or get their tax planning wrong. It is usually fixable, but of course getting it right from the outset makes life much easier.
What is tax-efficient in the UK is not usually tax-efficient in France, so you need to review your savings and investment structures. The tax burden can be high in France, but you can usually take steps to reduce it, sometimes considerably, particularly on investment capital.
So take specialist cross-border tax, estate planning and wealth management, and as early as possible. It will prove invaluable and give you peace of mind that everything is in order as you get on with enjoying your new life in France.
It is important to seek personalised, professional advice about your income tax in France. For questions about completing your tax return, speak to a tax accountant. For advice on effective tax planning in France, to lower liabilities on savings, investments and pensions, speak to a cross-border tax and wealth management specialist.