As with any move, there is the undoubted stress that comes along with it. Save yourself the time, stress and money with our guide to taxation in France...
Tax Residency
Be aware of your tax residency position. If you meet the French residency criteria requirements, you will be liable to French tax and social charges on your total income and gains. In addition, if you spend time in the UK, you might also remain UK tax resident. Seek advice early on to prevent paying more tax than is necessary.
Obligations to Register and File
As a French tax resident, it is your obligation to register with the French tax authorities and declare your worldwide income on an annual basis.
Your Home and Other Properties
If you intend to retain your property in the UK, or at least until you have moved to France, you will need to be aware of how the UK and French capital gains tax rules interact. This might make you think again about the timing of the sale of a property and/or the commencement of your tax residence in France.
Pensions
If you are deciding whether to retire in France, it is important to seek advice before you take any benefits from your pension scheme(s), specifically with regards to the timing of the receipt of lump sums, including those available under the new UK pensions freedoms.
UK Tax Efficient Investments
Investments in the UK like ISAs, Venture Capital Trusts and Enterprise Investment Schemes, do not have tax efficient status in France, and you will have to pay French tax and social charges on any income and gains on these investments. You might want to consider whether it would be worthwhile retaining these as a French tax resident.
Structuring Your Assets
Taxes in France can be high. However if you understand and use the rules correctly, you could pay less tax in France than the UK. Take steps to place long term savings and investments in French compliant tax efficient structures to minimise your taxable income, gains and social charges.
The ‘Foyer’ System
The ‘foyer’ or ‘household’ system shares the income of the household amongst all its members. This avoids one family member paying taxes at the highest rates, whilst another does not fully utilise their allowances.
French Estate Taxes
The same structures that are efficient for French income tax, capital gains and social charges will also offer more flexible succession arrangements and could potentially reduce your French estate tax exposure.
Currency
Keeping your savings and investments in Sterling puts your wealth at the mercy of exchange rate fluctuations. If you are moving to France, the majority of your expenses will be in Euros. It might therefore be worthwhile to have a considerable proportion of your wealth in Euro-based investments to eliminate this exposure.
