If you are a UK national living or considering a move to France, it is important to get your financial needs in order. The French tax system operates a lot differently than most countries, including the UK. There are certain things you can do which could significantly reduce the tax you pay in France which will be explained in this text. It is important to understand the basics of French tax law to avoid hefty fines. It is also important to understand how pensions and QROPS are taxed for Expats, as this could significantly change the outcome of your pension income in retirement. The areas we will cover include:

It is important to note that the information provided on this website is just a guide hence before making any decisions it is always advisable to talk to one of our independent financial advisors today to discuss your personal requirements in more detail.

Living in France

Reporting on Foreign Assets

Reporting your foreign assets when becoming a resident in France is extremely important. Failure to declare overseas assets for the purpose of ISF wealth tax will result in potentially big fines. Expats are often unaware of the reporting rule or the fines or potential jail time it can impose by failing to do so. Any jurisdiction that doesn’t automatically exchange information to France about taxation will automatically be blacklisted and therefore taxed as if non-reported.

France has doubled penalties for non-reporting of trusts since 2013 hence making it even more important to make sure your financial affairs are in order if you are residing in France. The penalty was originally equal to €10,000 or, if higher, 5% of trust assets, and was raised in 2013 to €20,000 or, if higher, 12.5% of trust assets.

Defining a French Resident

It is important to note; that the French tax year runs from 1st January to 31st December.

If you have been living in France for more than 183 days in a calendar year, you are deemed a resident in France for tax purposes. This is also the case if you work in France or have most of your assets in France. You may also be considered a tax resident in France if your family live in France and you work overseas. For this reason, it is important to speak specialist tax advice if you have any concerns about your residency as it will affect the amount of tax you have to pay.

Taxes in France

French Tax Positions for Residents

French residents pay income tax on their worldwide assets as if it were ‘earned income’ including; income from work, investments, pensions, properties and land.

In France, the amount of tax you pay is based on your earnings as a household, not as an individual. The calculation, therefore, takes into account how many people live in the household – one adult is equivalent to one person and one child is equivalent to 0.5 people in the calculation. For example, if you are married and have one child, your income tax will be calculated by dividing the total amount by 2.5 (two people and one child). Typically speaking, the larger the household, the smaller the tax bill is likely to be, although you must be married to both be considered as one person in the tax calculation.

In France, everyone is required to make a tax return each year as no tax is ‘taxed at source’. Married couples file a tax report together whereas non-married couples file a tax report separately. You need to return your tax declaration form by the 31st of May for the previous year. If you miss the deadline date you will be fined 10% of your tax bill. Please note, the deadline is June if you file your tax return online.

Income Tax in France

2023 income tax bands are as follows for annual earnings between:

0% for income up to €11,294
11% for income exceeding €11,294 and up to €28,797
30% for income exceeding €28,797 and up to €82,341
41% for income exceeding €82,341 and up to €177,106
45% for income above €177,106

Capital gains tax (CGT) in France

The standard rate of capital gains tax in France for real estate property is 19%. Depending on the amount of gains made (the difference between the original purchase price and the final sale price), there may also be additional surcharges or social charges but there may also be various exemptions and tax relief that you could benefit from. The same will be applicable for other types of assets such as shares.

Capital Gains Tax on Real Estate Property

A French principal private residence is generally exempt from paying Capital Gains Tax in France. A former second residence, becoming your principal home, is free from Capital Gains Tax once the owner has completed at least one tax return from that address (some notaires request two years) demonstrating fiscal residence of France.

It is important to note that this tax, between the UK and France, is covered via the tax treaty between the two countries.

France has the right to tax the sale of UK property, owned by French residents, with credit given for any tax paid in the UK. Tax will be taken at 19% with a further 17.2% (or 7.5%, if applicable) in social charges.

There are allowances applied for the period of ownership, thus the weight of tax reduces over time, avoiding real estate capital gains tax after 22 years and social charges after 30 years.

When considering costs, you may consider those which may be legally offset, or use a fixed allowance, which is available to those within a certain criteria.

Capital Gains Tax on Shares/ Funds/ETFs etc

No amount may be earned tax-free on the sale of shares in France, so holding them directly is less desirable than by other means.

For UK nationals it is important to note that ISAs are not exempt from capital gains tax, thus they will be assessed as whatever is inside them, so either cash savings, shares etc. with both Capital Gains Tax and social charges payable. We have experienced serious reporting problems with this, with ISA providers unwilling to provide tax information for an investment that is ‘tax-free’.

The treatment of shares has become complicated with various options for taxation depending on how long they have been held and the level of gains dictating which tax option suits you best. You may select a flat tax (PFU – Prélèvement Forfaitaire Unique) with no allowances, or you may use your marginal rate and apply allowances, thus requiring complex calculations to ascertain which results in the lowest bill. This is hardly favourable, leaving you to learn those complex calculations, change it on your best guess, or pay an accountant to help. We work with many tax accountants in France to help with this matter.

Social Charges in France

France has a separate charge for social services which is one of the highest in the world. The social charge itself does not entitle you to social benefits, although it does contribute to funding health care in France and differs depending on the source, such as earned income, pensions, capital gains and so on.

France has a comprehensive social security system. That system is funded by social security contributions as well as social charges, which are a percentage of people’s taxable income. However, other forms of income such as that from pensions, rental income, interest from savings, investments or capital gains tax are also liable to social charges.

They are not progressive like the French income tax system and effectively form part of the tax system.

As of 2024, the tax rates are currently set to:

  • CSG (Contribution sociale généralisée) – 9.2%
  • CRDS (Contribution pour le remboursement de la dette sociale) – 0.5%
  • Prélèvement de Solidarité – 7.5%

How much social charges you are liable to pay will depend on your own particular situation, including whether you are a resident in France or not, as you may be liable to pay a flat rate of 17.2% or a minimum tax rate of 7.5%.

Wealth Tax in France (IFI)

The Impôt sur la Fortune Immobilière (IFI) is a wealth tax that applies to individuals whose net property value exceeds €1.3 million. Unlike its predecessor, the ISF, the IFI solely focuses on real estate assets, excluding other forms of wealth from its calculation. Residents of France are taxed on their worldwide property holdings, while non-residents are only taxed on property located in France. The IFI emphasises the need for strategic asset management and planning, particularly for those with substantial real estate investments. Below is a table showing the progressive rates:

Gift Tax

These taxes apply to inheritance and gifts as in the UK and are applied to any gift made throughout life. France offers various gift allowances between family members which can only be used once every 15 years, therefore the gift is free providing it is below the allowance. The following gift tax allowances apply in France:

  • Spouse/Partner – €80,724
  • Children – €100,000 to each child from each parent
  • Grandchild – €31,865 to each grandchild from each grandparent
  • Brother/Sister – €15,932
  • Nieces/Nephews – €7,967

If the gifts made are above these exemption limits, then tax is applied from 5% (less than €8,072 up to 20% (from €15,932 – €552,324).

These taxes don’t apply to wedding and birthday gifts provided it is within the donor’s living standard. It is also not applied between married couples.

Inheritance Tax in France

The French inheritance system is fairly standard and rigid – so much so that many French people don’t even have a will because they know that the inheritance laws cover their family. If you’re a non-resident, though, with assets and/or loved ones outside of France, it’s best to make a will expressly noting your wishes. Notably, heirs have an inherent right to a portion of the deceased’s estate, which includes the likes of bank accounts, investments, and properties.

French inheritance law derives from the French civil code, using a residence-based system regarding inheritance law, meaning that French inheritance law applies to all French residents regardless of nationality.

French inheritance laws practice forced heirship, protecting the direct line of descent – that is, children, grandchildren, and parents. Depending on the number of children, a certain portion of the inheritance must be set aside. The figures are as follows:

  • If there is one child, they receive 50% of the estate.
  • If there are two children, they receive 66.6% of the estate between them.
  • With three or more children, they receive 75% of the estate between them.
  • If a deceased person leaves behind no children, any living parent receives 25% of the estate (50% if both parents are alive).

Corporation Tax in France

The corporate tax rate for companies is 25%, regardless of their profits. Small companies can benefit from a reduced rate of 15% on their first EUR 38,120 of profits

Exit Tax in France

France has a reputation for heavily taxing its residents and since 2011, the “Exit tax”, or “exceptional contribution on the value of certain assets,” aims to deter wealthy individuals and companies from fleeing the country or coming and going in and out of France for purely fiscal reasons. The law was, however, reformed in 2019 under President Macron, and there are ways to prevent that taxation or to minimize its impact.

The law states that when a taxpayer who has been a French fiscal resident for at least 6 of the previous 10 years transfers his tax residency outside of France, they becomes liable to income tax and social contributions on interests and profits for financial assets exceeding 800 000€.

The tax is calculated on the unrealized gains of one’s financial assets, i.e. the difference between their market value at the date of departure and their acquisition price, which is then subject to a flat rate of 30%. Before 2019, the rate was 47,2%, the taxpayer had the option of paying in instalments over 5 years if they kept the assets in France over that period, and could get tax abatements if some of the investments were in small or medium enterprises (SMEs).

UK Pension Planning

UK Pension Options

There are 2 main types of pensions you can transfer from the UK:

  1. Defined Contribution – a pension pot based on how much is paid in
  2. Defined Benefit – usually a workplace pension based on your salary and how long you’ve worked for your employer.


1. Defined Contribution Pensions

Below is a list of some of the reasons people would transfer away from a defined contribution scheme:

Avoid purchasing an annuity – Many UK schemes only allow the option to purchase an annuity such as Prudential, Scottish Widows, Canada Sun Life and many more. At the time of writing, annuity rates are at record lows, meaning you must live around 40 years to get your money back. They also provide no flexibility and are the main reason pension freedoms came into play to give people the freedom to transfer to more flexible schemes such as an SIPP or QROPS. You are unlikely to be able to have an annuity being based in France.

Multi-currency options – UK pensions only have the option to have your pension denominated in Sterling whereas SIPPs and QROPS allow multi-currency. This has become ever more important in times when the Sterling has weakened against its peers as retirees who are relying on an income in any currency other than the Sterling have seen their income drop in recent years due to currency fluctuations alone. If this reduction reduces your income below your means of living, then you may find yourself requiring larger withdrawals.

Diversified investments – UK pensions are only invested in UK markets. This can have a detrimental effect on your returns as the UK market vs the US market for example has underperformed by hundreds of percent since 2000. Another benefit of transferring is having access to thematic ETFs, allowing you to invest in megatrends which are going to change the way the future works. It often makes sense to have the option to diversify into thematic ETFs and invest outside of the UK market, both of which are options if you transfer to a SIPP or QROPS.

Death Benefits – we often find with DC schemes that the death benefit options can cause serious issues if beneficiaries are outside the UK, because in the UK for example, if you passed away pre-75, the beneficiary can receive the pension tax-free. Post 75 they pay tax at their marginal rate but if the beneficiary lives outside the UK, regardless of when you pass away, it is almost always taxed based on the beneficiary’s marginal tax rate, so what we can do is transfer to an alternative arrangement which gives the option of a dependent’s pension meaning the funds can stay within the scheme and the beneficiary only draws out money when they need it

Consolidating pensions into one pot – Should you have various pensions with different providers then it can be difficult to manage pre- and post-retirement. Consolidating them into one place with online access and a financial adviser providing regular updates can help you manage your pensions much more effectively. CLICK HERE to request a call back from a specialist financial adviser.


2. Defined Benefit Pensions

Before discussing some of the potential benefits, it’s important to mention that a lot of times it might not be beneficial to transfer your DB pension. You are giving up guarantees for something that isn’t guaranteed, so the decision is not black and white. However below are some of the reasons people transfer away:

Greater Flexibility – Defined Benefit Schemes offer a guaranteed income for life from your normal retirement date. This is a good guarantee that is lost should you transfer away. However, a guaranteed income is rigid and cannot be changed once you begin to receive your pension. Transferring to a SIPP or QROPS allows you to have the following flexibilities:

  1. You can access your pension earlier or defer it to a later date without penalties, unlike a DB scheme.
  2. You can invest in any regulated investment.
  3. You can take 100% of your pension as a lump sum, provided you are over 55.
  1. You can increase or decrease your income. The reasons could be:
    1. You become ill and want to spend the money while you can.
    2. You never want to access the funds and therefore pass them to your family.
    3. You can decrease or stop your income if you find part-time work or receive an inheritance in retirement.
    4. There are many other reasons.
  2. You can take ad-hoc lump sums through retirement. The reasons could be:
    1. To give money to a loved one.
    2. To go on holiday.
    3. To buy a property.
  3. You can take your 25% pension commencement lump sum and then defer taking the rest of your pension until whichever age you wish. The reason could be:
    1. You want to pay off your mortgage and then defer taking the rest of your pension until you are retired.
    2. Purchase an investment property or business idea and then defer the rest of your pension until you are retired.

Cash equivalent transfer values (CETVs) – The CETV you receive is closely linked to UK gilt rates so if interest rates are low, CETVs go up significantly. If rates are high, it becomes unattractive to transfer a DB pension.

Your scheme will provide you with a “Cash Equivalent Transfer Value” (CETV) which is the amount of money the scheme requires to purchase your guaranteed income in today’s money. As yields fall, transfer values go up. If yields fall too much, schemes will struggle to pay guarantees as the performance of the assets they hold could become lower than the amount of money they need to pay for your guarantees. What once was a benefit, could, in turn, become a drawback, as schemes have the right to offer a reduced transfer value should they be unable to pay members benefits.

If you want to find out more about current CETV rates, CLICK HERE to contact us today.

Reduced Life Expectancy – Although this is a very morbid thing to think about, it is an important factor to consider when reviewing a defined benefit pension. The analysis you receive will compare the income between when you retire and when you die and work out whether you would be better off in the scheme you are in or in a SIPP or QROPS. Advice is calculated using the average life expectancy for both males and females in the UK.

Therefore, if the life expectancy is much lower in your family, spending more in earlier years becomes much more important as you can access 100% of your pension from age 55 in a SIPP or QROPS. This means that should you become ill, you can spend your pension before you die or pass 100% of the remaining pension to your loved ones.

Avoid your pension going into the PPF – The pension deficit of defined benefit schemes has been increasing significantly over the past decade. Many large defined benefit schemes have gone into liquidation over the past few years such as BHS, British Steel, Carillion and many more. When schemes go into liquidation, they enter the pension protection fund (PPF) and you automatically lose 10% of your pension and potentially much more. In many instances, some of your guaranteed increases could also be lost completely.

It is important to note that the PPF is not backed by the treasury and could also go into liquidation should too many schemes enter. The PPF as of June 2020 is in fact in deficit. Upon transfer to a SIPP/ROPS, you will be protected against your scheme going into liquidation. Your funds are completely ring-fenced inside a SIPP/ROPS, meaning that if the SIPP/ROPS trustees go into liquidation, your funds are completely protected.

There are many other benefits and drawbacks in addition to the ones mentioned above. Some schemes have restrictions or penalties to transfer away which may defer a transfer being in your interest. We help you understand whether it is worth looking into alternative options and if it is, we can then assess whether a QROPS or SIPP would be more beneficial. Help us help you by filling in the form below or CLICK HERE.

UK Pension Options in France

You have 3 options with what to do with your UK pensions in France:

  • Retain the existing benefits 
  • Transfer to an overseas scheme (ROPS)
  • Transfer to an alternative UK scheme (SIPP)
  1. Retain the existing benefits 

Before Brexit, leaving your pension where it is might have been the best option, depending on whether you have a defined contribution or defined benefit pension but since Brexit, it has become very difficult to access UK pension schemes in France. If you have an annuity as the only retirement option, you most likely won’t be able to access your pension in France. Some schemes don’t even allow access to flexi-access drawdown outside of the UK. If this is the case, you have to transfer.

Some UK pensions have very good guarantees before and after retirement as well as on death. Other pensions may have restrictions about how you can access your funds, high fees, limited investment and currency options among other things.

Understanding what your pension offers you as well as understanding what your needs and objectives are is important before looking at other options as your pension could be suitable where it is currently based. We provide a free initial consultation to first understand what type of scheme you have to give you a fair understanding of whether it is worth looking into alternative options.

To speak to an independent financial adviser at SJB Global, CLICK HERE to complete the form at the bottom of the page so that a specialist can get in touch with you. Some of the main reasons people look at moving away from their scheme are listed below:

  1. Transfer to an overseas scheme (QROPS)

A QROPS stands for Qualifying Recognised Overseas Pension Scheme; an alternative pension that accepts transfers from the UK defined contribution and defined benefit scheme. French residents qualify for a transfer to a QROPS; however, in 2017 the government announced a 25% overseas transfer charge to anyone who transfers to a QROPS that is based outside of the EEA.

Following the UK government’s spring budget on 8th March 2017, HMRC released an update in their Pension Schemes Newsletter on a few key points, including the QROPS rules, which we need to bring to your attention:

Transfers to QROPS requested on or after the 9th March 2017 will be subject to a 25% tax charge, unless;

  • The ROPS is in the EEA and the Member is also resident in an EEA country
  • Subject to the 5-year rule, where the exemption proceeds no longer apply, the 25% charge can be retrospectively applied. However, curiously, within the newsletter from HMRC, they confirm that “A change in member’s circumstances within 5 years may result in a change to the tax treatment of the original transfer and could lead to a repayment being due.”

In the 2024 tax year, anyone transferring to an ROPS with a pension scheme above the lifetime allowance will be taxed 25% on the excess.

The benefits of a ROPS are as follows:

  • Payments from an ROPS are paid gross from UK income taxes
  • You will be entitled to a 25% lump sum from the age of 55.
  • You will be able to withdraw from your pension via drawdown or Flexi-access in Malta but not in Gibraltar (GAD).
  • You can withdraw 100% of your pension from age 55.
  • Greater investment choice.
  • Have your pension denominated in any major worldwide currency.
  • You will no longer be subject to UK pension legislation changes.
  • UK inheritance tax tax does not apply.
  1. Transfer to an alternative UK scheme (SIPP)

SIPP stands for ‘Self-Invested Personal Pension’. It is recognized as an international pension scheme that HM Revenue & Customs (HMRC) identifies as eligible to receive transfers from registered pension schemes in the UK. To qualify as an international SIPP, the scheme must meet the requirements set by UK tax law and you must be a non-UK resident. SIPPs can receive the transfer value from your scheme and then the funds are invested to provide you with retirement benefits at any time from age 55.

Most SIPPs are ‘money purchase’ or ‘defined contribution’ schemes where the member knows how much they are investing, but not what they will receive, because the pension fund size will depend upon the performance of the underlying investments of the SIPP. The performance is not guaranteed.

A major benefit of a transfer to one of these arrangements is that your pension fund does not force you to buy an annuity and could therefore be passed on to a nominated beneficiary on your death – in some cases, free of UK tax. Additional benefits would include wider retirement options, greater investment choice, the ability to have your fund managed by an overseas IFA, choice of any major currency denomination, plus more:

  • Payments from your UK pension will be taxed as ‘earned income’ at source by HMRC, although this can be avoided. Still, this can be claimed back under the double taxation treaty.
  • You will be entitled to a 25% lump sum from the age of 55.
  • You will be able to withdraw from your pension via drawdown or Flexi-access.
  • You can withdraw 100% of your pension from age 55.
  • Much greater investment choice.
  • Have your pension denominated in any major worldwide currency.
  • You will be subject to any UK pension legislation changes.
  • UK pension death tax applies to UK pensions regardless of where you are resident. This means if you die after the age of 75, your pension will be taxed at your beneficiary’s marginal rate on receipt up to 45%. In France however, you would be taxed if the beneficiary is a French resident regardless.

 Comparison of SIPP vs ROPS

  • There could be a 25% overseas transfer charge applied to a ROPS transfer if you don’t live in the EEA or you move outside of the EEA within 5 years of the transfer. This does not apply to a SIPP transfer.
  • There could be an additional charge if your pension values are above the LTA amount and you transfer to a ROPS. This doesn’t apply in a SIPP
  • Both a SIPP and ROPS do not force you to buy an annuity.
  • They both offer the ability to take benefits through drawdown or flexi-access.
  • They both allow you to hold your pension fund in any major currency of your choice.
  • They both can be managed by an independent financial adviser.
  • A SIPP has a lifetime allowance of £1,073,100 that increases by inflation unless you have lifetime allowance protection, whereas a ROPS has no lifetime allowance.
  • A SIPP is cheaper than a ROPS.
  • A SIPP is FCA-regulated whereas an ROPS is regulated by either the MFSA or GFSC.

Taxation on UK Pensions in France

UK pensions are taxed as earned income in France. Non-residents are subject to UK income tax at source at the member’s marginal rate. You have a few options which can be complex without the correct advice.

France´s DTA (Double Taxation Agreement) allows residents to obtain an NT tax code from HMRC to allow them to withdraw income from their pension without the deduction of UK tax at source. You can only receive an NT tax code if you have taken income from a pension before (not including your 25% PCLS which is free from UK tax at source anyway). You can also avoid paying emergency tax if you have a P45 dated the same year you requested the payment – this can only be if you are receiving any other UK sources of income for that year and live overseas. Should you not have an NT code or a P45 for that year, you have three options:

  • Option 1 – When you withdraw your 25% PCLS, also withdraw the minimum withdrawal amount of income from your pension at the same time. The pension will then be informed of your NT tax code/tax code which can then be used to avoid income tax being deducted at source for all future payments. This can take months to obtain.
  • Option 2 – Withdraw the minimum amount of income and wait for your NT tax code before taking the desired income/ad-hoc amount
  • Option 3 – Take a withdrawal and then claim the tax back from HMRC at the end of the year. It is your job to reclaim the tax with HMRC every year. If you are a French resident, you shall only be taxed in France as stated under the new double taxation agreement (DTA) that came into effect on 1 January 2015. This means a claim can be made to HMRC so that no UK withholding tax applies.

It is important to note that a 9.1% social charge is payable on any income taken from a pension (7.4% for pension income under €2,000 a month/€3,000 per couple unless you hold EU Form S1 or are not affiliated with the French healthcare system. The rules surrounding this can be quite complex and require specialist advice.

Taxation of Lump Sums in France

Lump sums in France can be taxed in several different ways which are as follows:

  • Marginal rate – You can choose to be taxed at your marginal rate of income tax if no other provisions are made.
  • Four-year rule – You can choose the lump sum to be taxed as an ‘exceptional payment’ over four consecutive years. The lump sum is therefore divided by 4 and paid over four years. This may reduce your tax liability if it takes you into a lower tax band.
  • Fixed Rate – This method is proven most popular among Expats in France. You can choose to opt for the first lump sum to be taxed at a fixed rate of 7.5%, known as ‘prélèvement forfaitaire libératoire’. This is only applicable to the first lump sum taken. A 7.4% Social Charge is also applicable on the lump sum. This is often used when taking a first lump sum withdrawal within a pension.

UK State Pensions in France

Income from UK government service pensions remains taxable in the UK (and not France). You still include it on your French income tax return, but receive a credit equal to the French tax and social charges. Government pensions are exempt from social charges in France and they still increase to UK inflation which is a great benefit to have. You can claim your French and UK state pensions together or separately (if you meet the minimum required amounts in both countries). You can top up your UK state pension from abroad too, giving you a great tool to increase your retirement income.

Tax Planning Opportunities in France

With strategic tax planning, French residents can reduce income tax, social charges, capital gains tax and wealth tax liability in France.

As time goes by, we are learning more about what Brexit means for life in France, what actually changes and what doesn’t. The good news is that when it comes to taxation, nothing really changes for UK nationals who are resident in France. The tax regime remains as complex as ever, but at least we do not need to learn new regulations.

Taxation is a domestic issue and France taxes all its residents the same way, regardless of nationality. Where residents own assets and earn income in another country, the relevant double taxation treaty determines where the income and assets should be declared and taxed. The UK/France treaty is agreed between the two countries, not at the EU level, so the UK leaving the bloc does not make a difference here. As always, you need to understand how the treaty affects you and ensure you are paying tax in the right place.

It’s always worth reviewing your tax planning from time to time to see what your current liabilities are and establish how you can improve your tax situation going forward. Few people enjoy spending time on tax planning, but it can achieve benefits for you and your family.

Here are four of them:

A reduced tax bill for you

Let’s start with the most obvious advantage – reducing your overall liability for income tax, social charges, capital gains tax and property wealth tax.

Many people do not explore if there is a more tax-efficient way of holding their capital and assets and unknowingly end up paying more than they need have. This may include income tax on bank interest you are not even withdrawing, or capital gains tax when switching between investments.

Many expatriates are also caught out by not reviewing their arrangements for their new life in France. For example, income derived from ISAs and Premium Bonds prizes are tax-free in the UK but are fully taxable in France.

Meanwhile, you could be missing out on alternative structures available in France that can reduce your tax liability as well as providing other potential benefits, such as currency flexibility.

It is also worth noting that, although Brexit does not in itself affect taxation, some member states do tax non-EU/EEA assets differently to local/EU assets. Here in France, very beneficial tax treatment can apply to life assurance/assurance vie but some of the advantages only apply to EU policies, so you could pay more tax in future.

Less taxation for your heirs

Of course, the less tax you pay in your lifetime, the more you have to either spend now or pass on to your heirs.

But with some investment structures, you may also be able to lower the succession tax liability for your heirs. Assurance-vie, for example, can be highly tax-efficient for estate planning purposes. Ideally, you want a solution that will limit inheritance taxes while also providing tax-efficient income and investment growth throughout your lifetime.

More estate planning flexibility

Strategic tax planning can also help make things easier for your family when you are gone. Many investment arrangements that provide tax efficiency also offer more estate planning flexibility and control.

Some UK pensions are only transferable to your spouse on death, but when transferred to a Qualifying Recognised Overseas Pension Scheme (QROPS) or reinvested in a suitable tax-efficient structure for France, you could pass funds on to other chosen beneficiaries, often without the need to go through probate.

Maximising real returns

In this global climate of economic uncertainty and prolonged ultra-low bank interest rates, effective tax planning also plays a part in helping returns outpace the cost of living.

Ultimately, what counts when assessing the value of investments are ‘real’ returns – after tax, expenses and inflation are taken into account. Property, for example, is often lauded for producing relatively high returns over the long term, but with stamp duty, local rates, capital gains and wealth tax applied, the tax burden can be large compared to other assets.

With investments, the starting point should always be making sure your portfolio is well-diversified and designed to suit your situation, needs, goals, time horizon and risk tolerance. But without suitable tax planning, returns can be diminished by taxes that could have been avoided or significantly reduced, so this is important too.

Where Do I Start With Tax Planning?

It is easy to get DIY tax planning wrong, especially with regulatory goalposts changing frequently. Expatriates have the added complication of having to deal with the tax rules of more than one country, at a time when global tax scrutiny is at its highest. Getting it wrong could lead to an unwelcome and unexpected tax bill not to mention the stress of sorting it out.

Tax planning should not be done in isolation or as an afterthought – make it a fundamental part of your investment, pensions, estate planning and overall wealth management strategic plan. Schedule regular reviews so you can adjust your arrangements to keep up with any life changes or tax reforms that affect you, including new opportunities.

For the best results, talk to one of the SJB Global advisers who have an in-depth understanding of cross-border taxation, including how the French tax regime interacts with UK rules. As well as offering peace of mind that your tax and wider financial planning is compliant in France, we can ensure it meets your income needs and goals in the most tax-efficient way today, without burdening your family with unnecessary tax headaches in the future.

SJB Global