I’ve been giving financial advice to English speaking clients who live outside of their home country for more than 23 years. And for 13 years, I’ve been based in France. The people I help are certainly a varied bunch of folks. Some have settled into their new country and new lifestyle very well. Others not-so-well. And, a few of these not-so-well people have returned to their home country.
Over the years I have looked in depth why this was the case. What made some expats give up and go back. And, I’ve found there was a constant thread running through the settled ones. They planned their finances. And then sat back and enjoyed retiremen. I’m talking about people who have now retired to another country and rely their pensions and investments to pay their bills. 95% of my clients tend to fit into this category.
Understandably so, retiring to another country is more often than not a decision made purely on emotions. After a long working life, there’s a desire for less work, for a new lifestyle and climate etc. But, to make a success of retiring abroad, then facts as well as emotions also have to enter into this retirement equation.
Financial planning works best when planned in advance
I equate financial planning to visiting the dentist. You tend to go to the dentist for two main reasons. Either you have a horrendous toothache now. Or you don’t want a horrendous toothache in the future. Those who have planned in advance have visited their dentist regularly. The dentist has put a plan in place to look after their teeth and to avoid future toothache. Those that don’t visit regularly invariably turn up at their dentist’s door with a swollen face and a horrendous toothache. They up leaving with less teeth.
Good regulated Financial Planning is essential to avoid Financial toothache.
So how do you make sure your bills and other expenses are paid for as tax-efficiently as possible when you have retired in France?
Know what works best for you
If you have moved (or are thinking of moving) to France from the UK, then you need to know that France has a completely different tax system and completely different inheritance rules. So, to get the right advice it is essential that you talk to an International Financial Adviser who understands the rules and regulations of both the UK and France.
Some people living in France are happy to keep their investments in UK deposit accounts, which make little or no interest. The low interest rates available rarely beat the inflation rate. So in real terms their investment is essentially moving backwards. Some people living in France are happy to keep their investments in UK ISA’s and Premium Bonds. Though these investments were tax-free for them in the UK, now that they’re living in France with a French tax regime, the capital gains made on these investments are taxable at 30%. And, they’re declarable every year wehther funds are withdrawn or not.
Making a decent return on your investment
Low interest-rates mean that to make noteworthy return you may need to take a measured amount of risk within your risk profile. At the same time you should be seeking to remain as tax-efficient as possible. That’s why speaking to your International Financial Adviser about the options available for your Savings and Investments as a French tax resident is worth your time. For example, the UK pension freedom act (2015) presents you with lots of options for your pension retirement savings. You are no longer forced to purchase an annuity at historical low rates. In fact, UK annuities are currently being looked at as some companies may have potential irregularities. Your International Financial Adviser can also tell you about the best options available for your UK Pension savings even if you’re French tax resident.
Not sure if you can afford to retire in France?
To help make your retirement to France the best it can be, the correct financial advice is vital. This free Retire in France guide will help you understand your options when choosing a financial advisor to help you plan your dream retirement to France.
Paul Flintham is an International Financial Adviser with Beacon Global Wealth Management in France
Email: enquiries @ bgwealthmanagement.net; Web: beaconglobalwealth.com
Beacon Global Wealth Management are members of FEIFA (the) Federation of European Independent Financial Advisers: https://feifa.eu
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