There’s always such a lot to think about when you’re moving to France – from packing boxes and making sure your favourite glasses don’t get broken when you’re loading them onto the removal lorry to getting your post redirected. Some things are easy to forget but are really important for ensuring a successful move when it comes to the financial side of things.
Sort out your UK Tax position
For instance you should always inform the UK inspector of taxes at your local HMRC tax office that you are planning to move. You don’t have to do it in person, you simply fill in a form P85 (find and download it here: www.gov.uk). Doing this enables the UK tax office to clear up any outstanding issues before you move. For example if you are receiving UK property rental income you will also need to complete a ‘non-resident landlord declaration’. This will enable you to receive the income gross otherwise, if rented through an agency, they will be obliged to give you the net rent after tax at 20%.
Consider Savings and Income
You should consider planning a strategy for your savings and income before you move. Some UK savings products just don’t work as well as you’d like them to when it comes to French taxation. For some savings products, it may be better to consider closing or changing them before you become French tax resident. ISAs for example are a tax free product in the UK but are subject to a number of taxes in France. Therefore if you require the cash or need income, it may be better to look at the French options available which could be more tax efficient than keeping the funds where they are. This should be done before leaving the UK tax regime and entering the French as then no taxes will be payable. Premium bonds are taxable in France so that big win, may not be so large after all.
Assess your Pension options
What about pensions? Where are they? Can you access them yet? Review options with your adviser so that your pensions are in the best place ready for your move to France. Use a qualified authorised financial adviser who understands both the UK and French tax systems so that you can make an informed choice about your pension options. Arrange for a state pension forecast which will tell you how much you will receive and when. Pension income is often tax efficient in French terms compared with investment income which has a higher rate of ‘CSG’ or social charges. However some forms of investment bonds are incredibly tax inefficient especially if they are the offshore variety and really can be a ‘square peg’ in a round hole.
Think about Income
When you’re assessing your income, don’t forget you may pay tax on it in France – reducing what you have to spend. A good adviser will be able to provide you with an estimate of tax payable and look at ways of minimising or reducing tax. Your estate agent can usually recommend someone English speaking who is local to you for tax purposes or your financial adviser can recommend someone to help based on your needs. Getting it right first time means that you won’t have to worry going forward.
You may need to think about inheritance planning, doing this before you move can save considerable heartache (and headache) later. You may include all of your assets (property and cash) wherever they based. The notaire handling your house purchase may only look at how the property ownership should be structured, which of course might be only part of what you have.
A good adviser will be able to review everything you have in place now and in the future (after the sale of your UK property for example). They should take into account your income needs and priorities, coupled with your inheritance wishes and come up with a plan that will help you start off on the right foot for tax purposes once you become resident in France.
I’d advise you to use a competent tax adviser to prepare your first French tax return, especially if you don’t speak fluent French. Getting it right first time means no unpleasant surprises later on and allows you time to figure out how the system works. Your tax adviser can also liaise with your financial advisor concerning the timings for moving/closing some investments which can be crucial.
Jennie Poate is a qualified financial adviser. She is happy to answer any queries you may have by telephone or email and she and her team would be delighted to help you plan your move to France.
Jennie can be contacted at: jennie @ bgwealthmanagement.net; Beacon Global Wealth Managment
The information on this page is intended as an introduction only and is not designed to offer solutions or advice. Beacon Global Wealth Management can accept no responsibility whatsoever for losses incurred by acting on the information on this page.
The financial advisers trading under Beacon Wealth Management are members of Nexus Global (IFA Network). Nexus Global is a division within Blacktower Financial Management (International) Limited (BFMI). All approved individual members of Nexus Global are Appointed Representatives of BFMI. BFMI is licensed and regulated by the Gibraltar Financial Services Commission and bound by their rules under licence number FSC00805B.