Talk of income tax in France is something that can cause the jitters. But if you’re thinking about buying a second home in France, or making a complete move, the advantages from a tax perspective may represent great value. Jennie Poate, Head of Operations, France for Beacon Global Wealth Management explains…
Income tax in France
There always seem to be horror stories doing the rounds about tax in France. But if you’re planning to move here as a retiree or early retiree and already have some (or all) of your income stream planned, then you could well be surprised.
For example: if you’re married, you are taxed as a household and will have two tax-free allowances added together before income tax becomes payable. This is certainly handy if, like most people, one of you has a higher income than the other. All pensions receive an abatement or allowance of 10% before tax is payable – every little helps.
As an individual in the UK you would pay 40% tax above the £43,300 threshold. Even as an individual in France you wono’t reach this height until above €70,000. So even higher earners can pay less tax.
The rates for income tax in France
Income: Tax Rate (as at May 2018)
Up to €9,807: 0%
Between €9,807 – €27,086: 14%
Between €27,086 – €72,617: 30%
Between €72,617 – €153,783: 41%
Above €153,783: 45%
As an example, suppose two adults have a joint income of €40,000. Tax liability is worked out on the basis that each has €20,000. The first €9807 of each person is zero rated, tax is charged at 14% on the remainder.
There are also exemptions, discounts and reductions available – it can seem like a highly complex formula when you’re trying to fill in the paperwork and work out what’s what. Getting qualified tax advice can save you money, time and heartache (not to mention a headache).
Planning ahead is always a good idea
You shouldn’t just research the area or house you want to buy; you should also have a clear idea of how much income you need to live on in France, and how much of it will be taxed.
You also want to make sure that any savings you have are taxed as little as possible. The start of this planning from a financial point of view should begin before you move to France.
Using a financial adviser with in-depth knowledge of both the UK and French systems from a tax, pension and investment point of view could save you money as well as a big tax bill later on.
Although there is a lot of information on the Internet about taxes in France. It’s often outdated at best and at worst downright wrong. Having something bespoke and tailored to your needs and wishes will ease your financial transition into your new life.
Jennie is happy to answer any queries you may have. She and her team would be delighted to help you plan your move to France and offer a free, no obligation, initial consultation in order to discuss your requirements.
Jennie can be contacted at: firstname.lastname@example.org; www.beaconglobalwealth.com for information
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. The information in this article 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 this information.