France
The French tax and legal system is very different from that in the UK and many other countries. Many people who have moved to France or are planning to do so find it complex and expensive from a tax perspective. What they often do not realise, however, is that they may be able to take advantage of French tax compliant opportunities to protect their assets from the various French taxes, so much so that they could end up paying less tax in France than in countries like the UK.
As with any wealth and estate planning, the starting point is to understand what the rules are and then establish if there are ways to minimise the personal impact of them and if you can use the rules to your benefit.
FRENCH SUCCESSION LAW
France differs from many countries (including the UK) because residents of France are not legally able to leave all of their assets to whomever they wish on their death. French Succession Law (Napoleonic code) favours children and the surviving spouse or partner has a right to only 25% of your assets on death. Therefore the surviving spouse may not benefit from all of the joint wealth after the 1st death. There are a number of ways to mitigate or avoid the impact of Succession Law including Assurance Vie, en tontine, rente viagère, communauté universelle, usufruct, achat croisé, Pacte Civil de Solidarité and Société Civile Immobilière (SCI). However, in most cases, none of these methods in isolation should be considered a panacea. This is particularly the case if children from previous relationships are involved.
Under French Succession Law the following reserved shares for children apply on the 1st death -
1 child– 1/2 to child
2 children – 2/3 to children in equal shares
3 children – 3/4 to children in equal shares
The spouse is entitled to 25%. Any remainder, after taking account of all reserved entitlements, is freely disposable and can pass to the spouse or anyone else. For example, if there is one child, 50% will go to the child, 25% to the surviving spouse and the remaining 25% is freely disposable.
FRENCH TAXES
From a tax perspective, the starting point is whether you are French resident or not. If you are a French tax resident or you will become one, then in common with most other countries you will be liable to French income tax, capital gains tax and inheritance tax. In addition, France also imposes social charges and wealth tax. The combination of these taxes is generally considered to make France an expensive place to live from a tax perspective.
For more information on French taxes CLICK HERE to download our free tax guide to France.
WHY CHOOSE BLEVINS FRANKS
- We have local offices and qualified advisers both throughout France and in the UK. This means we are able to provide initial and ongoing advice to help you reduce tax on your wealth and help you structure your assets in the most efficient manner, whether you are at the planning stages of moving to France, or you are already living in France, or if you are considering a return to the UK.
- Blevins Franks Financial Management Limited is authorised in the UK by the Financial Services Authority (FSA) for the conduct of investment and pension business. We are authorised to give advice in France through the EU Insurance Mediation Directive (IMD) – we are a UK company with offices in France. All our advisers in France are professionally qualified.
- We have first hand and up to date knowledge of the ever changing French tax regulations, as well as the opportunities available to reduce your tax liabilities.
- We take a holistic approach to protecting your wealth as we are able to give you integrated advice covering your French assets, your UK assets and any assets you own elsewhere.
- We provide a personal, ongoing, customer focused service and do not treat our clients as account numbers.
- So far we have been providing trusted services for over 35 years. We are here to guide you and your wealth today; in the future as your circumstances and objectives change, and eventually to help your spouse/partner and family when they inherit your assets.
The tax rates, scope and reliefs may change. Any statements concerning taxation are based upon our understanding of current taxation laws and practices which are subject to change. Tax information has been summarised; an individual must take personalised advice.
