January is a time when many people reflect on the previous 12 months and look ahead to what the coming year will bring. You may set goals for the year, whether health or lifestyle related. When it comes to financial planning, however, focusing on just one year is not nearly enough. It’s about creating a long-term strategy that safeguards your financial security through retirement and ensures a smooth, tax-efficient transfer of wealth to future generations.
While your annual financial review should account for current developments, effective wealth management focuses on defining short- and long-term goals and creating a strategic, tax-efficient plan to achieve them.
One key reason to review your savings and investments, tax and estate planning is to ensure they are up to date. January is a particularly good time for this, since we’re starting a new tax year in France and you should assess how this year’s tax changes affect you. British expatriates will likely also need to adjust their wealth management following the UK’s autumn budget. And both France and UK have had rather interesting budgets these last two years, though for different reasons. The UK tax reforms have been particularly far reaching and require action to protect your wealth and legacy.
Your personal and family circumstances also evolve over time, making it necessary to adjust your financial planning arrangements accordingly.
How do you approach financial planning, piece by piece or as a whole? Many people handle each element separately, using various advisers or relying on their own research. They might occasionally buy shares or investment funds, leaving older holdings unmanaged without a clear strategy. They may leave pensions unchanged, even when they have multiple pots from different employers. They may consult a tax specialist about French taxation or a lawyer for a French will.
True financial planning, however, means looking at the bigger picture. The way your investments are structured can influence your French tax exposure. Estate planning here is far from straightforward, with complex succession rules and forced heirship laws that affect what you can achieve. Similarly, when reviewing your pensions, it’s important to consider all your retirement assets together and the income they can provide. Approaching each element in isolation can have unexpected consequences for you and your heirs.
Here is a summary of three key areas you should consider in your financial planning review.
French residency and taxation
Living in France changes the way you need to approach your finances. What worked well for you in the UK rarely translates into tax efficiency here. Even the most carefully planned UK strategies often need a complete rethink once you become French resident.
To make the most of your new situation, explore solutions designed for France. Certain arrangements can offer valuable tax advantages while remaining fully compliant. For example, an assurance-vie policy is not just a tax-efficient investment – it can also provide flexibility and benefits that go beyond reducing your tax bill.
Being a French resident often offers tax advantages – with our guidance, many of our clients are better off being tax resident in France than in the UK. For example, the income tax parts system helps couples where one receives a much higher income than the other. Another example is if you are in a position to safely take your entire pension as a lump sum. While you are no longer eligible for the UK’s 25% tax-free lump sum, some people can limit taxation on the whole amount to just 7.5%. This may be possible if your contributions were paid to a contributory scheme and if you are taking out your whole pension without the possibility of taking another lump sum.
If you hold a Form S1, you are not subject to the additional social charges on pension income and lump sums, and the charges on your investment income are significantly reduced.
Estate planning
Estate planning shouldn’t be left until the end of your financial planning journey. In France, the way you own property and investments directly affects how your assets can be passed on and the amount of tax your heirs will pay. These rules are complex, so it’s important to factor them in early when purchasing property or setting up investment structures, rather than waiting until later.
As we start 2026, retired British expatriates need to apply some urgency to their estate planning. From April 2027, pension funds become subject to UK inheritance tax. This will impact your UK pensions even if you have lived in France for many years. And in pension terms, 2027 is not far away at all, since if you want to act to protect your savings, the paperwork involved can take many months. Now is the time to take professional cross-border advice to identify what options are available to you and which, if any, would be suitable for your circumstances and objectives.
Financial structuring for life in France
The cornerstone of successful financial planning is ensuring it’s built around your circumstances – your lifestyle, future plans, family needs, income goals, objectives, time horizon and risk appetite.
If you don’t already have a clear, strategic plan, it’s important to take a fresh look at your savings and investments. Ask yourself:
- Are they still appropriate for your situation today?
- Is your portfolio too risky, or perhaps not diversified enough?
- Can it deliver the income you need without eroding your capital?
- Would consolidating shares and funds make management easier?
Alongside this, review your tax exposure on investment income and gains. Could you benefit from more tax-efficient structures? Consider how your assets are held so they can pass smoothly and tax-effectively to your chosen heirs. Certain assurance-vie solutions, for example, allow you to hold a wide range of investments while offering both tax advantages and estate planning benefits. There are many options, so take care to select the right one for your needs.
Contact us today.
