Investors To Pay More Tax In France

26.11.10

Please note that this article is over six months old. While Blevins Franks takes care to make sure that information is accurate on the date of publication, some content may change over time. You should not rely on the accuracy of legislation and tax information in this article; take professional advice for your circumstances.

If you own investments including shares, OIECS, investment trusts and property, the major changes proposed in the French Finance Bill for 2011 are likely to impact on your income and wealth. The

If you own investments including shares, OIECS, investment trusts and property, the major changes proposed in the French Finance Bill for 2011 are likely to impact on your income and wealth. The proposed changes not only increase the tax rate on capital gains but also remove a valuable exemption which has to date protected many French residents from tax. If the proposals are passed as expected you only have a small window of opportunity to re-arrange your assets in a more tax efficient manner.

Under the proposals, the fixed rate of tax levied on capital gains will increase from 18% to 19% on negotiable securities and from 16% to 19% on immovable assets.

The tax free threshold of ?25,833 per household per year measured against the sale proceeds from shares and other securities will be abolished. If you own securities directly you will no longer be able to use the threshold to take tax free income or capital from your portfolio. From next year, you will pay tax and social charges on all gains (at 31.1%) regardless of the amount sold.

This is a further blow for investors as last year the exemption also applied to social charges and the fixed rate of tax was 16%. All these changes inevitably create a ?tax drag? on equity portfolios, making it harder for you to preserve your wealth.

The solution for many French residents is to invest via more tax efficient vehicles. It is possible to structure your capital so that accumulated income and gains are not subject to tax in France and withdrawals are taxed very favourably. They can also help reduce wealth and succession tax.

You need to take action before the end of the year, however, if you wish to escape higher taxation. Contact us now to find out what steps you can take and the tax savings you can achieve. Blevins Franks have already helped many clients pay less tax in France. Our tax planning strategies can help you reduce tax significantly – in some cases down to zero. This could increase your income, helping you enjoy your retirement years more, and give you peace of mind that your wealth will provide financial security for yourself and your family.

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; individuals should seek personalised advice.

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