New year financial planning review for France

January is a perfect time to review your financial planning. Is your tax, estate, investment and pension planning up to date?

January is a time when we tend to reflect on the previous 12 months and look ahead to what the coming year may bring. It is a good time to reflect on your financial planning and ensure it is up-to-date and designed to protect your long-term wealth for you and your family.

Tax planning

It is always a good idea to review your tax planning from time to time to confirm it is up-to-date. This is even more important with the significant French tax changes for 2018. While these are positive reforms, it is still worth looking at how you hold your assets to ensure you can benefit as much as possible. Take advice to ensure you are taking advantage of the tax planning opportunities available in France.

The new global automatic exchange of information regime, implemented through the Common Reporting Standard, is well underway. 50 jurisdictions, including France and the UK, began collecting client data from January 2016 and made the first exchange by September 2017. Another 50 jurisdictions will start sharing by September 2018.

Cross-border tax planning is complex, especially if you earn income in one country and live in another. Are you sure you are paying tax in the right place? Specialist advice can give you peace of mind as well as potentially save you tax.

Savings and investments

In November 2017 the Bank of England increased the UK interest rate for the first time in over ten years. It was by no means a seismic shift – just back to 0.5% from 0.25% – and has your bank increased the rate you are getting on your savings? Keeping too much of your retirement savings in cash can be risky, if you are not earning enough to keep pace with inflation.

Successful investing is about managing risk versus return and having a well-thought out strategy specifically based on your personal circumstances, time horizon, needs, aims and risk tolerance. You should obtain a clear and objective assessment of your appetite for risk, then match your profile to the optimum portfolio. Ensure you have adequate diversification, so you are not over-exposed to any given asset type, country, sector or company.

You should then review your portfolio around once a year, because as asset prices rise and fall it can become unbalanced, and your circumstances may have changed.

Pensions

Today’s pension landscape is quite different from a few years ago. There are more choices than ever, but this means that great care must be taken to ensure you make the right decision for your objectives and to protect your retirement savings. Weigh up all your options, as well as the tax implications and opportunities in France, to establish the best course of action for you.

Estate planning

It is important to review your estate planning after moving to France, as both succession law and tax work very differently to the UK.

How much succession tax your heirs will pay depends on the degree of relationship to you – it can be as high as 60% for distant and non-relatives – so take advice to see how you can reduce this liability for your heirs.

France imposes forced heirship, which may prevent you dividing your estate as you wish. You can however use the EU succession regulation ‘Brussels IV’ to opt for the succession law of your country of nationality to apply, but must state this in your will. Take advice first to confirm if this is the right course of action for your family as it may have consequences you are not aware.

Reviewing your wealth management arrangement once a year should prove profitable and provide peace of mind. You should look at all the above areas together, as changes in one could affect the other, and establish holistic solutions that work for your personal situation.

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 is advised to seek personalised advice.