While the Brexit countdown may be on to secure French residency, British expatriates wishing to live in France should not underestimate the importance of early tax and financial planning.

Quite rightly, Brexit has encouraged many Britons to bring forward their plans to move to France to secure residency ahead of the expected transition deadline of 31st December 2020.

The emphasis is usually on getting into the French system as quickly as possible. However, without careful planning in advance, changing residency can have serious financial pitfalls. Taking expert, cross-border advice is a crucial step towards ensuring your financial affairs are suitable for your new life in France. 

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The importance of early financial planning

Anyone moving to France needs to prepare for a completely different tax regime to the UK. While there can be tax benefits in both countries, some opportunities may be lost if you wait until you have changed residency. An adviser who fully understands both the UK and French systems can help you take advantage of the most tax-efficient investment, pensions and estate planning solutions for your individual circumstances and goals. 

Even if you are already resident in France, there are usually steps you can take to improve your tax situation. However, getting it right from the outset makes things a lot easier – and cheaper.

UK assets

Understanding when and where to liquidate your UK assets could significantly lower your tax liabilities. Here are some examples:

  • While pension lump sums are free of UK taxes for expatriates in France, they attract French taxes. However, if you cash-in your entire pension, under certain conditions French tax rates can be as low as 7.5%. See more about your pension options

  • Once you leave Britain, UK investment products such as ISAs lose their tax benefits, with interest or dividends taxable in France. If you cash-in these investments as a French resident, capital gains tax can also apply. Alternative investment vehicles are available to French residents that offer better tax-efficiency as well as estate planning and currency benefits. See six tips for protecting and growing your wealth

  • Timing is crucial when disposing of UK property. If you sell your main home when in the UK it escapes French tax, but if sold after a year of living in France it will be taxed as a second home. Selling a second home in the UK will always attract UK capital gains tax, but it can be tax-free in France if you have owned it for 30 years or more. 

Estate planning

French succession law and taxes differ greatly from the UK’s. ‘Forced heirship’ rules, for example, will automatically distribute up to 75% of your estate to your children. While you can elect for the relevant UK law to apply to your estate instead, this can be complex so should be considered carefully. Note that doing this will not affect your liability for French succession taxes, which can be as high as 60% if you leave assets to step-children or non-relatives.

Good estate planning can provide peace of mind that your legacy will end up in the right hands at the right time, without attracting more tax than necessary. Along with a review of your tax and financial affairs, it should be a key part of your strategy to become French resident. A cross-border specialist can provide advice on the best time to sell your UK assets to maximise tax savings, and recommend tax-efficient investment structures that also provide succession tax benefits for your chosen heirs.

Planning ahead

Although the possibility of returning to live in the UK might seem remote when embarking on a new life in France, in reality this happens quite often. The pull of grandchildren, bereavement or illness can all be reasons to return to the UK. Again, early planning is the key to ensure your investments remain tax efficient and your financial affairs are structured appropriately for your new home.

In any event, you should undertake regular reviews to check everything is still set up in the best way for your unique circumstances and to take advantage of any new opportunities.

Ultimately, you need personalised, professional guidance to make the most of tax planning, pension and wealth management opportunities in France to suit you. Note, however, that UK financial advisers are unlikely to be up-to-date with the intricacies of French taxation and the frequent changes to the tax regime. Speak to an adviser based in France who has specific cross-border experience with British expatriates. 

Although the Brexit countdown is on to secure French residency, take the time now to make sure that your finances are also in the best possible position for your life in France.  

See more about how best to prepare for Brexit in France


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.