Pensions & Investments (before you buy in France)
Before you leave the UK and come to live in France, there is a unique opportunity to rearrange your Pensions & Investments. We work with a team of leading international tax and wealth management advisers to UK nationals living in Europe.
Unfamiliar local bureaucracy and a foreign tax system can be very confusing, especially when the rules frequently change, as they have done in France under President Hollande. To confuse matters, you may also still be liable to some UK taxes. The tax burden in France has increased, with President Hollande particularly targeting wealthier residents. He has started taxing investment income at the same rates as employment income, scrapped the lower wealth tax rates, increased succession tax for children and imposed social charges on non-residents. Income is also subject to ‘social charges’, which are levied on top of income tax.
All this makes it more important than ever to take professional advice on your tax planning. It is still possible to take advantage of tax compliant opportunities to protect your assets from the various French taxes. With professional guidance, our clients enjoy extremely favourable tax treatment on their capital investments and assets. Indeed, with proper planning, it may be possible to improve the manner in which your pensions and investments are held, so that the end result is less tax being paid as a consequence of your move to France.
In view of the loss of trust and confidence in banks, many investors are now seeking alternative safe custody arrangements to provide security for their assets. Our business partners can provide our clients with the maximum level of investor protection, without relying on the financial strength of banks. There are also several interesting options for UK nationals living abroad to consider for their pension funds. However pensions planning is a potential minefield for expatriates, and great care should be taken to assess the options available and what is best suited to you before transferring your fund to an alternative structure, such as QROPS. This sort of plan offers :
1 Tax efficiency. Subject to the laws of the overseas country in which you become resident, it may be possible to receive income from your retirement fund at lower tax rates than would apply in the UK.
2 Investment choice. There is no need to buy an annuity, so you can retain control of your pension savings capital, and you can hold assets such as residential property, which are not usually allowed in UK pension funds.
3 Passing wealth between generations. QROPS enable you to pass the portion of your pension savings that you do not spend to your heirs and, depending on the tax laws of the country where you choose to become resident, there may be a lower rate of Inheritance Tax to pay.
4 Avoid or diminish exchange rate risks and costs. You can take income and capital from your QROPS in the currency of your choice.
No decision affecting your retirement capital and income should ever be taken in a rush. Remember the old maxim: ‘Act in haste – repent at leisure.’
Expert advice and planning is absolutely essential to ensure that your wealth is transferred to your chosen beneficiaries in accordance with your wishes, without it being decimated by inheritance taxes. You also need to consider the best way to hold your assets, so that they can be passed to your heirs according to your wishes and as efficiently as possible. Our advisers offer numerous International Tax & Wealth management strategies for UK Expats.
Can you afford not to take their advice ?
Did you know that there have been 21 new French finance acts in 5 years.
How much tax is too much ? You do not always have to pay !!