1. How does the cost of living really compare with the UK? 

Most households find the overall cost of living to be lower in France, with local taxes in particular, much lower than UK council tax bills.  However, it is worth bearing in mind that if you are totally dependent on sterling income, a fall in exchange rates could suddenly make everything seem much more expensive.

2. Is income tax the same?

Income tax is on a banded system in a similar manner to the UK, and although the top rate is 40%, most households pay less in France than they would in the UK.  This is because you are taxed as a household and all income is divided equally between the household with allowances and tax rates applied to each part. 

Bear in mind though that social contributions and possible health contributions can apply in addition to taxable income, with no nil band for social contributions.

3. Do their properties increase in value like ours?

As I’m sure we are all aware, property prices historically were lower and slower to increase.  However, recent years have seen large increases in many areas, with a few areas becoming comparable to UK prices.

4. How can I get my pension paid to me?

Some employers, and the Department of Work and Pensions (for your State pensions), will pay your pension income directly to your French bank account in Euros, which you may find simpler, although you have no choice over the exchange rate used. 

Alternatively, you can arrange to continue to pay into a UK bank account and arrange a monthly transfer at a fixed rate (for a year or two) via one of the currency dealers. 

5. Who taxes my pension?

If you live in France, you are French tax resident and must declare your worldwide income on your French self assessment form.  You will need to arrange for your pensions to be paid gross from the UK. 

Public sector pensions only will remain taxed in the UK in the first instance, but must still be declared in France, to take into account your total income.  You will not pay tax twice.

6. Can we still invest in the UK from there and have our income paid into our bank account, as we do here?

You will no longer be able to invest in any UK tax-sheltered investments, such as cash ISAs.  In any case, as you are taxable on your worldwide assets and the French do not recognise any existing UK tax shelters, it may be preferable to use investments specifically designed to be tax-efficient in France.  

This will also allow you to build euro savings, which are generally preferable, as most of your future costs are likely to be in euros.    

7. Do they have ISAs and tax-free savings plans?

There are two tax-free French bank accounts which you can open as French residents. 

There are some very tax-efficient investments which can hold a range of managed portfolios as well as cash-type funds suitable for French residency, which not only allow tax-free grow and tax-efficient income, but can sometimes be completely free from French inheritance tax.   

8. What are the hidden taxes?

Inheritance tax can be a problem if not planned for, especially as forced succession rules can apply on worldwide assets, often with unforeseen and undesirable results.

Social taxes of 11% apply to any taxable investment income in addition to your income tax bill. (Investment income is defined as, amongst other things,  bank interest, dividends from shares including equity ISAs and PEPs,  winnings from Premium Bonds and rental income from gites and chambres d’hôtes.) This makes it important to use investments that are designed for living in France and will provide legitimate tax-shelters.

An annual wealth tax is applied on a sliding scale, starting at 0.55% on assets over the first  €760,000. This tax is assessable per household on the value of your worldwide assets. 

9. What insurance do I need?

As well as the usual household and car insurances, most French households also take out a top-up health insurance policy.  You are obliged to join the French Health service.

The State cover will pay for up to 70% of your medical costs up to the Tarif de Convention amount.  A top-up insurance policy is important so that you are covered for the balance of your costs, even if these are above the Tarif.

10. Will you help us with planning our move?

Siddalls specialse in personal financial planning for those planning to live in France and will take a complete overview of your personal situation and circumstances to ensure a smooth and tax-efficient move into a country with very different systems to the UK.

Being registered and having offices in both France and the UK means we can keep up to date with both countries systems and understand and explain how to protect your assets from tax. 

After discussion we can advise you on the most suitable investments, help set-up these investments and continue to help you once living in France. Our ultimate aim is to provide you with tax-efficiency, security and simplicity for your new life in France.