News | July 11, 2022

Key Considerations When Relocating to France

Notwithstanding the challenges caused by Brexit and Covid, France remains a favourite destination and partner for the UK. Over the years, many Brits have relocated to France, not just retirees but also young families, entrepreneurs and business owners seeking a new life across the channel.  

When contemplating relocation to France, obtaining the correct advice and implementing the proper planning is vital. Some of the initial considerations and potential traps of relocation are considered below.

  • Immigration – the very first question, even if you are just looking to buy a French property is whether you need a visa and are you eligible to have one? You should not continue without having answered this question first.
  • Tax residency and the general exposure to tax – before moving, we strongly recommend you take tax advice to understand how you move your tax residency from the UK to France, the tax impact of such a relocation in both countries and how the UK/France Double Tax Treaty applies to your situation. Remember that the tax treaty is there not for your protection but rather to sort out between the signatories how they are able to tax you.
  • Property – how you finance and hold French residential property is a considerable topic in itself. The French solution of a property holding company can cause serious UK tax problems. The use of corporate holding structures should be analysed in each case.
  • Business – the French offer different tax mitigation opportunities to business owners and therefore a relocating business owner must analyse the tax impacts for the business and the shareholders. This includes personal taxes, VAT and corporation tax. By way of example, the inheritance tax and capital gains tax regimes for businesses are much more generous in the UK than they are in France; however,  it is possible to mitigate personal exposure to French tax and advice should be taken to ensure that these opportunities are secured.
  • Succession planning – the UK and France have very different succession regimes and tax systems, and so the implications of relocation on assets and succession should be fully considered. For example, you may wish to make lifetime gifts before relocating to ensure these are only subject to UK inheritance tax and succession regimes. You should review your Wills and put in place a new Will, including a Will in France.
  • Trusts – the French look through trusts for French tax purposes and apply a very complex and burdensome regulatory and compliance regime where any of the settlor, beneficiaries and assets are in France. This is even the case for a non-French person moving to France whose trusts have already been established. Specialist advice should be taken from the outset.
  • Following your relocation – once in France, you should never disregard UK considerations. Examples include property structuring, the use of usufructs and investing in offshore bonds (known as les Assurances Vie).