Fun in the sun

Hello and Bonjour!

So, after much deliberation and being totally convinced we were going to move to Spain we fell in love with Valbonne and the south of France (it's hard not to).

I've read many threads on similar topics but thought i would create one that was relevant to our situation.

We are a family of 4 in our mid thirties with two children under 3. We're looking to move before the end of this year, however that depends on how long it will take us to rent our house out in the UK.

In terms of work, which is a question that always comes up when posting a thread like this... We have a business in the UK that produces us an income. The rest of our work is done over the world wide web. From my little understanding, if we live permanently in France we would be have to pay tax in France etc..? (I am in the process of discussing options with our accountant).

I'm not sure what Brexit would mean for us - but we're not willing to put our lives on hold while these joker politicians decipher their arses from their faces! Plus, i think Brexit will take a hell of a lot longer than they think.

We will rent for the first couple of years with a view to buy if all goes well. We are not fluent in French but will take lessons as a matter of urgency upon arrival.

In terms of education, we are reading mixed things, but like the Montessori approach as that is what my eldest is currently enrolled in. Sophia Antipolis has many great schools, hence why we chose that particular area.

My question is one of advice really.. What do we need to bear in mind / look out for, make sure we do, from your experience when you were in our shoes?

Thanks in advance for any responses

cyrian

Hi
France is unlike the UK with respect to business.
In the UK, you can set up a business and notify HMRC - not in France.
You have to set up a business structure and the social charges can be substantial.
Your accountant is probably not qualified to advise on the French system - you should look for an accountant who is familiar with both systems.
You will need advice about the correct business structure from a French accountant.
You don't need to pay all your tax in France but you need to declare it all on your French tax return. Most of your tax will be payable in France.
The French tax authorities will calculate the final tally of your total income.

Tweedpipe

Cyrian has correctly outlined some of the points which are often overlooked by Brits coming to live in France.
It's generally common knowledge that countries like Denmark and Sweden, are those taxed the highest in Europe. But what isn't so well known is, if you are an employer, employee or self-employed, France is considered the highest in Europe, and one of the highest in the world for it's level of social security contributions. These Prélèvements sociaux often come as a shock for those who are initially unfamiliar with the system here.
It would not be difficult to find an accountant in UK who can advise on the basic tax you would pay in France for a given salary. However finding one in UK who clearly understands the Prélèvements sociaux that would be applicable for a given salary, and especially on savings investments etc, will be extremely difficult.
Do your research very carefully. Cotisations, property taxes, healthcare top-up insurance (highly recommended), utilities etc, makes one aware with no uncertainty that living in France is not cheap.

Fun in the sun

Thanks for the great advice, it's much appreciated.

These are exactly the things we need to be aware of before we dive in.

EuroTrash

Having run a business in the UK and moved to France with it, my experience was that in France you give significantly more of your hard-earned cash to the state in one form or another. Therefore you need to charge more, which if your customer base is essentially UK based risks making you uncompetitive, but if it's an international business or if you can swap to a French customer base it's not a problem.

It's a fact that France has a high tax burden. Every year French taxpayers celebrate the day when they stop earning for the state and start earning for themselves, and I seem to remember hearing on the radio a few days ago that that date had arrived. In France it's end July/early Aug which is later than most countries - I think for the UK it's March! But you just have to plan and cut your cloth accordingly. I wouldn't let that put you off unless either you really hate paying taxes, or you would be essentially reliant on a UK income, at the mercy of the exchange rate and trying to compete with lower taxed UK-based businesses. Money is necessary of course but it isn't the most important thing in life.

dmu

That's interesting!
When I had my S� rl, I used to have to bill (and be paid!) a good 50% of my nominal salary every month before I could start to put earnings in my own pocket. This made the celebration day the beginning of July at the time.
But I'm now retired and am reaping the benefits of everything I paid in!

Fun in the sun

Our thoughts exactly!

We have a small property business in the UK so it's not transferable to France unless I sell everything and reinvest in French property!

I think for us lifestyle is the key and in order to get that we would have to pay one way or another.

EuroTrash

The clients and the assets may not be transferable, but the business registration side of things will have to be transferred to France in some shape or form if you are going to run it from France. The business activity is deemed to take place where your bum is when you are working, ie if you live in France and work from your computer at your home in France then the business is based in France, or alternatively if you live in France but retain premises in the UK and go back to put in your working hours onsite in the UK then you would be classed as an EU cross-border worker and you need get the relevant documentation confirming your status as such from HMRC.

If you will in fact be running it from France then basically, if it's a UK reg co your options are either to retain the UK business structure and to set up some kind of registered business entity in France through which to pay your social contributions, and juggle between the two (ask an accountant); or alternatively, the UK business can register with URSSAF as an employer with no place of business in France, with you as its nominated representative in France, and you can then generate your payslips through the URSSAF portal and pay all your social contributions that way. The latter route is all explained here, in English https://www.urssaf.fr/portail/files/...3%A8re%20E.pdf

What you can't do is live in France and run your business from France but continue paying NICs and tax in the UK, UNLESS HMRC has agreed this, which normally they only do for posted workers or cross border workers. Once you no longer reside in the UK, you are no longer entitled to belong to the UK social security system and the NHS.

EuroTrash

Having said all that it depends what the business actually consists of. If you simply rent out property and there is no actual business structure or business activity as such, it wouldn't be an issue.

Fun in the sun

Great post - Thank you

I will speak to my accountant and find a French counterpart to set up my structure in the best possible way. We are happy to pay into the French system as that will hopefully work in our favour when it comes to residency if all works out.


On another note:
Do we need to register with the town hall or any entity when we move?

How does healthcare work, i believe we need to purchase insurance? how much approx would that be for a family of 4?

EuroTrash

As an economically active person, healthcare is one of the things that your social security cotisations cover, so you and your family will all be entitled to state healthcare once your French business entity is set up (and in the case of your wife if she's not working, once she can prove 3 months' regular and stable residence). French healthcare isn't free at the point of delivery in most cases but the state reimburses around 70% of the cost of most treatment. You can take out insurance to cover what the state doesn't cover, most people do this and there is a wide range of policies, from basic hospital only policies to all singing all dancing policies that cover just about everything you could ever need, with the cost varying accordingly.

At present there is no requirement to formally register at the Mairie or anyone else when you arrive.

Hope that helps.

EuroTrash

Just re-read your first post - you say you also work online, so as you probably realise that work will also need to be registered as a business since presumably you'll be working from your home in France, and you'll pay cotisations on that income too.

Fun in the sun

Exactly that! We don't own the properties through a Ltd company..

Not sure if this would work in our favour with the UK having low rates of corporation tax.

These are all the things we need to explore. However putting our portfolio into a UK Ltd would be costly as we would have to pay Stamp Duty and CGT again. Not to mention higher interest rates and arrangement fees after redeeming our mortgages early!!

Fun in the sun

Definitely, helps a great deal.. Thank you for taking the time to reply (and in simple terms), it's very much appreciated.

EuroTrash

Rental income from properties in the UK is always taxable in the UK.

If the online work generates a significant proportion of your total household revenue, it may work out best simply to declare the rent as "unearned" income on your French tax return, and call the online work your main economic activity.