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Finances - where to home my hard-earned!

Finances - where to home my hard-earned!

Old May 30th 2021, 5:58 am
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Default Finances - where to home my hard-earned!

Once again we've cancelled our proposed trip (June) - my plans of being resident in France at the beginning of this year have been royally scuppered - like many others!
Anyway - I am determined to move totally at the beginning of next year.
My savings are spread amongst UK banks including a cash ISA and a Stocks and Shards ISA. For tax considerations I guess I will have to cash in these ISAs before 31st Dec so that I wont have to pay tax on them once I move to France.
Which brings me to my questions....
I don't want my finances to control my life so prefer to keep things simple if possible. Where do people like me keep their savings?
I am quite happy to keep them in UK banks as I understand how it all works etc. Obviously I will need to open at least a current account in France for day to day expenses.
Or - is it advantageous to bring my money to France and invest it in a similar way in France?
I would be very grateful for advice.
I apologise that I haven't contributed but so far I have had zero to contribute in terms of advice etc.
We have rebooked our gite and ferry for end of August - when hopefully we will find something suitable for a long term rental for next year. Hopefully this virus situation will be eased by then.
Thanks as always
Regards
Baz
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Old May 30th 2021, 6:35 am
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Default Re: Finances - where to home my hard-earned!

I was tempted to say "under the mattress" - seems as safe a place as any these days LOL!
But seriously, the basic tax-free savings scheme in France is called Livret A, and AFAIK all French banks offer this.
https://www.service-public.fr/partic...osdroits/F2365
I think that's what most people do. You could start with that, I believe you can put up to around 20k in a Livret A.

Once you have a French bank (which you will need, because utilities companies these days tend to insist on payment by direct debit and they usually won't accept non French bank accounts) I'm sure they will offer savings advice. I believe an "assurance vie" can be a good option but I won't try to explain that because I haven't got one, hopefully another poster will be along soon.

Depending on the UK bank or financial institution, many can no longer offer their full range of services to EU residents and some can provide no services in the EU at all, so if your bank is one of those they would be obliged to close your accounts. In any case I would be wary of leaving my savings in the UK if I intended to live long term in the EU, partly because who knows what banking/financial arrangements will or won't be agreed between UK and EU, and secondly because of the exchange rate - if the £ goes on a slide against the € you could suddenly find yourself with a lot fewer euros than you had the day before. Of course the £ might do well and then you would be quids in. I guess it depends how much faith you have in the UK government / how much you can afford to lose without noticing it / how lucky you feel.

Don't give up on the dream Baz!

Last edited by EuroTrash; May 30th 2021 at 6:40 am.
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Old May 30th 2021, 8:13 am
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Default Re: Finances - where to home my hard-earned!

Banking in France is very different to banking in the UK.
For a basic current account you will have a limit on how much of your own cash you can withdraw from an ATM in a week/month.
Your bank card will also have a limit on what you can spend regardless of how much is in your a/c.
The way round this is to pay by cheque. That is one of those paper things that we used to use in the UK.
If you go overdrawn in France or have one of your cheques bounce then the Bank of France can ban you from having a bank a/c in France.
For this reason, there is no cheque clearing in France. The money is available to you when you bank the cheque.
There is also a limit on how much physical cash you can deposit before you are accused of money laundering.
As ET says, you may lose your UK bank accounts and credit cards when you are no longer resident in the UK.
You need to talk to your bank about this.
ISAs are only tax-free to UK residents and the equivalent, as ET has said, are called Livret A and Livret B.
If your need for a bank account is just to pay utilities etc then life is more simple but if you require other services e.g. mortgage or bank loan, then you will get what the bank is prepared to give you.

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Old May 30th 2021, 8:36 am
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Default Re: Finances - where to home my hard-earned!

Originally Posted by cyrian View Post
Banking in France is very different to banking in the UK.
For a basic current account you will have a limit on how much of your own cash you can withdraw from an ATM in a week/month.
Your bank card will also have a limit on what you can spend regardless of how much is in your a/c.
The way round this is to pay by cheque.
Except, fewer and fewer places accept cheques from strangers, i.e. they have signs up saying that due to increasing numbers of bounced cheques they are no longer accepted. In fact they usually allow their regular customers, specially the elderly, to keep on paying by cheque, but if they've never seen you before they're likely to refuse a cheque.
Re the limit on ATM withdrawals and spending, you can always ask for the limit to be increased if you find it too low. With my bank I can request this online from my espace client. It's also possible to arrange an overdraft facility. I wonder if perhaps cyrian's post makes French banks sound more draconian than they really are! but certainly they are a lot less tolerant than UK banks and you have to be careful to keep your finances in good order, because they crack down hard on customers that don't. Saying that, when I was new in France I once took my eye off the ball and didn't have enough funds in my account to pay my monthly direct debits, and I lived to tell the tale. Though I seem to recall there was a penalty, and I've been very careful ever since.
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Old May 30th 2021, 9:08 am
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Default Re: Finances - where to home my hard-earned!

Yes IMHO French banks are a lot less tolerant than UK banks.
I was summoned 3 times to a meeting with my bank because I had dared to deposit more than 4,500€ in cash (the bank's annual limit) into my current account.
This was not to respond to the "team manager" - not "bank manager" but to satisfy someone in head office who was convinced that I was laundering money.
I did not notice the weekly/monthly limits on my account until I read the small print.
I was also not allowed to set up a direct debit on my account unless I phoned the head office (could probably done it in branch) to ask them if they would be kind enough to allow me to do that. Setting up direct debits was blocked on my account until I asked for it to be unblocked.
The OP should not expect to receive the same service that he may be used to in the UK.
He should also make sure that he has all the documents required to open an account.
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Old May 30th 2021, 10:04 am
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Default Re: Finances - where to home my hard-earned!

I've always found the Livret A to pay out peanuts. Life insurance is useful in terms of not being taxed should you pass on, but again rates don't seem to be great. My wife had a good amount of savings with a financial company in Paris - most of the capital was protected and invested in low risk and some of it was in a higher risk category. It was doing okay over the years, but the risky part was invested in commercial real estate which took a nose dive during the pandemic. After losing a small chunk of it, I suggested she take it out and invest it something tangible (bricks and mortar). That in itself is very risky too of course, but we managed to secure a property in a highly desirable area (with a lot of luck involved) where there is next to no annual rentals available, because everyone has brought up the property market as second-homes, which is unfortunate for the locals. Anyway, long story short, rented it very quickly - I always anticipated and accounted for a few minor teething problems (possible appliance replacements, a couple of windows that still require double glazing etc). but ultimately it's going to be a much better investment than keeping it where it was! We may even end up living in it ourselves when we are older.
Anyway I waffle on, but if you have significant savings, I think there are options that give good returns, but they also come with an element of risk. Failing that I guess Livret A and Life insurance are the better options, just don't expect great returns, at least in the current market, maybe things will change in the coming years.
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Old May 30th 2021, 10:25 am
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Default Re: Finances - where to home my hard-earned!

The confusing thing about assurance vie is that it is far more flexible and covers a lot more than English "life insurance", which doesn't give any return until you die and which the French actually call "death insurance" which is more logical when you think about it. As I understand it you can invest in an assurance vie policy that will pay interest or a lump sum to you during your lifetime, or a policy that will pay out to your beneficiary on your death, or a mixture of the two. I don't think it should really be regarded as "life insurance" despite its name.
If you have significant wealth you should probably also start looking into inheritance issues and how to minimise tax under French succession law.

LVC where are you ???
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Old May 30th 2021, 11:15 am
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Default Re: Finances - where to home my hard-earned!

I have a friend who is a retired french accountant and he invests money in a portfolio of rental flats.
If you buy a new-build buy-to-rent then you get tax concessions over a period (I think 10 years).
A local politician who is in the top 20 richest in France regularly buys up new-build property in the names of members of his family.
He approves the developments for his builder friends and buys some of the apartments (probably at a discount) and then his company manages the coproprieté.
Nice little earner.
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Old May 30th 2021, 2:25 pm
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Default Re: Finances - where to home my hard-earned!

Originally Posted by G-J-B View Post
I've always found the Livret A to pay out peanuts. Life insurance is useful in terms of not being taxed should you pass on, but again rates don't seem to be great. My wife had a good amount of savings with a financial company in Paris - most of the capital was protected and invested in low risk and some of it was in a higher risk category. It was doing okay over the years, but the risky part was invested in commercial real estate which took a nose dive during the pandemic. After losing a small chunk of it, I suggested she take it out and invest it something tangible (bricks and mortar). That in itself is very risky too of course, but we managed to secure a property in a highly desirable area (with a lot of luck involved) where there is next to no annual rentals available, because everyone has brought up the property market as second-homes, which is unfortunate for the locals. Anyway, long story short, rented it very quickly - I always anticipated and accounted for a few minor teething problems (possible appliance replacements, a couple of windows that still require double glazing etc). but ultimately it's going to be a much better investment than keeping it where it was! We may even end up living in it ourselves when we are older.
Anyway I waffle on, but if you have significant savings, I think there are options that give good returns, but they also come with an element of risk. Failing that I guess Livret A and Life insurance are the better options, just don't expect great returns, at least in the current market, maybe things will change in the coming years.
The interest rate is 0,50% p.a. and, as said, the maximum amount saved is limited to a little less than 23 000 € at present. The interest is tax-free, and the balance is always accessible. An LDDS ("Livret de développement durable et solidaire") also exists, tax-free on the likewise 0,50% interests, with a maximum limit of 12 000 €, likewise accessible. This gives the possibility of having accessible, tax-free savings of up to 34 000€.
I have a couple of Assurances-Vie (low-risk and relatively stable) which, normally, I won't be redeeming in my life-time. If I do have to, even partially, a "fine" will be deducted. As an anecdote, my former neighbour decided to redeem her Assurance-Vie when she returned to the UK, and the bank deducted 8%, I believe, for redeeming it before she died! The purpose of such an A-V being to invest for one's beneficiaries (related or not). Whether or not they pay tax on it depends on how long the A-Vs have been in existence (none for mine, as the A-Vs were taken out decades ago).. Note that such tax might be more than the Taxe de Succession which children or family might have to pay on the money otherwise invested, but less than what unrelated beneficiaries would have to pay in Taxes de Succession if they are named as heirs. But that's another story.....
@ bazzer70 - The point being, choose an Assurance-Vie wisely, depending on whether you want to forget its existence (but inform your beneficiaries, all the same!), or whether you risk needing money in the future.
HTH
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Old May 30th 2021, 7:58 pm
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Default Re: Finances - where to home my hard-earned!

Originally Posted by cyrian View Post
Banking in France is very different to banking in the UK.
For a basic current account you will have a limit on how much of your own cash you can withdraw from an ATM in a week/month.
Your bank card will also have a limit on what you can spend regardless of how much is in your a/c.
The way round this is to pay by cheque. That is one of those paper things that we used to use in the UK.
If you go overdrawn in France or have one of your cheques bounce then the Bank of France can ban you from having a bank a/c in France.
For this reason, there is no cheque clearing in France. The money is available to you when you bank the cheque.
There is also a limit on how much physical cash you can deposit before you are accused of money laundering.
As ET says, you may lose your UK bank accounts and credit cards when you are no longer resident in the UK.
You need to talk to your bank about this.
ISAs are only tax-free to UK residents and the equivalent, as ET has said, are called Livret A and Livret B.
If your need for a bank account is just to pay utilities etc then life is more simple but if you require other services e.g. mortgage or bank loan, then you will get what the bank is prepared to give you.
if you ask and pay for the appropriate card banking limits can pretty much be on par with the UK. Obviously they start with Carte Blue and work up silver gold platinum etc. We found the standard limit really annoying and opted for one that was a bit more flexible.

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Old May 31st 2021, 7:12 am
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Default Re: Finances - where to home my hard-earned!

Thank you all for the input.
My beneficiaries are nephews and nieces who will be getting a fair inheritance from their parents so I an not too concerned about leaving much! Partner too is well covered!
I plan to spend as much as I can before I die! Just getting the timing right is the challenge!
I think I will end up keeping most of it in UK - there are many banks that allow this I see - just need to make sure the accounts have been opened before I leave.
My Dad (now no longer with us) kept his dosh in Isle of Man when he retired to South Africa - kept a nominal amount in local bank and basically used his UK credit card for day to day living .
He was pretty canny when it came to money - I guess this is what I will end up doing.
Thank you again everybody.
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Old May 31st 2021, 8:24 am
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Default Re: Finances - where to home my hard-earned!

Originally Posted by bazzer70 View Post
Thank you all for the input.
My beneficiaries are nephews and nieces who will be getting a fair inheritance from their parents so I an not too concerned about leaving much! Partner too is well covered!
When you say "partner", depending on your circumstances you should maybe bear in mind that under French succession law, anything and everything you leave to a non-relative is subject to 60% succession tax with a very low tax-free allowance.
So for instance if you purchased a house solely in your name and left it to a non-relative, and the house was worth say 200k, the non-related beneficiary would be liable for over 100k in succession tax.
If you're resident in France then your worldwide assets are covered by French succession law so the same applies to any money or investments you leave to a non-relative, including money and investments in the UK.
Same applies if a non-related (i.e not married and not pacs'd) couple purchase a property in joint names, half and half, and each leaves their half to the other. The survivor pays 60% tax on the value of the half that they inherit.
Nephews and nieces have a fairly low tax-free allowance before they start paying tax, but significantly higher than a non-relative.
Like you say, the best solution is to spend it while you can!
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Old May 31st 2021, 8:34 am
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Default Re: Finances - where to home my hard-earned!

Thanks Eurotrash - I was aware of that but thanks again for reminding me - it comes under the “things we’ll think about later” but it is a very important consideration.
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Old Jun 15th 2021, 2:40 pm
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Default Re: Finances - where to home my hard-earned!

With a Livret A from the post office you get a cash card (low withdrawal limit) and you can get your money out in branch everywhere in France. You can also set up your utility and tax direct debits through the Livret A.
If you intend to mainly use a UK credit card for your day to day expenses you should get one that has no exchange rate loading charge. I use Santander and I also have a Nationwide Gold Card but I don't think that is still available for new customers.
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