French Tax

Old Jan 15th 2011, 11:11 am
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Default French Tax

New here, so sorry if this subject is a common one! I am currently considering early retirement, and a move to France. I have read the complicated summaries of local and national taxes, health insurance and so on, but am left little wiser as to whether my pension will be worth more, or less in France.

Firstly (and obviously without being held accountable for tax advice!), does anyone have any views on whether a couple, with joint pension income of say £40k, would be better or worse off living in France?

Secondly, is there an easy way or reference to help me actually do some sums.

(Final point, if I move to France, will I need to surrender my UK ISAs?)
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Old Jan 15th 2011, 11:43 am
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Default Re: French Tax

To be honest after six years living here, I don't think the cost of living is very different over all. You spend more on health cover, income tax rates are generally more favourable and property taxes are similar, although they vary widely depending on where you live. We find food and household shopping more expensive here than the UK, but also find less to go out and spend our money on. We do a lot of shopping in the UK for clothes, household items etc.; we live in Normandy, so it is quite easy for us to pop over with the car a few times a year. You will need to work out how you will get health cover as private insurance is very expensive, Your budget sounds pretty healthy, though. Property is, of course, much cheaper, but it is important not to get carried away and buy a big house with land just because you can
Re-reading your op I think you were probably asking more about tax than general cost of living (sorry!). I think the general principle is that income tax rates are lower, but socal charges are higher here. Of course, if you have a pension from the civil service or local government then that gets taxed in the UK anyway and is then declared on your French tax form. Sorry haven't a clue about ISAs.
Biggest factor of all is, of course, the exchange rate. We started on 1.50 something and have been down to parity. It seems to us that the rate always drops on the day of our monthly transfer!

Last edited by EmilyA; Jan 15th 2011 at 12:04 pm.
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Old Jan 15th 2011, 5:15 pm
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Default Re: French Tax

Hi Griff
It isnt just taxation you need to consider.
You will be covered for 2 years health cover because of your NI contributions in the UK. Thereafter, there will be a gap until you are at pension age (65 for a man). If there is a gap then you will need to provide cover for yourself that includes any prescription medicines you need. In any case you need top-up insurance to complement the state system.
If you browse thro the forum you will find all sorts of topics that you need to consider.
There have been threads about the availability of residential or care homes for elderly brits in France.
What happens if you wish to return to the UK?
The currency exchange rate is crucial to your standard of living in France.
Have a good search and I am sure that you will have more questions to ask.
Good luck
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Old Jan 15th 2011, 5:53 pm
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Default Re: French Tax

Expats in France have traditionally sent things home to the UK.
Nowadays, the traffic is in the opposite direction.
Recent posts have been about importing car tyres into France from the UK; also building materials; clothes are almost a certainty to import.
I think that might tell you about the cost of living in France in 2010.
Have you considered renting in France for a year to give it a try before you make a final decision?
Plenty of people in this forum have successfully made the move to France but others have not been so successful.
If you do your homework properly then you are less likely to get it wrong.
Happy hunting
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Old Jan 16th 2011, 2:17 pm
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Default Re: French Tax

Originally Posted by Griff1234
New here, so sorry if this subject is a common one! I am currently considering early retirement, and a move to France. I have read the complicated summaries of local and national taxes, health insurance and so on, but am left little wiser as to whether my pension will be worth more, or less in France.

Firstly (and obviously without being held accountable for tax advice!), does anyone have any views on whether a couple, with joint pension income of say £40k, would be better or worse off living in France?

Secondly, is there an easy way or reference to help me actually do some sums.

(Final point, if I move to France, will I need to surrender my UK ISAs?)
Originally Posted by EmilyA
To be honest after six years living here, I don't think the cost of living is very different over all. You spend more on health cover, income tax rates are generally more favourable and property taxes are similar, although they vary widely depending on where you live. We find food and household shopping more expensive here than the UK, but also find less to go out and spend our money on. We do a lot of shopping in the UK for clothes, household items etc.; we live in Normandy, so it is quite easy for us to pop over with the car a few times a year. You will need to work out how you will get health cover as private insurance is very expensive, Your budget sounds pretty healthy, though. Property is, of course, much cheaper, but it is important not to get carried away and buy a big house with land just because you can
Re-reading your op I think you were probably asking more about tax than general cost of living (sorry!). I think the general principle is that income tax rates are lower, but socal charges are higher here. Of course, if you have a pension from the civil service or local government then that gets taxed in the UK anyway and is then declared on your French tax form. Sorry haven't a clue about ISAs.
Biggest factor of all is, of course, the exchange rate. We started on 1.50 something and have been down to parity. It seems to us that the rate always drops on the day of our monthly transfer!
Welcome to the Forum Emily and Griff, Cost of living is pretty moot between the UK and France as has been described income tax only works out better here for Families really .
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Old Jan 16th 2011, 9:46 pm
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Default Re: French Tax

Leaving aside the fact that where your tax liability rests is not a matter of choice there is lots of info here:

http://www.french-property.com/guide...ation/taxation

Regarding ISA's et al, generally you can keep your existing investments but cannot take out new ones.
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Old Jan 23rd 2011, 10:35 am
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Default Re: French Tax

Originally Posted by Griff1234
New here, so sorry if this subject is a common one! I am currently considering early retirement, and a move to France. I have read the complicated summaries of local and national taxes, health insurance and so on, but am left little wiser as to whether my pension will be worth more, or less in France.

Firstly (and obviously without being held accountable for tax advice!), does anyone have any views on whether a couple, with joint pension income of say £40k, would be better or worse off living in France?

Secondly, is there an easy way or reference to help me actually do some sums.

(Final point, if I move to France, will I need to surrender my UK ISAs?)
There is a good article on taxation here:
http://www.lost-in-france.com/living...em-at-a-glance

It is generally accepted that your tax bill in France would be lower than in the UK, HOWEVER, you need to also calculate the cost of Healthcare and Social charges (CSG). The social charges may be substantial, depending on the source of your income and whether you qualify for an S1 (formerly E106 or E121) for your healthcare.

It it not possible to say whether your pensions would be worth more here without knowing a lot more about the type of pensions they are.

You can keep your ISAs but they are not tax-free in France, and would also be subject to CSG.
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