ardtihs

can anyone give me guidance on what I need to do in buying property in france to retire to please.
thankyou Ardtihs :

Don

Main problem area is French inheritance law, which you need to check out thoroughly. Probably best to avoid the primogeniture rules (unless that's what you want!)

So check out inheritance law & how to circumvent; CGT and how long you need to survive to avoid; how to buy safely eg using a notaire publique etc.

Do a search here and google.

ardtihs

thankyou for your prompt reply Don
Ardtihs

JAJ

I presume you've thought about issues like:

- what part of France
- can you speak French (or are you willing to learn)?
- legal issues (as Don notes)
- tax issues (eg on your income from the UK)
- healthcare issues
- will you have a support network in France (important as you get older)
- do you want to keep your home in the UK or not?

And so on.

Jeremy

ardtihs

thankyou Jeremy,
Yes I have taken into account most of those items, but 2 items have been brought up I did not think about
1] Inheritance
2] network support in france
Can anyone enlighten me on them please and thankyou once again for those that are supporting me in this. Regards Keith

Don

Who should make a will?

• French Residents: If you are permanently living in France at the time of your death you will be considered to have been "resident".
• Property owners: If you own immoveable property in France, that is, a house, a flat or land.

If your own moveable property in France, for example a bank account, or company shares, a foreign will may be sufficient, but only if you are not resident in France.
Generally, it is best to prepare a will in France for assets located in France. There are circumstances when a foreign will may be used but it is likely be slow and costly. The opportunity for tax planning might also be lost.

How to make a will?

For all practical purposes there are two types of will:

• The holographic will, testament olographe.
  This is most common form of will and it is also the easiest. It is written in manuscript by the testator and is then simply dated and signed by him.
• The authentic or notarial will, testament authentique.
  As the latter name suggests, this is a typewritten will prepared by a notary on the dictated instructions of the of the person making the will, the testateur, who then signs in the presence of either a notary and two witnesses or simply two notaries. After signature the will is registered in the French central register of wills.
• There is a third type of will known as the mystic will.
  It is almost never used, but worth mentioning for its name alone.

Whichever type of will you chose you should always instruct a professional to take your instructions and prepare the document. Do it yourself wills can cause unnecessary problems and expense, and the opportunity for tax planning can be lost.

Gifts, legacies and beneficiaries

In France there is a system of forced heirship under the law.

• A defined proportion of the estate, réserve legale, must be given to specified categories of heirs: héritiers réservataires. Firstly, to your children and issue, and if no children or issue, then parents or, finally, grandparents if there are no surviving parents. The amount they can claim will take into consideration the value of gifts given during your lifetime.
• The remainder of your estate can be left as you wish, quotité disponible. It is possible to ignore these provisions but it is open to the héritiers réservataires to bring a claim for their entitlement.

A spouse is relatively unprotected, though under new laws his/her position has been improved.

Having made a will you can at any time change your mind and instruct your legal advisor make a new will whether to add new beneficiaries or to take advantage of changes in tax exemptions and allowances or changes in your financial situation.

***
What happens to the property when I die?
In England, you are free to dispose of your estate as you wish. In France, you are not. French succession law always applies to French immeubles and your English will or trust is of no effect. This rule applies even if your permanent home is in England and you spend only a few weeks in France every year.

However, this need not keep you from buying property in France, because if things are properly organised, there is no reason why you should not quite simply avoid the rule.

In many cases a simple and cheap solution is to make a French will. Your English will should also be reviewed at the same time. If you do not have a will, French law makes almost no provision for a widow(er) or surviving partner. Depending on your will, the property will usually go to your children (but not your spouse) or if you don't have any, to your siblings and parents.

Legal advice should take into account both French and UK law. We therefore strongly recommend that you consult a French legal specialist to deal with your individual concerns. Stephen Smith of Stephen Smith (France) Ltd (On contact quote ref FPSAMJ) who is an internationally recognised expert in this field.


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Who can I leave my French property to?
To make things simple, assume that you are married with a wife and a child. Under French succession law you would have to leave one-half of your French estate to that child. If you had two children, the proportion would be two-thirds and if you had three or more children, it rises to three-quarters. You would be free to deal with the remaining balance as you wished and may or not as you wish leave it to your widow. However, there are ways of 'cutting in' a spouse to childrens' shares.

Legal advice should take into account both French and UK law. We therefore strongly recommend that you consult a French legal specialist to deal with your individual concerns. Stephen Smith of Stephen Smith (France) Ltd (On contact quote ref FPSAMJ) who is an internationally recognised expert in this field.


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How can I reduce the effect of French succession law?
It is possible to get round French succession rules if you are buying property jointly. When you bought your house in England, you probably bought it jointly with your husband or wife. Your solicitor will have explained to you that there are two ways of owning property jointly. One is that on your death the property passes automatically to then survivor (in English 'joint tenancy', in French en tontine) and the other is that each of you own a part of the property which you can deal with separately (in English 'tenancy in common', in France en indivision). You probably chose the former method and your solicitor would probably have been very surprised if you had chosen the other method.

In France, the same two ways of jointly owning property exist, though for quite different reasons. The French almost always use the en indivision method for the very reason which makes it usually disastrous for the English to do so: it does not avoid the normal French succession rules. The English should (subject to advice) always buy en tontine which is how they would buy in the UK and the property will pass automatically to the survivor.

It is quite impossible to say how many English husbands and wives whop have not been properly advised on this point are horrified to learn that they have made the wrong choice. In fact, usually they have not made a choice at all but have signed papers prepared by a notaire who assumes that English law is the same as French law and that all English couples buy jointly in the same way as French couples. Usually, it is far too late to do anything about it except at great cost. If you are buying jointly, get advice from a lawyer who knows English and French law and who, if the circumstances require, will ensure that the notaire does the right thing.

It is worthwhile giving an example so that you may see how important this is. Remember that if you are not prepared for it, the problem will arise just at the moment when one is least able to cope with it i.e. on the death of a husband or wife. Take the following situation, which is not unusual.

• Mr and Mrs A are married. They have one child. Each has been previously married. Mr A has two children by her previous marriage and they now live with their mother who has remarried. Mrs A had one child by her previous marriage who lives with Mr and Mrs A. Some of the children are under 18 and some are older. Mr and Mrs A have bought a holiday home in France for FrF 750,000. They have bought it by the standard French method of joint ownership (en indivision). Mr A dies. Mrs A owns one-half of the house as her own property. Three-quarters of Mr A's half share is divided among his three children (by his existing and previous marriage) and one-quarter goes, if his will says so, to Mrs A At best, therefore, Mrs A has five eighths of the house and her joint owners now include children whom she may never have known and with those of whom are under 18 she can come to no legal arrangement.
  

It is true that arrangements can be made so that Mrs A can be given a life interest in her husband's share so that she would own one-half outright and one-half she can use for as long as she lives. This is, however, hardly a situation which Mrs A wants to learn of for the first time on the death of her husband, She may well have assumed that because her husband's will in England leaves everything he has to her, she now owns the whole of the house. She is mistaken, however, because French law overrides that will.

If Mr and Mrs A had bought en tontine none of this would have happened. On the death of one of them, their holiday home would automatically have passed to the survivor.

It is true that this method of joint ownership may involve the payment of French inheritance tax whereas the other method might avoid it. Usually, the amounts involved are only a small price to pay to avoid the confusion caused by the imposition of the French law of succession.

There are notaires and others who say that there are dangers in using the tontine method because children who have been 'cut out' can claim to be 'cut in'. Take courage from some recent cases on this point which say that it is almost impossible for children to succeed if care is taken and the documentation is correctly prepared. This applies to any Power of Attorney given by the buyer and to the acte de vente itself. It is worth taking the right advice to ensure that this happens.

There are at least two other methods of circumventing French succession rules. Only the most competent advice can establish if either may be suitable for you. As a general rule, unless your family circumstances warrant it or you are trying to get out of a very difficult succession situation into which you have been put through lack of advice on a purchase, neither of these methods should be indulged in for properties worth less than £100,000.

Do not use an offshore company to buy French property or, worse still, buy the shares in a company which already owns French property. The notaire may not understand the implications but an English lawyer and the French tax authorities will. For instance, the company will be liable to a series of heavy taxes which it may never have paid and thus you may be buying a past and future tax liability

Legal advice should take into account both French and UK law.We therefore strongly recommend that you consult a French legal specialist to deal with your individual concerns. Stephen Smith of Stephen Smith (France) Ltd (On contact quote ref FPSAMJ) who is an internationally recognised expert in this field.


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Tontine ownership
It is possible to get round French succession rules if you are buying property jointly. When you bought your house in England, you probably bought it jointly with your husband or wife. Your solicitor will have explained to you that there are two ways of owning property jointly. One is that on your death the property passes automatically to then survivor (in English 'joint tenancy', in French en tontine) and the other is that each of you own a part of the property which you can deal with separately (in English 'tenancy in common', in France en indivision). You probably chose the former method and your solicitor would probably have been very surprised if you had chosen the other method.

In France, the same two ways of jointly owning property exist, though for quite different reasons. The French almost always use the en indivision method for the very reason which makes it usually disastrous for the English to do so: it does not avoid the normal French succession rules. The English should (subject to advice) always buy en tontine which is how they would buy in the UK and the property will pass automatically to the survivor.

It is quite impossible to say how many English husbands and wives whop have not been properly advised on this point are horrified to learn that they have made the wrong choice. In fact, usually they have not made a choice at all but have signed papers prepared by a notaire who assumes that English law is the same as French law and that all English couples buy jointly in the same way as French couples. Usually, it is far too late to do anything about it except at great cost. If you are buying jointly, get advice from a lawyer who knows English and French law and who, if the circumstances require, will ensure that the notaire does the right thing.

It is worthwhile giving an example so that you may see how important this is. Remember that if you are not prepared for it, the problem will arise just at the moment when one is least able to cope with it i.e. on the death of a husband or wife. Take the following situation, which is not unusual.

• Mr and Mrs A are married. They have one child. Each has been previously married. Mr A has two children by her previous marriage and they now live with their mother who has remarried. Mrs A had one child by her previous marriage who lives with Mr and Mrs A. Some of the children are under 18 and some are older. Mr and Mrs A have bought a holiday home in France for FrF 750,000. They have bought it by the standard French method of joint ownership (en indivision). Mr A dies. Mrs A owns one-half of the house as her own property. Three-quarters of Mr A's half share is divided among his three children (by his existing and previous marriage) and one-quarter goes, if his will says so, to Mrs A At best, therefore, Mrs A has five eighths of the house and her joint owners now include children whom she may never have known and with those of whom are under 18 she can come to no legal arrangement.
  

It is true that arrangements can be made so that Mrs A can be given a life interest in her husband's share so that she would own one-half outright and one-half she can use for as long as she lives. This is, however, hardly a situation which Mrs A wants to learn of for the first time on the death of her husband, She may well have assumed that because her husband's will in England leaves everything he has to her, she now owns the whole of the house. She is mistaken, however, because French law overrides that will.

If Mr and Mrs A had bought en tontine none of this would have happened. On the death of one of them, their holiday home would automatically have passed to the survivor.

It is true that this method of joint ownership may involve the payment of French inheritance tax whereas the other method might avoid it. Usually, the amounts involved are only a small price to pay to avoid the confusion caused by the imposition of the French law of succession.

There are notaires and others who say that there are dangers in using the tontine method because children who have been 'cut out' can claim to be 'cut in'. Take courage from some recent cases on this point which say that it is almost impossible for children to succeed if care is taken and the documentation is correctly prepared. This applies to any Power of Attorney given by the buyer and to the acte de vente itself. It is worth taking the right advice to ensure that this happens.

There are at least two other methods of circumventing French succession rules. Only the most competent advice can establish if either may be suitable for you. As a general rule, unless your family circumstances warrant it or you are trying to get out of a very difficult succession situation into which you have been put through lack of advice on a purchase, neither of these methods should be indulged in for properties worth less than £100,000.

Do not use an offshore company to buy French property or, worse still, buy the shares in a company which already owns French property. The notaire may not understand the implications but an English lawyer and the French tax authorities will. For instance, the company will be liable to a series of heavy taxes which it may never have paid and thus you may be buying a past and future tax liability

Legal advice should take into account both French and UK law. We therefore strongly recommend that you consult a French legal specialist to deal with your individual concerns. Stephen Smith of Stephen Smith (France) Ltd (On contact quote ref FPSAMJ) who is an internationally recognised expert in this field.


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What is an usufruit?
A life interest in French property.

Legal advice should take into account both French and UK law. We therefore strongly recommend that you consult a French legal specialist to deal with your individual concerns. Stephen Smith of Stephen Smith (France) Ltd (On contact quote ref FPSAMJ) who is an internationally recognised expert in this field.


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What about group purchases?
In recent years, thousands of non-residents have bought a property in France to escape from cold winters and wet summers. For many, their personal use of the property is a source of considerable pleasure. Although property prices in France are still generally low, and purchase loans are readily available, many potential buyers are discouraged from purchasing French property for two min reasons. Firstly, they do not want to feel tied down to the same property each year when there are other countries or parts of France to explore. Secondly, their available holiday time is often limited to two or three weeks in the summer and, although friends and relatives may occasionally visit the property, it will otherwise remain unoccupied for the rest of the year.

The clear choice for new buyers wanting to enjoy the benefits of owning and occupying property in France for limited periods only with the reduced costs that such a purchase can bring is to use a non-time sharing method of company ownership (called a société civile immobilière d'attribution à temps partagé or SCIATP) which allows the owners to share ownership with friends or others who have similar interests. As explained below, the use of such a structure can also have significant French succession law-avoidance advantages.

The scheme can apply to a house or part of a house (for example, a flat in a block). A property can be brought within its scope either by being bought by an SCIATP previously formed for that purpose, or a property owned by one or more owners can be transferred to an SCIATP.

This is also the most satisfactory method for an existing owner wishing to reduce his capital burden whilst retaining an interest in his property. For example, the SCIATP acquires the French property from the original owner who then offers for sale as many shares as he wishes (e.g. 75% if he wants to be able to occupy the property for about three months in every year). French law provides precise rules as to the way in which the property must be managed, how management costs are dealt with, the rights of each occupier vis-Ã -vis each other and their rights to deal with their occupancies and generally everything which is necessary for the enjoyment by these shareholders of the property by the company.

The right to occupy the property at agreed times stems from the ownership of shares in the company. The basic rules laid down by French law are strict since they are intended for the protection of the public and cannot in most cases be varied.

The price for the shares will depend not only on the value of the property but also on the periods in the year in which the shares sold give rights to occupation. However, since these periods are likely to be spread over the year over periods of more than (say) six weeks at a time, it is probable that the price for all of the shares will be more or less the same. The sale by the original owner of shares will, of course, give rise to French capital gains tax, but unless the property is of recent acquisition and the owner has benefited from an unusual rise in the French property market, this tax is not likely to be high if it exists at all.

The equivalent of the Articles of Association of an English company are the statuts of an SCIATP. All the basic rules relating to the use of the property are set out in this document. These will cover, in addition to the dates when the property is occupied by shareholders (which can be varied by consent of all the shareholders), the important provisions relating to the transfer of shares during a shareholder's life and on his death.

The normal French rule is that transfers between existing shareholders may be made freely as may transfers on a death to heirs entitled to inherit, or spouses, but this can be varied since the shareholders will be subject to English and not French succession law. Otherwise, the body of shareholders controls who can become shareholders and such a decision requires at least a majority or unanimous vote.

French law specifically requires that shareholders must have the right to let the property they occupy during their period of occupation. The shareholder remains liable to the SCIATP for his tenant's default.

Rules for the holding of meetings of shareholders and for the passing of resolutions by correspondence and similar management procedures follow quite closely what is common form in English companies.

Overall management is in the hands of the gérant who basically takes the place of a director of an English company. He may be appointed or removed by a simple majority vote of the shareholders but the statuts can provide for a larger majority or a unanimous vote. He can, but need not, be a shareholder. It is his duty to act on behalf of the SCIATP subject to such limitation as may be placed on his powers.

The gérant is responsible to report to the shareholders when the annual accounts are submitted. The SCIATP will be liable for taxe foncière (property tax) and taxe d'habitation (local authority tax) but, unless it has income - which is unlikely - for no other French taxation.

He is assisted by an Executive Committee composed of shareholders (the number is fixed in the statuts) whose task is to advise the gérant or the shareholders on all matters relating to the management of the SCIATP which either have been referred to it or which it enquires into of its own volition. It is the recipient of the SCIATP's accounts and has a right to call for production of all documents and papers affecting the SCIATP.

The cost of maintaining and managing the French property will, as with these taxes, be shared out among the shareholders in proportions which will reflect the length of each period of occupation and presumably the date in each year. The gérant arranges for the collection from each shareholder of his share of expenses and, if needs be, may ask for payments on account in advance. There are rules to ensure prompt payment.

Unless the finances of an SCIATP attain a fairly high figure - not likely where only a single house is involved - it is not necessary to appoint auditors, but in that case the SCIATP must appoint an independent qualified person who is not a shareholder to prepare the annual accounts.

The use of an SCIATP is also a useful tool to avoid the adverse implications of French succession law. In brief, French succession law applies to all land, houses and flats in France irrespective of the nationality, domicile or residence of the owner. This put simply, means that children have the absolute right to inherit but surviving spouses have no such rights. Furthermore, if you do not structure joint ownership of French property through an SCIATP or a similar French company, the two alternative methods of joint ownership re likely to cause problems. One method (indivision) was created to deal with property inherited by various members of the family and is quite unsuitable for property which is bought for sharing with other people. The other method (tontine) has the effect of the property belonging to none of the joint owners until the death of all except the last survivor, who then acquires the whole of the property. This is clearly not suitable for owners who are strangers to one another.

The purchase and transfer of French property and the formation of companies in France is the sphere of a notaire practising on French soil. However, any person interested in making use of this scheme either as a means of selling part of his interest in his French property or of buying into such a property on such a basis should consult lawyers in England expert in French legal matters since their residence and/or domicile in England makes this highly desirable.

We therefore strongly recommend that you consult a French legal specialist to deal with your individual concerns. Stephen Smith of Stephen Smith (France) Ltd (On contact quote ref FPSAMJ) who is an internationally recognised expert in this field.


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How can I remain anonymous?
Please contact Stephen Smith (France) Ltd (quote ref FPSAMJ) for further information.


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Can I buy through a company?
Yes. However, please do not use an offshore company to buy French property or, worse still, buy the shares in a company which already owns French property. The notaire may not understand the implications but an English lawyer and the French tax authorities will. For instance, the company will be liable to a series of heavy taxes which it may never have paid and thus you may be buying a past and future tax liability. An SCI (French property-holding company) is usually the preferred alternative.

Legal advice should take into account both French and UK law. We therefore strongly recommend that you consult a French legal specialist to deal with your individual concerns. Stephen Smith of Stephen Smith (France) Ltd (On contact quote ref FPSAMJ) who is an internationally recognised expert in this field.


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What is the 3% annual tax?
A 3% annual tax applies to all companies (French or otherwise) having a head office or centre of administration in France. However, with proper timely advice there are simple ways to avoid payment of this tax.

Legal advice should take into account both French and UK law. We strongly recommend that you consult a French legal specialist to deal with your individual concerns. Stephen Smith of Stephen Smith (France) Ltd (On contact quote ref FPSAMJ) who is an internationally recognised expert in this field.

ardtihs

Thankyou very much Don for taking the time and the trouble of giving me all the relevant information. I shall now make sure I have a will made out when I arrive over in France to live which should be early next year. My sincerest regards to you and i will keep you informed as to how I get on with moving.
kEITH

Miss--Melanie

****You may think this sounds crazy, but my husband and I just bought a house in the Creuse and started a support network by chance....
It seems that Brits approached us.... either knocking on our door or walking up to us at DIY store carparks. They say.... "you speak English....i saw your rental van with a British address, etc......my name is ......... here is my card or other vital info....." So now seven months into this, and only being there occasionally, we have a few close friends with an extended network of acquaintances. REALLY. So we were lucky. I guess it depends on how many Brits are in the area and whether you are willing to be 'forward'.

chrisrowson

Absoloutely, a support network is essential. There are many shady people about nowadays who will offer to flog you French property, but that's where it stops.

I'm assuming that you havn't yet purchased your French property and that you are at the enquiry stage, hence being here which is why you are in the perfect position to help steer yourself away from unscrupulous shiesters.

I'd like to suggest some things for you to look for when embarking upon your French property adventure, when using any type of property agent:

1) If you are contacting a property agent that you have found online, then please ensure that they have British contact details on their site. It's easier for an agent to ignore you if they are in France, and you are in the UK

2) By the same point, ensure that the agent has a contact in France too. That way you can pin them down whether you happen to be abroad or in the UK.

3) Ask the agent what they will do to help you. If their help extends merely to finding the property and helping with the contract keep shopping around, you'll find a better deal. IMO the agent should be able to help you with every aspect of moving abroad including the legal and financial apsects.

4) If you don't speak French fluently, ensure that you have copies of anything that you may be asked to sign written in English. Make sure that the agent certifies the documents accuracy too.

5) If you are purchasing a new build property, ensure that the property carrys a warranty. Also ensure that the build is insured against the builder going bankrupt, you don't want to loose the cash you've invested if they do.

6) Never ever rush into anything. No good agent will rush you into a descision, if they do then step away. You should have the contact details for French and British based agents, and after furnishing you with the information take it away and think about it for a while.

7) Like the poster suggested above. Seek qualified legal advice. It may cost you a sum of money now, but it will certainly pay off in the long run.

I'm sure that I could probably add hundreds more points for you to check. But I think if you adhere to the ones above, you have helped protect yourself a considerable amount.

I think the name of the game is caution and preparation. If you go in with your eyes wide open and in posession of all of the facts, you can have a more pleasent experience in the long run.

ardtihs

Can someone advise me as to whether it is better to take your electricity appliances to France or to buy new when you arrive in France

fesuvious

Only issue is the voltage > Most people I have spoken to suggest buying new 'white-goods' abroad to save having to use converter plugs.

Although £15 on plugs is far less than £700 for new appliances !

ardtihs

Thankyou for your reply I was aware of the voltagebut did not know whether the appliances would be compatable with the voltage even with converter plugs.

fesuvious

If it were me ;

I give a quick and cheeky call to an english speaking electrician in Spain.
Theres bound to be loads !

And get his opinion, after all, if you find one local to where you plan to move he'd be delighted at contact with another potential customer anyway.....

Cheers
matt

ardtihs

I will take that into consideration thankyou Keith

ardtihs

New question, can we take HOUSE/ GARDEN plants and shrubs into France when we move.