Are you planning a move to France, or have you already settled into your new life there? No matter where you are in your journey, one of the most important steps you can take is preparing for the French tax system. Aligning your wealth management strategy with French rules may help you protect your assets, reduce unnecessary exposure to taxation, and secure your financial future.
France’s tax regime can appear complex, but with professional advice it also presents opportunities. From pensions to investments, estate planning to succession law, careful preparation can help you and your family navigate the system more effectively.
When Do You Become a French Tax Resident?
You are considered tax resident in France if any of the following apply:
- France is your main home (foyer). This usually means where your close family habitually lives.
- France is your principal place of abode, typically spending more than 183 days there in a calendar year.
- Your principal professional activity is in France.
- France is your centre of economic interests.
Residency usually begins the day after you arrive in France to live there indefinitely. From then on, you are liable to French tax on your worldwide income, gains, and—if applicable—real estate wealth.
Key French Taxes to Plan For
Income Tax
Income tax is assessed at the household level, not the individual, which can sometimes prove beneficial. It is paid in arrears, with progressive rates published annually.
For 2024 income (taxed in 2025), the bands are:
- 0% up to €11,497
- 11% from €11,497 to €29,008
- 30% from €29,008 to €82,341
- 41% from €82,341 to €180,294
- 45% above €180,294
An additional 3%–4% surcharge may apply on high incomes above €250,000.
(Figures correct as of 2025; subject to change.)
Social Charges
Social charges are levied in addition to income tax:
- 9.7% on employment income
- 9.1% on pension income (7.4% for lower earners)
- 17.2% on investment income
Retirees holding a Form S1 (generally those with UK state pensions covered by reciprocal agreements) are exempt from social charges on pensions and benefit from a reduced 7.5% rate on investment income.
Investment Income: The Flat Tax
Most investment income is subject to the Prélèvement Forfaitaire Unique (PFU), a fixed rate of 30% that includes both income tax and social charges. This reduces to 20.3% if you qualify for an S1. Some taxpayers may benefit from opting into progressive income tax rates instead, depending on personal circumstances.
Wealth Tax on Real Estate
The French real estate wealth tax, Impôt sur la Fortune Immobilière (IFI), applies annually to households with real estate assets exceeding €1.3 million.
- The first €800,000 is exempt.
- Rates then range from 0.5% to 1.5%.
(Figures correct as of 2025; subject to change.)
Succession Tax
Inheritance tax in France is applied on each beneficiary individually:
- Transfers between spouses and PACS partners are exempt (but gifts are not).
- Children benefit from higher allowances and lower rates.
- More distant relatives, stepchildren, and unmarried partners face much lower allowances and rates as high as 60%.
This makes succession planning particularly important for blended families and those in non-married relationships.
Estate Planning in France
French succession law differs from the UK. Children are regarded as protected heirs, which means you cannot always leave your entire estate to your spouse.
The EU Succession Regulation allows expatriates to elect for the law of their nationality to apply to their estate. While this can provide greater flexibility, it may not always prevent claims from protected heirs relating to French property. Cross-border advice is essential to evaluate your best options.
If you are purchasing property in France, the form of ownership (for example, joint ownership, tontine, or company structures) can have succession and tax implications. Establishing the most suitable approach early on may help avoid complications later.
Pensions and Retirement Income
For many British retirees, pensions are a key financial consideration when moving to France.
With UK reforms due in 2027, most pensions will fall within UK inheritance tax. Reviewing your options is therefore vital.
- QROPS (Qualifying Recognised Overseas Pension Schemes): A QROPS may provide benefits such as currency flexibility, wider investment choice, and estate planning options. However, transfers are now often subject to a 25% overseas transfer charge, and suitability depends entirely on your personal circumstances.
- Lump Sum Option: In some cases, it may be possible to take your UK pension as a lump sum and pay 7.5% income tax in France, plus social charges unless you hold an S1. The capital can then be reinvested in tax-efficient arrangements.
As pensions are complex and heavily regulated, professional advice is essential before taking any action.
Planning Before You Move
If you have not yet relocated, planning ahead can make a difference. The timing of asset sales, pension withdrawals, and property purchases can all affect your overall tax position.
By understanding the differences between the UK and French systems, and structuring your move accordingly, you may be able to:
- Reduce exposure to capital gains tax.
- Align pension withdrawals with the most favourable tax treatment.
- Optimise succession and estate planning for your heirs.
Why Professional Advice Matters
Effective wealth management is not only about taxation. It also includes pensions, investments, and succession planning. France offers a range of tax-efficient solutions, but their suitability depends entirely on your circumstances.
Because relocating involves navigating both the UK and French tax systems, working with a cross-border adviser ensures that your planning is joined-up, compliant, and tailored to your needs.
This communication is for informational purposes only and is not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. You should seek advice from a professional adviser before embarking on any financial planning activity. Whilst every effort has been made to ensure the information contained in this communication is correct, we are not responsible for any errors or omissions.