Details of the changes to the charges were made by President Emmanuel Macron during a television address that was designed to pacify the anger of protesters in the country. Macron said that proposed increases to the contribution sociale généralisée (CSG) rate would be shelved for any person living on less than €22,850 a year.
As result only 30% of retirees will now have to pay the increased rate of CSG.
Expats and pensions exemptions
Furthermore, any expat living in France who carries an ‘E’ form, S1 health certificate, or who receives a government service pension will be exempt from additional charges as they qualify for 100% relief against the social charges on their pension income – any additional pension income will be subject to the charge unless additional exemptions apply.
Calculating liability
The amount of charges applicable to an expat will depend on their total taxable income – i.e. pension income, investment income and salary income.
Spouses are subject to a common rate. This is true regardless of whether one spouse could have claimed an exemption or different rate.
However, expats who are hoping to enjoy the more preferential rates will have to wait until the summer, following the submission of their 2018 tax return, at which point they may receive a rebate for any money they have overpaid in social charges since January 2019 (the date at which the new CSG charges took effect).
Prélèvement de Solidarité – different dates for different income
If an expat does not receive French state healthcare and instead receives it from another EU or EEA country, they will be subject to a flat rate 7.5% tax under the Prélèvement de Solidarité system.
Prélèvement de Solidarité does not apply to all types of income from the same date. Investment and passive income are only eligible for the tax from 1st January 2019; in contrast most capital gains and rental income from unfurnished properties are eligible from 1st January 2018.
Expat wealth management in France
Blacktower Financial Management can help you with your expat wealth management, including expat tax planning in France, to help you ensure that your investment, pensions and rental income is optimised to your best possible benefit.
Contact us today for information and advice.
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.
A SIPP transfer may offer many benefits, including greater investment flexibility and exemption from capital gains and income tax; however, a SIPP is not suitable for every retirement investor and independent expat financial planning advice should always be sought before committing to a SIPP pension transfer.