France’s reputation for fine wine, art, and a relaxed lifestyle attracts thousands of expatriates each year — particularly from the UK and the US. Yet while life in France offers beauty and balance, it also introduces a complex financial landscape.
One of the most important aspects of moving to (or living in) France is understanding how French tax rates affect your income, pensions, and investments. Whether you’re working, retired, or managing global assets, being tax-aware ensures your finances remain efficient, compliant, and stress-free.
At Blacktower Financial Management, our advisers specialise in cross-border financial planning, helping UK and US expats in France navigate the intricacies of the French tax system.
Here’s what you need to know about French tax rates, how they’re applied, and how to manage them effectively.
1️⃣ How the French Tax System Works
France has a progressive tax system, meaning that the more you earn, the higher the rate of income tax you’ll pay. Unlike some other countries, tax in France applies to households, not just individuals — meaning couples or families can often benefit from reduced liabilities.
French income tax covers worldwide income for residents and French-source income for non-residents. You’re considered a French tax resident if:
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Your main home (foyer fiscal) is in France.
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You spend more than 183 days per year in France.
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Your principal economic interests are based in France.
Key Types of Tax in France
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Income Tax (Impôt sur le Revenu) – on employment, pensions, and investment income.
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Social Charges (Prélèvements Sociaux) – applied to most income sources, including pensions and savings.
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Wealth Tax (Impôt sur la Fortune Immobilière – IFI) – applied to high-value property holdings.
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Inheritance and Gift Tax (Droits de Succession et de Donation) – based on the relationship between the giver and recipient.
2️⃣ French Income Tax Rates (2024–2025)
As of the 2024–2025 tax year, France’s income tax rates for residents are as follows:
| Taxable Income (per household part) | Tax Rate |
|---|---|
| Up to €11,294 | 0% |
| €11,295 – €28,797 | 11% |
| €28,798 – €82,341 | 30% |
| €82,342 – €177,106 | 41% |
| Over €177,106 | 45% |
These rates apply progressively — meaning that only the portion of income above each threshold is taxed at the corresponding rate.
The “Parts” System
France’s family quotient system divides household income by the number of “parts” (shares), which helps determine tax liability.
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A single person = 1 part.
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Married or civil partners = 2 parts.
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Each child adds 0.5 part (for the first two) and 1 full part thereafter.
This system benefits families by lowering the effective tax rate compared to individual taxation.
3️⃣ Social Charges (Prélèvements Sociaux)
In addition to income tax, most forms of income are subject to social contributions. These charges fund France’s healthcare and welfare systems and can be substantial.
Current Social Charge Rates
| Income Type | Rate (approx.) | Notes |
|---|---|---|
| Employment income | 9.7% – 12.8% | Paid through payroll. |
| Pensions | 7.4% – 9.1% | May vary by residency status. |
| Investment income | 17.2% | Includes dividends, interest, and rental income. |
However, expats who are not affiliated with the French social security system (e.g., those covered by another EU country or under the UK’s post-Brexit Social Security Agreement) may be exempt from some of these charges — paying instead a solidarity tax (Prélèvement de Solidarité) of 7.5%.
Understanding whether you qualify for exemption is essential and can have a major impact on your net income.
4️⃣ Capital Gains Tax (CGT)
If you sell property, investments, or other assets in France, you may be liable for Capital Gains Tax (Impôt sur les Plus-Values).
Property Gains
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Main residence: Exempt from capital gains tax.
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Second homes or investment properties: Subject to 19% CGT plus 17.2% social charges, bringing the total to 36.2%.
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Reductions apply for longer ownership periods — full exemption after 22 years for CGT and 30 years for social charges.
Investments and Shares
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Gains from investments are taxed at a flat rate of 30% (Prélèvement Forfaitaire Unique) — including 12.8% income tax and 17.2% social charges.
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Alternatively, taxpayers can opt for progressive income tax rates if more favourable.
5️⃣ Wealth Tax (IFI)
France no longer levies a general wealth tax, but it does apply Impôt sur la Fortune Immobilière (IFI) to property assets.
This tax applies to property holdings worth over €1.3 million, whether located in France or abroad (for residents).
IFI Rates
| Taxable Property Value | Rate |
|---|---|
| Up to €800,000 | 0% |
| €800,001 – €1.3 million | 0.5% |
| €1.3 million – €2.57 million | 0.7% |
| €2.57 million – €5 million | 1% |
| €5 million – €10 million | 1.25% |
| Over €10 million | 1.5% |
Only the net property value (after loans and deductible expenses) is taxable.
6️⃣ Inheritance and Gift Tax
France applies Inheritance and Gift Tax based on the relationship between the deceased (or donor) and the beneficiary — not simply the total estate value.
Tax-Free Allowances
| Relationship | Tax-Free Allowance (approx.) |
|---|---|
| Spouse or civil partner | €80,724 |
| Child (per child) | €100,000 |
| Grandchild | €31,865 |
| Sibling | €15,932 |
| Unrelated person | €1,594 |
Beyond these thresholds, inheritance tax rates range from 5% to 45%, depending on the relationship and the amount inherited.
Unlike the UK, inheritance tax is paid by the recipient, not the estate — making pre-planning crucial for expatriates with family both inside and outside France.
7️⃣ How to Reduce Your Tax Burden
France rewards proactive planning. By structuring your wealth appropriately, it’s possible to reduce overall taxation significantly.
Common Tax-Optimisation Strategies
✅ Assurance Vie Policies – Tax-efficient investment wrappers that allow capital growth and withdrawals under favourable tax rules.
✅ Pension Restructuring – UK expatriates may benefit from QROPS or SIPPs, optimised for tax efficiency in France.
✅ Asset Diversification – Spreading investments across multiple asset classes and currencies helps minimise risk and manage tax exposure.
✅ Estate Planning – Using trusts, wills, or insurance solutions ensures wealth passes efficiently to beneficiaries.
Working with a qualified financial adviser ensures every part of your financial plan — from pensions to property — aligns with your residency, goals, and obligations.
8️⃣ How Blacktower Can Help
At Blacktower Financial Management, we’ve been advising UK and US expatriates across Europe since 1986. Our wealth management experts in France help you:
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Understand your tax residency and liabilities.
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Structure your income and assets for long-term efficiency.
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Plan retirement and pension withdrawals in a compliant, tax-optimised way.
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Build a financial strategy that adapts to life in France.
Whether you’ve just relocated or have lived in France for years, our role is to provide clarity and confidence in your financial future.
📞 Book your complimentary consultation today
Speak to one of Blacktower’s experienced financial advisers in France and discover how to make the French tax system work for you.