Moving to France is a popular choice for UK expats to go for retirement. A survey conducted in 2006 showed that there were 200,000 Brits living in France. Estimates today figure that statistic to be around 300,000.
If you are considering retiring in France, there are some new tax rules coming into effect which you need to be aware of and should seek advice from a specialist today. If you have transferred your pension into a QROPS pension scheme in France or considering moving your scheme, please be aware that new tax regulations are about to come into play.
Foreign nationals who have worked in the UK or British ex-pats who draw a cash lump sum from a QROPS when residing in France should pay income tax on any payment that is more than £5,000 (6,000 EUR).
Those in the upper income bracket could pay tax at 41% if they cash in their pension lump sum in France. This lump sum will be either 30% or 25% depending on the QROPS scheme and juridiction.
Personal allowance for income tax in France is 10%, but you would still be faced with a sizeable tax charge on the lump sum.
We are suggesting that anyone moving to France and deciding to move permanently abroad should take their lump sum before leaving.
Ex-pats who are living in France should have the forethought to figure out the impact of income tax before deciding on where or whether to take a lump sum.
In order to protect your estate, you should speak with a QROPS specialist first.
The rules apply not only to a QROPS, but also lump sums paid under many other types of pension scheme.
This tax is applied to all QROPS and not just French QROPS.
Government and local government pensions are not hit by the ruling, but some lawyers suggest that the French government may broaden the legislation to get more money from these as well.
Anyone looking to move or retire to France should contact a professional QROPS adviser ASAP. You can speak to a QROPS specialist today at: