We don't live in our lovely house near Riberac in the Dordogne. We do spend at least 6-8 weeks there every year.
We did have a dream 25 years ago that we would retire early and emigrate to France. That didn't happen, mainly due to the arrival of 6 grandchildren over several years and strong family and friends ties here in the UK.
However, life moves on and the grandchildren are (too) quickly approaching adulthood.
We are now considering the 6 months here and 6 months there option. Has anybody else followed this path? What are the implications for...
Insurance, health care, tax etc.
We are retired and self sufficient so luckily don't need to rely on work and/or any benefits.
Intention is to spend April to the end of September in our English residence, whilst continuing to let the Riberac house for summer holiday rentals. Then live in chez nous from October to the end of March.
Quite understand the vagaries of the weather in both localities, mild Autumns and earlier Springs is part of the attraction of french living, but experiencing an extended stay with our friends and neighbours there too.
We do speak good french, but hopefully a longer stay would take it to a higher level.
Any thoughts would be appreciated?
We have found our notaire in France to be most informative about matters regarding tax, cgt, inheritance etc in France. Our local one is in Villefranche de Lonchat and speaks sufficient English to help you understand if your French competency in land and tax law is a little lacking. I have never had to pay for any advice from them and I assume that they are up to date a it is their job to be.
Good luck.
Mindbender! Fortunately, there is no urgency for us to move, so naturally, we'll take our time (and some expert advice).... or buy a gypsy caravan and "slide under the net". Perhaps one of the kids will want us to move in with them (not sure about that option)?
I wouldn't worry too much about CGT on the French house as the index point will be when you bought the UK house (before that the French house will not be liable for UK CGT) and the likelihood that it would increase in value by more than the annual allowance is vanishingly small unless French property prices take off to an entirely unexpected extent. As I understand it they are still falling in most areas. Ours would certainly not sell for what it has cost us (inc conversion costs) since we bought at 70% of asking price in 2010. You shoudl also consider whether you would be better to remain tax resident in France (check the rules for residency in UK - complex and to be found on HMRC website) or change to UK residency when you make the move to UK initially. It will depend a lot on your income and allowances (eg "parts " in France and personal allowances in UK and ability to split your UK income between you and (?) wife in UK. Again one for specialist advice and a few spreadsheets.
Thanks Michael. Regarding the Capital gains tax issue..... surely, if I make my newly purchased uk residence my primary residence, then I would then be liable for CGT on my French home.. as its status would change?
Longer term, I hope to slowly but surely return back permanently to the UK, so my thinking is that I keep the French house as the primary residence until I finally decide to sell...and then make the uk home our one and only property.
The SDLT issue is something I hadn't considered.. so thanks again.
SDLT = Stamp Duty Land Tax . The change is that HMRC now considers an overseas home in the context of whether or not a house bought in UK is a second home (and thus liable for the surcharge on SDLT (3% so quite significant|). Previously I think only an extra home in UK would have counted. This may or may not have been implemented so take advice before you buy. The other development is that even if you are not tax resident in UK if you spend more than 90 days a year in UK you can nominate your UK house (only one) as your Primary Personal Residence (PPR) in UK and thus it will not be liable for CGT on sale. If you don't do this it will be liable for CGT (Capital Gains Tax) on any profit on sale. The rules are complex and you shoudl take advice from an accountant experienced in these matters.
Just a big thank you to all those that have replied. Appreciate your time and informative responses.
Cheers
paul
Michael et al... firstly, thank you for the additional info you have provided. Secondly, could you spell out what the new rules on overseas homes are (and the acronym SDLT surcharge)?
Correction: 183 days or more for tax residence.
Deleted as duplicated above. I meant to put it as a reply under Paul Rupa's post.
Paul Rupa - If you are a UK citizen you will remain entitled to all the services of the NHS as you are now following a change in the rules in April 2016. The new rules on overseas homes may affect the status of your UK house and the liability for the SDLT surcharge when you buy it.
Very good points especially the last. I wonder how many of the politicians urging us to Remain have their eye on a lucrative future as an EU Commissioner after they leave Westminster?
Wow! You've certainly picked an interesting time to make the decision.
The magic numbers are not 6 months but 183 (or to be safe 182) days which determines your country of residence for tax purposes. You will also need to take into account the change of rules by HMRC about including houses outside UK in the assessment of the status of your house in UK as a PPR.
If UK leaves the EU then you may also find that you will have to limit each visit to France to less than 90 days as the UK participation in Schengen arrangements in EU might be suspended or removed. If you opt to be resident in France this would not apply but it might be worth completing the formalities sooner rather than later as it will be pretty straightforward while UK is in EU but a bit more complicated if it leaves.
You will need to consider carefully the tax implications of residency in either country. If you opt to remain UK resident and limit your trips to 90 days each time (you can do another 90 days after a few days gap out of France)you might be able to rely on an extended health insurance cover such as used to be available with the Black Master Card (but no longer unless you already have one) which covers you for up to 90 days with generous upper age limits at entry. Current UK NHS rules allow you to arrange healthcare in UK even if you not a UK resident and under the rules which allow you to have treatment in the EU at NHS expense you may also be able to arrange (through your UK GP) for treatment in France if UK remains in EU (and maybe if it doesn't depending on what is subsequently agreed).
A lot to take into account but, depending on your personal circumstances and income (including its origin) the finances may turn out to be quite finely balanced although this is always subject to the caveat that today's rules may not be tomorrow's. We are all hostages to our host Governments.
I wonder if the best arrangement might not be the reverse of what you propose. Winter in France can be pretty cold and summer in UK (depending on where you live) somewhat uncertain.
We are a bit South of you in the SE corner of Gironde and find that April to October in France suits us pretty well. The weather is good and generally not too hot, the excellent evening markets locally are in full swing and its a quiet time in the vineyards so visits and tastings are welcome apart from during the Vendange in September. We can eat in the garden most evenings between May and October. Winter in rural France can be a bit desolate as many restaurants are shut and French people tend to stay at home in the winter evenings.
Tax residence is 181 days or more within the tax jurisdiction, where the primary residence is plus where your primary means of incomr arises.
EHIC. If you receive a UK pension and are a British citizen, the EHIC is issued by the UK.
Reciprocal health care between Countries currently in the EEA has existed for some time and prior to the EU (1992). I know this from personal experince as a frequent traveller to Europe on business, getting a form (renewable annually) from DHSS (as it then was) in the 1970s for emergency treatment. UK also has arrangements with some Countries outside the EU, Australia for example.
The fear-monger machine is working overtime at the moment, and there is no reason to suppose that reciprocal emergency health cover arrangements, as well as many of other stuff, will automatically cease with Brexit.
Other EU Countries have their citizens in the UK and benefit from UK tourists visiting and second home owners, so it is in every one’s interest to keep certain arrangements going.
Remember the joke: How can you tell if a politician is lying? Watch to see if his/her lips are moving.
Personally I would choose to full time it in France and let the grandchildren etc come and visit you there. Never found the UK an attractive place to live versus the same season elsewhere I’ve been.
My wife and I are contemplating the same journey - only in reverse to you.
We have been here full time for the last 14 years or so, but would like now to see more of family and friends in the UK.
I make the assumption - and it is an assumption (so everything I write below are just my thoughts) - that ones designated primary residence determines the outcome of any Tax, Health and Insurance issues. So, for example, I currently do not pay any UK income tax - I pay into the French system. If I buy a property in the UK, I will be liable for Council Tax and utility bills, but little else (there may be issues around Inheritance tax, but that's it).
I will therefore continue paying income, property and residence taxes in France. I will still be in the French system for health purposes. And depending on the outcome of the Brexit referendum, I will still be able to use the NHS if the need arises (using my EHIC - the old E111).
As long as I don't overstay my welcome in either country (is it 180 days?) I am assuming that's me sorted.
The only way we would differ from you is that we do not plan renting either place. Should you rent your place in France, surely you would be liable to pay some income tax in France?
Hope this helps.... or at least invites someone more knowledgable than I to enter the debate...because, like you, I need some facts.