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Mary Taylor is holding seminars in Carcassonne on 4th October [Domaine d’Auriac} and Biarritz [Hotel du Palais] on the 5th October, both 10.30 for 11am. The subject is “Protecting your wealth has never been more important” and the seminar reviews this year’s tax reforms, what more we can expect in 2013, and how these and other factors can impact your wealth. Contact Mary on the telephone or email above for more information or to reserve your place, or book online by clicking here.


How Will The Next Round Of Tax Measures Affect You?


By David Franks, Blevins Franks Financial Correspondent


The government is looking to save €36.9 billion through its 2013 Finance Bill, saying that everyone will play a part. The budget proposals, unveiled on Friday 28th September, include €12.5 billion of cuts; €10 billion of extra taxes from individuals and €10 billion from taxes on corporations. It will also receive €4.4 billion of additional tax revenue from the new taxes announced in July.


The key personal tax measures are summarised below. At this stage they are still proposals and need to go through parliament before becoming law, and so may change.


Taxation of income from capital


Right from the beginning, President François Hollande said he wanted ensure that income from capital is taxed at the same rate as income from work, and it looks like this will start to apply from this year’s income.


Investment income will be taxed as employment income (from 2012), so at the scale rates of income tax. A withholding tax will be introduced at 21% for dividends and 24% for interest, which will be deductible from the final tax payable at the scale rates.


Gains on shares and securities will also be taxed at the scale rates (from 2012). This will also apply to the exit tax for individuals who leave France after 28th September 2012.


Do not forget that 15.5% social charges are always also applied to interest, dividends and capital gains.


Gains on property


Gains on immoveable property (not including development land) will remain taxable at the 19% fixed rate, plus social charges, but with a special 20% deduction against the taxable gain and current deductions for length of ownership. This will apply from 2013.


Gains on development land will be taxed at scale rates from 2015.


New higher tax rates


A new marginal rate of income tax of 45% will be imposed on income in excess of €150,000.


Anyone who earns over €1 million a year from employment or self employment income will have to pay 75% tax on the excess. This would take into account other contributions paid, so the taxpayer would not have to pay social charges on top of the 75% tax (on the income over €1m). This is only meant to be effective for 2012 and 2013.


Income tax bands frozen


Even if you are not affected by the higher tax rates, you may still have to pay more income tax next year (for 2012 income) since the income tax bands are to be frozen, instead of indexing them to inflation.


Wealth tax


The government had been planning a major wealth tax reform, but has now proposed that wealth will continue to be taxed at scale rates of tax next year, as follows:


Taxable wealth € Tax rate


Up to 800,000 0%


800,000 – 1,310,000 0.5%


1,310,000 – 2,570,000 0.7%


2,570,000 – 5,000,000 1%


5,000,000 – 10,000,000 1.25%


Over 10,000,000 1.5%


The entry level for paying wealth tax will be €1.31million. A reduction will apply to wealth between €1.31 million and €1.41 million.


The Constitutional Court had warned the government that any plans to restore the former wealth tax scale would have to be accompanied by a cap mechanism to ensure that the tax is not confiscatory. The government is now planning to introduce a fiscal cap of 75%, whereby a taxpayer cannot pay more than 75% of their income in wealth tax, income tax and social contributions. No such cap applied in 2012.


For advice on the 2012 and 2013 tax measures and how to lower your tax liabilities in France contact your local Blevins Franks Partner, Mary Taylor.


The tax rates, scope and reliefs may change. Any statements concerning taxation are based upon our understanding of current taxation laws and practices which are subject to change. Tax information has been summarised; an individual should take personalised advice.




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Rob if you wish to discuss advertising on SFN please email James directly. Thanks.

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OK,OK! I apologise for believing that SFN were paid to advertise the Blevins seminar. To be fair though, I think you're daft to send out an advert like that and not get paid for it... Does that mean that the box adverts are free too?

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A free seminar! Thanks James for the info. As Carcassonne is only 40 mins from me, I might be able to get along there next week. Very timely in view of the new budget announcements.

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Rob - I think you ought to apologise for your initial insinuation that James posted that having been paid by Blevins. Here is your comment:

Blevins cross your palm with silver, and you email all the members on your list advertising an event designed to increase their client base.

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I can assure you that there is no insinuation that you are taking advantage of the trust of your members, other than you own perception. You sent out a post that appeared to me to be blatant advertising. The information itself is I agree relevant and topical. The invitation to contact a specific individual and to follow a link to sign up for a seminar is advertising, and it doesn't seem to me that that should be what SFN is about. But hey, It's your site. As you say, all I have to do is unsuscribe, if you haven't already done it for me.

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I posted this because it is relevant and topical. I am offended at your insinuation that I am taking advantage of the trust of our members, but if anyone else feels that way then please let me know so that we can modify our approach.

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Hi James. Our last posts crossed, I hadn't seen your's when I posted mine. Fine, you didn't recieve any payment, I'm glad to hear it. I'll be even more pleased to hear that SFN members aren't going to be subjected to direct advertising as this appeared (very much) to be. I'm really not looking for equal treatment here, and I've never been a great believer in level playing fields. A good slope is much more fun. This is why it is unfortunate that the item is so close to home, being a financial seminar. If you'd been pushing cat food it would be a lot easier to make my point. Sorry I misspelt Catharine's anme earlier by the way.

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Rob

I wasn't aware that Spectrum were running seminars too. Now that you have brought that to my attention I will be happy to post that for you. All you need to do is send me the details.

Please note that I did not charge BF for the post nor will I charge Spectrum, so what appears to be bothering you shouldn't.

James

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Please don't get me wrong, I'm not criticising the information given in any way. It is very informative, and I'm sure that Mary and her team will provide an equally informative seminar in Carcassonne on the 5th. If there is any residual confusion, clients can always go for a second opinion with the 'Le Tour de Finance/Spectrum IFA Group' seminar at the Gayda restaurant in Brugairolles eactly one week later. I wonder if I'm allowed to advertise that as I didn't pay for it? Seriously though, I do think going to both seminars is a good idea. What bothers me most is the fact that SFN will now apparently accept payment to deliver these adverts, thereby watering down the real content and purpose of the site.

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Rob

I posted that because I thought it would be of value to members. The seminars are free to attend (I will be attending the Biarrtz one) and I was not paid for the post. If you don't like what I send to your email address you should unsubscribe.

Thanks

James

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Personally I find that all such information is useful. (I am not a client of Blevins). Some of us are busy taking on board these new changes and I learned from this post especially with regard to ISF. The French press didn't give much detail, but maybe they didn't have it either. The government seems to be thinking on the hoof. They put up ideas which we think are policy but the policy then gets changed after all the interest groups have had their say. I am not an AE but I think that the apparent new changes if passsed in their entirety will make life very difficult for AEs and there are quite a few expats in their number. I thought the idea should be to create new businesses and economic vitality. Cameron seems to be right that many French will consider going to the UK to take advantage af the easier system, but even there it's getting harder than it used to be. I have run various businesses in the UK but am now retired; I was an architect and was heavily involved in private sector housing. In 1990 my office alone did over 1000 units. Last year the UK had less than 100,000 starts, whilst the target in France this year is 500,000. No idea how they are going to finance that- it won't be off AE taxes. What with inflation, high taxation on low returns from investment it's pretty difficult to see where we are going. Most portfolios return less than 4% which will be taxed at about 36% now in France. That means the actual net return is about 2.5% which is the same as inflation so that means all we are doing is keeping still.

Is the post "Advertorial"?

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I'm sorry James but I think this post marks a departure from SFN's core activity and a sharp drop in editorial standards. I know that SFN is not a forum. In your (or actually Catherine's ) words , it is 'a social network designed to help people connect, interact, do business, network, socialise and exchange information in a mutually supportive and helpful environment'. I suppose it could be argued that 'helping people to do business' can include direct mailshot advertising, but I don't buy that. I see very little difference between this post and you selling my email address. Blevins cross your palm with silver, and you email all the members on your list advertising an event designed to increase their client base. In a sense it is unfortunate that it is Blevins. As they are in exactly the same industry as I am, I could be accused of crying wolf, but I can assure you that my response would have been the same if it had been say Screwpak Direct. I don't blame Blevins; their job is to identify financial weakness. I think you have displayed it.