Hello all I've joined today

(David Wren) #1

I’ve joined today. I’m considering early retirement options - here to meet some likeminded people and maybe close out some assumptions I’ve made about France.

So that I can plan I’m looking for “sticky” threads on typical budget considerations both in terms of regular spend and one off or regular taxation.

I am 49 my wife 52 (shhh…) we will be looking at relocation buying a property with a mix of funds from UK house sale and other cash savings. We have SIPP pensions which we plan to draw down from 55 - so need to be clear on tax implications for either one off draw down or incremental draw down.

Conscious of healthcare costs - would like more info on this and what might change if we become accepted as residents into the French state healthcare.

Planning steps or milestones which need to be passed through to transition from UK to France.

Also I am not considering a move because I hate UK more because I love France and have finite resources :slight_smile:

This site was recommended by an estate agent.

regards
D

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(stella wood) #2

Hello David and welcome to the Forum…

The topics vary tremendously, so take you time to wander around the Site…

Any particular queries… just post them here and someone is bound to chime in… :relaxed:

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(David Wren) #3

Hi Stella - I have just amended my intro narrative to provide a little more background to my circumstances.

regards
D

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(Jane Jones) #4

And hello to you to…

Can’t give you any guidance on specific budgets except to say that overall your annual budget for living expenses will probably match what you might expect in U.K. Some things cheaper, others more expensive but overall the kind of lifestyle you plan to have will cost around the same as a similar lifestyle in UK. The unknown will of course be the £:€ exchange rate if your income will be generated in £££s. Property is much cheaper, but building and renovations costs higher.

Taxes are generally higher. Basic income tax is 0% up to 9,900€, then 14% to 27,000€ and 30% thereafter. Plus you have to pay social charges of around 16%. And then an extra 8% for being in the health service. There is also the equivalent of council tax that varies according to location (taxe fonciere), and a sort of poll tax (taxe d’habitation) that is changing but may still apply to you.

To get into the health service (and most likely to be able to get residence post Brexit) you need to have a stable income of at least 830€ a month for a couple under 65. Which also gives you an idea of what the french consider to be the minimum income for staying alive. Personally I think that would provide not much more than that, but depends on your aspirations.

There’s no road tax, MOTs are every two years and car insurance is often lower. As against that everything else to do with a car seems to cost more.

Those are the basics that I can think of, but verthimg depends very much on what you are seeking to achieve.

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(Graham Lees) #5

Hi David and welcome to the site.
Just to add that some of these costs vary according to the region/department you are considering your move to.
Some areas are considerately more expensive than others by all accounts so take your time and consider well.
The best advice (unless you are already committed of course) is to rent in an area you consider appropriate to get the feel for it, moving on if you find it’s not to your liking.

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(Paul Flinders) #6

I only vaguely looked into this so forgive me if I’m talking rot but aren’t families taxed as a unit - so two people with one income are likely to be better off than in the UK, tax-wise?

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(Jane Jones) #7

Yes and no…yes generally you are taxed together as the foyer fiscal, but no it’s not better as in the UK you each have a personal tax free allowance of £11,500, i.e. £23,000 for a couple. In France the couple gets 9,900€ tax free (although not sure what happens if you choose to be taxed separately).

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(David Wren) #8

this is where I am confused. For the first few years we would be living off of savings we will therefore have no income for around 4 years. So I assume the French authoristies would consider this as part of any future residency application and ask for a Health Insurance contribution?

After that time we would pay ourselves, lets say, Eur 33k from a SIPP. My understanding is that our tax is as a family rather than individual in France. So 2x 9.9kEur the remainder of which is taxable. If I were being taxed at this point as if the drawdown were income and paying social and health components is it fair to assume that I would be entitled to State care or would the authorites ask for an additional contribution to qualify?

I haven’t done any detailed planning yet but the French taxation seems at face value better for us than if we moved to Spain given French incomes and taxes are more northern European in terms of their size. I could even consider a one off draining of my SIPP at 55 and pay 15% tax or so, perhaps less depending what you read.

(David Wren) #9

As my wifes SIPP will be exhausted before mine the ability to use her tax allowance is better for us. I wouldn’t be able to do exactly the same thing in UK.

(stella wood) #10

David… check out this link… I reckon all your queries have been raised and answered somewhere in the forum… and this link is a good place to start…

https://www.survivefrance.com/c/banks-money/tax-and-social-charges

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(Paul Flinders) #11

It’s only effectively £23000 if both are earning - while it is possible to transfer some of your personal allowance it is only 10% and only if the person you are transferring to is only a basic rate tax payer.

This has come up before - basically the French authorities consider that savings generate income at a modest rate of interest (2% was mentioned) so you need rather a lot of savings to meet the minimum income requirements for “inactifs”.

(Jane Jones) #12

Not sure I quite understand “consider this part of future residency application”…

As I understand it the french authorities have a standard calculation that determines the amount of capital that would be considered to provide enough income to meet the threshold for residency, and equally for acceptance into the health service. So presumably they also have a way of assessing the payments (cotisations) required for the health service but I don’t know what that is, and I’ve not seen that on previous posts in the category that Stella has pointed to. An issue to research!

You currently can apply for entry to health service after three months living here in a stable and regular fashion. And in theory at least should have private health insurance until you are accepted into the french health service, which can be quite expensive.

(Paul Flinders) #13

Not quite.

Total household income is divided by the number of individuals (1st two children count as a half each), so if there is only one income it is divided into two before being compared with the 9,900€ threshold - thus effectively making it an 19,800€ threshold for a couple with a single income.

(Jane Jones) #14

It never occurs to me that there are couples where only one person earns! I basically thought no one can afford to do that now…

But yes you are right there is the bizarre “parts” system, so apologies for the red herring. We rarely pay more than 100€ in tax so it doesn’t come up for us. It’s the social charges that hurt.

(Paul Flinders) #15

Yes, I’d agree with you there.

How common single income families are in France I don’t know but the tax system does make it more plausible than, say, in the UK.

I suspect that there is still the notion that the woman stays at home, does the cooking and looks after the kids.

(stella wood) #16

Hi Everyone… Jane makes an important point.

When I have accompanied newcomers to CPAM to apply/discuss Carte Vitale/Health Care… it has been made very clear that a private Health Insurance Policy has to be in place for each New Arrival … even if folk are hoping to be taken-on by the French System at some point.

Things may have changed… but I think the basic idea is that no-one should arrive here and expect France to pick up the tab should they fall ill before they are eligible for inclusion in the State System. :zipper_mouth_face:

(David Wren) #17

my UK financial advisor says he cant advise on foreign tax systems. Who do most people engage with to formalise a French tax/ fiscal position with. Is there a specific professional body or shall I just ask my UK FA to recommend someone who can advise me? Clearly I don’t want to buy a house and start making a new life for us if I am judged to be behind any French tests for fiscal sustainability.

(stella wood) #18

David… have you actually trawled through this Forum… 'cos there’s loads of info there …:thinking:

When you come to France, unless you are leaving your “pot of gold” under the bed… it will be earning interest (somewhere) … which will be classed as Income, need to be Declared and will be subject to Tax and Social Charges… all of which will give you a Fiscal identity here in France… yippee…

and if your Income is below the Tax Threshold… you will be refunded certain Social Charges you may have paid… yippee

(Paul Flinders) #19

I confess that I can’t even begin to get my head around the social charges and how they work. Fortunately I don’t have to although if the worst predictions regarding Brexit turn out to be correct moving to France might be an option I start to reconsider.

(David Wren) #20

I’m working on it :slight_smile: I rarely give any thought to immigrants into the UK and how difficult it is to de-risk or even for them to know if the right level of information has been gathered.

At the end of the day I always take professional advice where the risk of costly oversight is present.

These kind of forums are a great source of info though given many have already trodden the same path.