A British Expat's Guide to living in France
The decision to leave the security and familiarity of home is one that shouldn't be taken lightly by people considering permanent retirement in France. Although France is the UK's nearest neighbour, there are a multitude of differences that can make the move stressful. As well as the obvious language and cultural differences, expats must negotiate the minefield of fiscal management and because there are some significant differences between the two countries, managing money requires some research and careful planning.
One of the trickiest areas of financial management for expats in France involves the opening of a new bank account. A Brit arriving in France for the first time will have no credit history, and the language barrier could further complicate the process. If it's possible, it could be far simpler to open a French bank account whilst still in the UK. However, it is possible to manage with a UK bank account for a limited period of time, and the application process in France is similarly straightforward to that in the UK. You will need to provide proof of identity - preferably a passport - and a utility bill, rental agreement or any official documentation that states your address in France.
The French banking system operates direct debits in much the same way as they operate in the UK; however, they are referred to as 'prélèvement automatique'. To set up a direct debit, you will need to use the printed slips that will arrive in your cheque book. Referred to as relevé d'Identité bancaire (RIBs), they include all the relevant information required to set up a direct debit. You will be issued with a French debit card - the Carte Bleue - which operates in exactly the same way as a UK debit card does.
Transferring Your Funds and Assets from the UK to France
According to Home Office estimates, the average UK family emigrates with an average of £250,000 - funds acquired from savings, pension funds and the sale of assets. Transferring substantial funds to your new French account can be a costly process, with high street banks charging up to 4% more for the service than international currency specialists. An exchange rate can be fixed before moving to France.
Finding a Property
Many expats have plunged themselves straight into property ownership in France without sampling the local way of life first. While, in many cases, that decision has been vindicated, some people struggle with the culture, the language and the local customs. A far more prudent course of action is to rent at first; you can commit to a property purchase when you've settled into a specific region of France. The process for securing a tenancy is similar to that in the UK, and proof of income and references will usually be a minimum requirement. If you're new to France, it is a good idea to arrange accommodation before you leave the UK.
The French medical system is fundamentally different to the NHS in the UK, and every resident must ensure that they have healthcare arrangements in place. As soon as you arrive in France, you will need to fill out an E106 or S1 form and send it to the local French authority. If you were receiving your state pension or disability benefits in the UK, there is a good chance that you qualify for French healthcare paid for by the NHS. All residents will be issued with a European Health Insurance Card that allows the holder to receive healthcare funded by the state. However, such care usually only includes emergency treatments, so an element of private medical insurance may be necessary. However, registering an S1 or E106 with the local health authority in France will allow you to obtain your 'Carte Vitale'. You can then contribute to and benefit from France's state-funded healthcare system like any French national.
Taxation and Pensions
Expats permanently domiciled in France will be subject to the same taxes that apply to French nationals: income tax, registration tax, wealth tax, VAT and local taxes (which include property transaction taxes). The UK and France have a double taxation treaty in place, so nationals of either country living in the other will not be taxed more than once on the same income. Bear in mind however that the French tax year starts on January 1st and ends on December 31st and because there is no PAYE system in France, you will need to file your own tax returns by May 31st.
There are 5 income tax bands in France, and which one you sit in depends on how many people are living with you, your marital status, the number of dependants you're responsible for and the total income of your household. Any income from a UK state pension will be taxed by HMRC. However, by applying for a Qualifying Recognised Overseas Pension Scheme (QROPS), your private pension could be managed in a third-party jurisdiction such as the Isle of Man or Malta. This will ensure that you avoid UK income tax, capital gains tax, and in many cases, inheritance tax in the event of your death. This kind of transfer will also allow you to manage your pension funds in the local currency - critical to sound fiscal management. We advise you to contact a tax specialist for further information regarding your personal tax situation.
Retiring in France should be a time of great joy and discovery. The last thing you need is for your financial situation to be undermined by a lack of planning and poor fiscal strategy. By researching the French taxation, employment and healthcare systems fully, you can protect your retirement income and enjoy the golden years of life in this wonderful country.