Wednesday, 16 October 2019

New French residence portal for Britons in case of no-deal Brexit

The French government has launched an online portal to make it easier for UK nationals to secure residence if there’s a no-deal Brexit.

This new resource enables Britons living in France to start residence applications online instead of through their local préfecture. It also means UK nationals settled in France for five or more years can apply for the carte de séjour while still an EU citizen, helping streamline the process in the event of a no-deal Brexit. Confirming that applications will only be processed if and when a no-deal Brexit takes place, the French government has stressed that there is no need to rush.

If there is no deal on 31 October, UK nationals living in France will have six months – up to 30 April 2020 – to apply for a residence permit. There would be another six months before these permits become mandatory for UK adults from 31 October 2020.

During the transition period, UK nationals will retain the legal right to remain and access resident benefits, but would need to exchange their residence permit or carte de séjour for the latest residence card by the October deadline. If there is a deal, the transition period is set to end on 31 December 2020.

Website in English

Thursday, 19 September 2019

Is time running out for tax-free pension transfers?

If you have chosen to retire in Europe, take steps now to review your pension options before Brexit potentially changes the rules.

With still no certainty on the timing and form of Brexit – be it hard, soft, no-deal or even no Brexit at all – it is difficult for expatriates to plan accordingly. We are often asked, for instance, what will happen to UK pension rules for expatriates after Brexit, but the reality is that no-one, not even the UK government, knows for sure. However, when it comes to rules for expatriate pension transfers, it is likely that things may change. So if you are already retired or planning to retire abroad, take steps now to review your pension options under current rules.

Many expatriates have chosen to transfer their UK pensions to a Qualifying Recognised Overseas Pension Scheme (QROPS). Since QROPS’ introduction in 2006, over £11.4 billion was sent through 128,100 transfers up to April 2019 – £640 million in the past year alone.

Transferring to a QROPS can consolidate several UK pensions under one tax-efficient roof suited to your country of residence and unlock other benefits. Funds are sheltered from UK taxation on income and gains, and immune to future changes to pension rules. Usually, a QROPS provides greater investment diversification compared to UK pension schemes and more freedom to vary income. Many also offer multi-currency flexibility, letting you hold and draw your funds in your currency of choice. Meanwhile, as UK pension payments are usually made in sterling, the income remains sensitive to volatile exchange rates during these uncertain times. And, while most UK pensions are payable only to your spouse on death, a QROPS allows you to include other heirs in estate planning.

Currently, most expatriates in the EU can transfer to a QROPS completely tax-free, but there are two key situations in which tax is payable.

First, if your combined UK pension benefits exceed the UK's liftetime allowance – currently £1.055 million – you would face a 25% tax penalty on anything transferred over the limit, even if you are non-UK resident. Once in a QROPS, your funds would never be subject to LTA charges – or indeed any UK taxes – again.

The second taxable scenario is if you transfer to a QROPS based outside the EU/EEA (European Economic Area). In this case (unless you live in the same jurisdiction as the QROPS), the UK would apply a 25% ‘overseas tax charge’ on the whole amount transferred. Expatriates in the EU can escape this tax by transferring to a QROPS based here or in another EEA area, such as Malta. However, this may change with Brexit.

As Brexit eliminates Britain’s current EU commitments – including freedom of movement for capital – the Treasury gains more scope to recoup revenue from UK nationals abroad. Many speculate this will prompt the UK government to impose widespread penalties on pension transfers, even within the EU. The UK government has offered reassurance that expatriates will keep the right to make overseas transfers, whatever happens with Brexit – but has stopped short of making any tax promises. Last year, economic secretary to the Treasury, John Glen, confirmed that tax-free exemptions would be "dependent upon the terms of future exit agreement between the UK Government and the EU".

Without a guarantee that tax-free transfers will continue, it is sensible for anyone considering transferring to act sooner rather than later. Timing is especially important here as the administrative process for pension transfers can take several months to complete.

However, it cannot be overemphasised that transferring is not appropriate for everyone. Also, all QROPS are not the same – there are differences between providers and jurisdictions that can affect the benefits. Alternative investment structures could offer expatriates comparable benefits to QROPS in their country of residence, so take personalised, regulated advice to establish the most suitable approach for you.

Pensions are likely to play an important part in your long-term financial security, so it is crucial that you only use a fully authorised and regulated provider. An alarming number of people have lost retirement savings through pension scams or by reinvesting in failed, unregulated investments that offer no protection. Your adviser should take into account your unique circumstances, income requirements, goals and tolerance for risk – as well as the cross-border tax implications – to establish the right solution for you and your family. Even if transferring is not right for you, with so much uncertainty ahead, now is the time to review your pension arrangements so you can secure the retirement of your choice in your chosen country, whatever happens with Brexit.

Aricle provided courtesy of Blevins Franks

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; individuals should seek personalised advice.

Monday, 12 August 2019

Brexit – a reality check for UK citizens with a holiday home in France

Main points

• After Brexit, as a British citizen living in the UK you will lose your EU citizenship and free movement.
• You'll become a third country national - and you'll be treated to a new location in New Zealand, Chile, Morocco or anywhere else in the non-EU world.
• This will happen from the end of the transition period, 31 December 2020, if an exit deal is agreed.
• If the UK exits the EU with no deal, it will happen from Brexit day.

• All British citizens living in the UK and wanting to travel to the Schengen area will need to register under the ETIAS scheme - the European Travel Information and Authorization System.
• This is a new and completely new electronic system, which is expected to be in place by 2020, which permits and keeps track of which countries do not need to enter the Schengen Zone.
• Its prime function is security, but it is also designed to help manage borders and impede irregular immigration. Registration will be done online.

Those who live between the UK and France though are in a vulnerable position. You might need to do some tough thinking - and do it fast.

Many people, especially those with second homes in France, have been used to coming and going without restriction, often spending 6 months every year in France and 6 months back in the UK, being careful to ensure that they're not out of the UK for more than 183 days a year and therefore keeping their UK residence intact. If you're someone who's done this yourself, it might come as a shock to find out that you're quite possibly 'unlawfully resident' in France for several months each year even though you have the right to free movement within the EU. Why?

Because as an EU citizen, you're permitted to spend only 3 consecutive months in another EU country without exercising treaty rights and becoming legally resident. So if you arrive each year on, say, 1 March, you can stay until the end of May without formality and with just your passport. But from 1 June, if you want to continue staying legally in France you can only do so if you meet certain conditions. The bottom line is that you've 'got away with it' previously because France is the only EU27 country not to require EU citizens to report their presence after 3 months in the country - and because there are no real immigration controls at airports or Channel ports.

As a 3rd Country National, you will be able to spend 90 days in every 180 days in the Schengen area. So if you arrive at your French house on 1 March, you can stay there until the end of May. Then you must return to the UK for another 3 months before you can travel again, so you would not be able to return before September. During the 'home' period between June to September, you wouldn't be able to take any short trips to any of the other Schengen countries either, as the 90/180 day rule applies to the entire Schengen area, not just to any one country within it. So no quick Ryanair city breaks in between times.

But isn't this just a return to how things were before the UK joined the EU?

If you currently live for part of the year in France but are still resident (for fiscal and all other purposes) in the UK, you basically have some tough choices to make. And just to make things totally clear - you can apply for a Carte de Séjour ONLY if you're exercising treaty rights and are legally resident in France.

Here are your choices:

1. You can remain as a British resident and accept that your visits to France will have to be restricted to 90 days in every 180 days.


2. If you want to stay longer than 90 days at a time in France after Brexit day or end of transition, you can go through the immigration process in France. In a nutshell, this is what you'd have to do as a Third Country National:

• before you leave the UK you'd need to apply to the French Consulate in the UK for a long stay visa;
• once arrived in France, you would have 2 months to apply for a titre de séjour.
• If you're retired or otherwise inactive, you would probably apply for a card entitled 'Visitor' which doesn't allow you to work. You'd need to show evidence of 'sufficient and stable resources' - this is higher for Third Country Nationals than for EU citizens and is currently set at 1204€ per month for one person.
• For a visitor's titre de séjour note that you do NOT need to show evidence of health cover, although if after 5 years you want to apply for a carte de resident longue durée you would need to do so. The cost of a visitor's titre de séjour is currently 269€ and the card lasts for one year; it's renewable, and to renew you'd need to show the same evidence as for an initial application.

For more details, use this link to take you to the official government web page:


3. You can consider becoming legally resident in France before the end of transition on 31 December 2020 (if there is a leaving deal) or before Brexit day (if the UK leaves the EU with no deal) and therefore having your residence and other rights protected under the Withdrawal Agreement or under France's national no deal contingency plan.
But it's not just as simple as the amount of time you spend here - to be exercising your treaty rights and therefore legally resident means that you must shift your entire life to France - where you pay your tax, where you are registered for health care and all the rest.

You can't cherry pick here - residence means residence, to paraphrase a well known PM! What you'd be doing is moving everything to France: your fiscal residence, your health care, your home, the centre of your life. If you then want to travel back to the UK, you would do so as a French resident and you'd then have to look at how, as a French resident, you deal with the nuts and bolts of your life in the UK.

You'd also have to look at how your residency in France could impact on other issues, such as inheritance, which works very differently in France.

Wednesday, 3 July 2019

French Mortgage Update

Good news across the board for non-resident borrowers this month.

For the first time it is now possible to get a French mortgage without life insurance, which will greatly assist those older borrowers, or people that had ample cover already in place.

New products are coming onto the market – you can now get a 20 year product with the first 5 years on interest only, and the remaining 15 on a capital repayment basis where both ‘legs’ are fixed at the outset. Guaranteeing you security from interest rate rises over the longer term.

Lenders are increasing their LTVs, giving more options for those borrowers wanting to borrow the maximum available.

Rates are being cut – due in part to new round of quantitative easing by the ECB, at least two lenders have decreased their rates over the past two weeks.

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