If you’re thinking about transferring your UK pension to France, there are several things to consider. We ask Helen Booth, financial advisor at deVere France: How do you know if moving your UK private/workplace pension abroad is advisable?

Transferring your pension from the UK to France

Transferring a pension abroad has always been challenging and requires specialist financial advice. The answer is often down to where you live and work. If you live in France permanently and have no intention of returning to the UK, then transferring your pension might be the best thing for your finances.

Pension transfers are usually complicated

But you should be aware that rules change frequently when it comes to pensions and transferring them out of the UK. For instance, in April 2024, the UK government abolished the Lifetime Allowance (LTA) and introduced new rules that will limit tax-free lump sum payments both in lifetime and on death, and when transferring to a Qualifying Recognised Overseas Pension Scheme (QROPS).

Pension amounts over the £1,073,000 limit set by the UK Government will now be subject to tax.

Previously, all transfers to a QROPS were subject to a tax charge of 25% on the amount over the current Lifetime Allowance (e.g. £1,073,033). Some transfers to QROPS can be made free of UK tax provided certain conditions are met, irrespective of the amount transferred, but in others, you’ll have to pay 25% tax on the transfer.

You’ll usually be able to transfer-tax-free if:

• You’re a resident in the country in which you’re transferring to a QROPS.
• You’re a resident of a country in the European Economic Area (EEA), and the QROPS you’re transferring to is based in another EEA country or Gibraltar.
• The QROPS you’re transferring to is provided by your sponsoring employer.

Get professional advice

If the value of your pension is nearing the £1,073,000 limit, you really should consider talking to a financial advisor about moving your pension abroad before you incur tax liabilities. But you should know that restrictions introduced as a result of Brexit mean that a financial advisor in the UK may not be able to advise you; you need to choose the right advisor who should be both qualified and able to advise you about all the complexities of transferring your pension from the UK to France – and drawing on your pension if you do transfer it. For instance, some UK Pension holders may find they have an opportunity to mitigate the new OTA (overseas transfer allowance) charge when transferring the pension to a QROPS. Also, be aware of potential changes to UK death benefit tax charges on pending UK pensions and any possible changes that might occur after the next general election.

When transferring a pension overseas into a QROPS or SIPP (Self-invested pension plan), always ensure it is to a recognised overseas pension scheme approved by His Majesty’s government. Check here: www.gov.uk/guidance.

Make a mistake here, and you could find yourself paying out huge amounts in taxes that could have been avoided.

Contact Helen Booth at deVere France for a free, no-obligation consultation at helen.booth@devere-france.fr
deVere is one of the world’s leading independent financial advisories; deVere France provides trusted, independent financial advice to expatriates and international investors based in France: deVere-france.fr

Please note, the above is for educational purposes only and does not constitute advice. You should always contact your deVere advisor for a personal consultation.

* No liability can be accepted for any actions taken or refrained from being taken, as a result of reading the above.

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When it comes to paying tax, for UK expats in France, it can sometimes seem like a complicated process with rules for this and that. We answer some of the most common questions that UK expats ask when it comes to tax in France.

Question: I moved to France last year. I have a teacher’s pension and state pension which are taxed in the UK. Does that mean I don’t have to complete a tax form in France?

Answer: You have an obligation to complete a tax form in France now that you are resident here. For the current tax payment year you need only complete for the portion since the date you arrived. The tax forms aren’t available until April/May of each year and then the response from the tax office is due by August of each year.

You must list all of your income on the tax return and the Double Taxation Treaty between the UK and France will dictate whether it is taxable or not. In this case the UK state pension is taxable in France. Your teachers’ pension remains taxable in the UK.

The teacher’s pension must be listed on your French tax form, but you will receive a credit for tax already assumed to have been paid.

You will currently receive a tax allowance in France as well as a tax allowance in the UK.

During the time that you transfer to France and set up the administrative processes. There may be a period where your state pension continues to be taxed in the UK and this can be reclaimed using a specific form https://www.gov.uk

The downside is you can’t have this form certified until you have a tax reference number known as a ‘numero fiscal’ issued by the French tax office. Completion of the p85 form to confirm to HMRC that you have left the UK isn’t enough to get the changes made.

If you’d like to find out more or have questions about how to maximise your investments, contact Jennie for an obligation free consultation at: jennie@abc-eu.com

abc-eu.com

This communication is for informational purposes only based on our understanding of current legislation and practices which is subject to change and is not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. You should seek advice from a professional adviser before embarking on any financial planning activity. Whilst every effort has been made to ensure the information contained in this communication is correct, we are not responsible for any errors or omissions.

ABC-EU are members of Nexus Global (IFA Network). Nexus Global EU is a division of Blacktower Financial Management (Cyprus) Limited (BFMCL) and Blacktower Insurance Agents & Advisors Ltd (BIAAL). ABC-EU is an Appointed Representative of BFMCL which is licensed and regulated by the Cyprus Securities & Exchange Commission (CySEC) – Licence No. 386/20. ABC-EU is an Appointed Representative of BIAAL which is licensed and regulated by the Insurance Companies Control Service (ICCS) – Licence No. 5101

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Would you like to make more of your UK pension fund when you become an
expat in France?
If so, you might find that a SIPP (a self-invested personal pension) is something that will help you generate the best retirement income possible. This option won’t be right for everyone. It’s important to have a qualified financial advisor review your position, but you may find that a SIPP gives you the potential to make the most of your pension fund whilst you enjoy the
good life in France. We asked Jennie Poate at ABC-EU, expat finance advisors, to explain SIPPs.

Self- Invested Personal Pensions (SIPPs)

A SIPP sounds like it might be really complex, time consuming, stressful. But that’s not the case. All it means is that this is a tax efficient pension wrapper. Its aim is to give you flexibility.

That said, a SIPP can be simple or more sophisticated – which is where your financial advisor comes into the equation. Some people like to be hands on with their SIPP, but most don’t and want to leave investment decisions to the experts.

SIPP explained in plain English

A SIPP is a wrapper that goes around your pension investments. It allows you to benefit from tax breaks for example taking a tax-free lump sum of up to 25 per cent of your pension pot after the age of 55-years old. (UK rules; other countries may well tax this part differently)

Investors are also able to reclaim income tax on contributions (the annual UK allowance 2024 is £60,000). For higher rate taxpayers – the reclaim is very beneficial.

And, as well as paying personal contributions into your SIPP yourself, contributions may be paid by another person on your behalf e.g. a family member or if you are employed, your employer.

A SIPP enables investors to take control of financial decision making rather than leaving it in the hands of insurance companies and fund managers. But while SIPPs offer greater flexibility than traditional pension schemes, they often have higher charges and the time involved in research means they may be more suitable for experienced investors.

Can expats in France hold a SIPP?

If you’re a UK expat living in France, yes, you can consider a SIPP. As with other personal pensions, you do not have to live in the UK to be able to invest in a SIPP.

However, there are a few important considerations to consider if you do not live in the UK and are considering a SIPP.

As SIPPs are held in the UK, and are normally held in Sterling. This means that if you plan to draw an income from your SIPP while you live abroad you will be liable to currency fluctuations, so you may wish to factor this is into your retirement planning. For people who plan to retire abroad and not return to the UK, an international version of a SIPP can be attractive from a currency point of view and also being able to have an advisor who can manage your pension and knows the local tax rules in the country in which you live.

Conversely, if you are paying into your SIPP while you live abroad and the value of the pound falls, the amount you are actually investing will increase. SIPPs abide by UK pension rules and are affected by any changes the UK Government makes to pension rules. One example of this would be the recent changes to the Lifetime Pension Allowance where the Government has changed the rules as follows:

From the 2024/2025 tax year the lifetime allowance will end. BUT, the tax free cash you can get from your pension will be limited to £268,275, and when you die to £1073,100 in most cases. An overseas transfer allowance or OTA will also apply if you transfer your pension abroad. Therefore the attraction if moving pension funds to a QROPS has rather diminished.

It’s important to understand the local French tax rules, as well as those in the UK before making a decision about how to draw an income from a SIPP.

Finally, and perhaps crucially, many expats will speak to a financial adviser when making a decision about their retirement plans. If you are seeking advice from an adviser in the UK, remember that they may not be fully aware of all the opportunities for expats. It is important you speak to an independent financial adviser who understands both the UK and French tax rules. Certainly this is an area where getting advice and making decisions before you move can make a huge difference to potential tax in the future.

Whatever you do, it is important to do your homework as there are many different types of SIPPs each offering different investment options.

If you’d like to find out more or have questions about how to maximise your investments, contact Jennie for an obligation free consultation at: jennie@abc-eu.com

abc-eu.com

This communication is for informational purposes only based on our understanding of current legislation and practices which is subject to change and is not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. You should seek advice from a professional adviser before embarking on any financial planning activity. Whilst every effort has been made to ensure the information contained in this communication is correct, we are not responsible for any errors or omissions.

ABC-EU are members of Nexus Global (IFA Network). Nexus Global EU is a division of Blacktower Financial Management (Cyprus) Limited (BFMCL) and Blacktower Insurance Agents & Advisors Ltd (BIAAL). ABC-EU is an Appointed Representative of BFMCL which is licensed and regulated by the Cyprus Securities & Exchange Commission (CySEC) – Licence No. 386/20. ABC-EU is an Appointed Representative of BIAAL which is licensed and regulated by the Insurance Companies Control Service (ICCS) – Licence No. 5101 

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There’s always such a lot to think about when you’re moving to France – from packing boxes and making sure your favourite glasses don’t get broken when you’re loading them onto the removal lorry to getting your post redirected. Some things are easy to forget but are really important for ensuring a successful move when it comes to the financial side of things.

Sort out your UK Tax position

For instance you should always inform the UK inspector of taxes at your local HMRC tax office that you are planning to move. You don’t have to do it in person, you simply fill in a form P85 (find and download it here: www.gov.uk). Doing this enables the UK tax office to clear up any outstanding issues before you move.  For example if you are receiving UK property rental income you will also need to complete a ‘non-resident landlord declaration’. This will enable you to receive the income gross otherwise, if rented through an agency, they will be obliged to give you the net rent after tax at 20%.

Consider Savings and Income

You should consider planning a strategy for your savings and income before you move. Some UK savings products just don’t work as well as you’d like them to when it comes to French taxation. For some savings products, it may be better to consider closing or changing them before you become French tax resident.  ISAs for example are a tax free product in the UK but are subject to a number of taxes in France. Therefore if you require the cash or need income, it may be better to look at the French options available which could be more tax efficient than keeping the funds where they are. This should be done before leaving the UK tax regime and entering the French as then no taxes will be payable. Premium bonds are taxable in France so that big win, may not be so large after all.

Assess your Pension options

What about pensions? Where are they? Can you access them yet? Review options with your adviser so that your pensions are in the best place ready for your move to France. Use a qualified authorised financial adviser who understands both the UK and French tax systems so that you can make an informed choice about your pension options. Arrange for a state pension forecast which will tell you how much you will receive and when. Pension income is often tax efficient in French terms compared with investment income which has a higher rate of ‘CSG’ or social charges. However some forms of investment bonds are incredibly tax inefficient especially if they are the offshore variety and really can be a ‘square peg’ in a round hole.

Think about Income

When you’re assessing your income, don’t forget you may pay tax on it in France – reducing what you have to spend.  A good adviser will be able to provide you with an estimate of tax payable and look at ways of minimising or reducing tax. Your estate agent can usually recommend someone English speaking who is local to you for tax purposes or your financial adviser can recommend someone to help based on your needs. Getting it right first time means that you won’t have to worry going forward.

Inheritance Planning

You may need to think about inheritance planning, doing this before you move can save considerable heartache (and headache) later. You may include all of your assets (property and cash) wherever they based. The notaire handling your house purchase may only look at how the property ownership should be structured, which of course might be only part of what you have.

A good adviser will be able to review everything you have in place now and in the future (after the sale of your UK property for example). They should take into account your income needs and priorities, coupled with your inheritance wishes and come up with a plan that will help you start off on the right foot for tax purposes once you become resident in France.

I’d advise you to use a competent tax adviser to prepare your first French tax return, especially if you don’t speak fluent French. Getting it right first time means no unpleasant surprises later on and allows you time to figure out how the system works. Your tax adviser can also liaise with your financial advisor concerning the timings for moving/closing some investments which can be crucial.

The post Top Tips for Brits moving to France appeared first on The Good Life France.

You’ve worked hard to pay for your dream retirement in France, now’s the time to enjoy that relaxed way of life you’ve planned.  If however, your ties to the UK are not entirely cut, and you have a pension being paid into a bank account in the UK –  then you should consider ways to make your pension go further in France.

Each expat’s circumstances will differ in terms of what they want to do or need to do with a monthly pension. Some may well be in the fortunate position that they have deposited a bulk amount of cash in their French account and don’t need to draw on their UK pension payments on anything more than an infrequent basis. Others (perhaps the majority in reality) will be reliant on those pension payments to live on.

For the specifics of how best to manage the pension itself, the advice of a reputable, qualified adviser should fully explain such things as QROPS (Qualifying Recognised Overseas Pension Schemes) and the process and implications of transferring a UK pension.

When it comes to moving funds from a UK account into a French account many people will still make the currency transfer using their bank. But, this may not be the best available option as banks can charge a fee each time a transfer is made and may not offer the best available exchange rate from pounds to euros.

An alternative option is to speak with an authorised currency broker to see how they can save you money – it costs nothing to ask.

Why speak with a currency broker?

Currency brokers transfer your funds in much the same way as a bank, but will most likely provide a better rate of exchange combined with a more personal service. They can also offer different options and solutions to meet differing currency requirements.

For example, banks will typically only offer the ‘spot’ rate which is the rate available should you wish to carry out a currency transfer at the time of asking. Currency brokers will talk you through options such as ‘forwards’ which may suit your needs better as well as provide an improved rate of return and add some protection from market fluctuations. The ‘spot’ option may well be the best solution for an individual’s needs and going through a broker should provide more euros for your pounds due to the improved exchange rate and removal of transfer fees.

Making savings and getting a more personal service make using a foreign currency broker an attractive option, and as it doesn’t cost you anything to check, you have nothing to lose.

Most currency brokers have the ability to set you up with a regular overseas transfer plan which means you don’t need to worry about organising it each month.

If you are in the position where you’re flexible about when you receive the euros some brokers hold a higher level of authorisation as e-money institutions and can hold client funds indefinitely, which provides a better opportunity to get a more favourable rate of exchange.

Whatever your personal pension situation is, make sure you get the most from your money so you can relax and enjoy life more.

The Good Life France uses Universal Partners FX. Registration is easy, secure and is a one time set up. After that you just log on and manage your currency transfers when you want to but there’s always someone on the end of the line to talk to you when you need it.

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