Recent financial updates affecting expats in France
By Spectrum IFA
This article is published on: 15th September 2015
There are lots of things happening at the moment in the financial world that affect us as expats living in France. So this month, I am providing a summary of various topics.
Social Charges
This has to be one of the hottest topics around the expat dinner table, at the moment! It all started with the European Court of Justice (ECJ) ruling in February that France should not apply social charges on ‘income from capital’ for French residents who are insured under the social security scheme of another EU/EEA State. For those who want more on the detail of the ECJ ruling, this can be found in my previous article on this subject at https://spectrum-ifa.com/french-social-charges-on-worldwide-investment-income/.
However, despite the fact that the ECJ had made its decision, we still had to wait for France to accept the ruling. Happily, this came through on 27th July 2015, from the Conseil d’Etat, which is France’s highest court. This means that people affected by the ruling can now claim back social charges paid in 2013 and 2014, on investment income and gains. The claim should be made by 31st December 2015, otherwise you will lose the right to get back those paid in 2013.
As concerns social charges due for 2015, the good news is that I have already seen evidence from some clients’ tax bills that the social charges have not been applied. On the other hand, we all know that one tax office can do something completely different than another and so some of you may find that you have a bill for social charges! If so and you don’t think that you are liable, you should contact your tax office to dispute the bill.
The main group of people who will benefit from the ECJ ruling is those who hold a Certificate S1 for their health cover. Beyond this, those working in another EU/EEA State, but living in France will also benefit. However, a grey area concerns early retirees, who do not have a Certificate S1 and instead have private medical cover because the text of the ECJ judgement actually refers to being insured by another State’s social security system. So we will have to wait for the next round of Social Security legislation, which will be debated during the final quarter of this year, to see how they will be affected.
French Tax Changes
The debate on the draft finance bill for 2016 is scheduled to commence on 13th October.
As documents are published, we will carry out our own analysis. So keep an eye on the French pages on our own website at https://spectrum-ifa.com/financial-advisor-france/ for information. Alternatively, you can contact me directly for information.
EU Succession Regulations
These Regulations have now been in effect since 17th August 2015 and more information can be found in my previous articles at:
https://spectrum-ifa.com/the-eu-succession-regulations/
https://spectrum-ifa.com/eu-succession-regulations-the-perfect-solution/
So if you have not made a French will, as a French resident, the default position is that the succession rules of France will apply to your entire worldwide estate. In effect, this should include any UK property that you own, but since the UK has opted out of the Regulations, it is unlikely that an English court will easily accept a French court deciding that the UK property should pass to the ‘protected heirs’, instead of to the surviving spouse, if that is what you specified in a UK will! So we cannot be clear about what will happen in practice.
There are lots of other complicated situations that may arise and at the very least people should take the opportunity to revisit wills and succession planning. If you would like to have a confidential discussion about your situation, please contact me.
Pensions
The major reform in UK pensions that has taken place this year has generated lots of enquiries from people who are looking to cash-in their pension pots. Many people are not aware of the severe tax implications of doing this and thankfully, we are often able to find alternative solutions for them to meet their objectives.
We all wish to have a financially secure retirement and careful planning is an essential part of achieving this objective. At Spectrum, we can provide you with the necessary advice to reach your goal.
Investment Markets & Interest Rates
Volatility has been felt in investment markets over the last month, mainly as a result of actions taken in China relating to interest rates and currency devaluation. What has also been demonstrated is the fact that the global recovery is still fragile. This has caused central bankers to rethink interest rate policy and anticipated increases in US and UK interest rates may be pushed further back.
At Spectrum, we have a range of solutions to suit all levels of attitude to investment risk and if you would like to have a review of your financial situation, please contact me.
Client Seminars
All of the above subjects are being covered at our Autumn Seminars taking place across France – “Le Tour de Finance – Bringing Experts to Expats”. The date for the local seminar is Friday, 9th October 2015 at the Domaine Gayda, 11300 Brugairolles and there are a limited number of places remaining. If you would like to come to the event, please contact me as soon as possible to make your reservation.
If you are further away, we have other events are taking place earlier during that week at:
- Endreol (Provence) on 7th October
- Aix-en-Provence on 8th October
- Avrillé 49240 (Loire) on 11th November
- Dinard, Ille-et-Vilain, (Brittany) on 12th November (the 100th Le Tour de Finance event)
If you are not able to come to one of our seminars, but you would anyway like to have a confidential discussion about any aspect of financial planning, please contact me either by e-mail at daphne.foulkes@spectrum-ifa.com or by telephone on 04 68 20 30 17.
The above outline is provided for information purposes only and does not constitute advice or a recommendation from The Spectrum IFA Group to take any particular action on the subject of investment of financial assets or the mitigation of taxes.
The Spectrum IFA Group advisers do not charge any fees directly to clients for their time or for advice given, as can be seen from our Client Charter at The Spectrum IFA Group Client Charter