Here we are already at the end of the year. 2023 has been a year of highs and lows, not for me personally or professionally, but in the markets. If you look at any of the main markets or indexes you can see that 2023 has been a challenging year for investors. Of course there are still several weeks left in December so it is too early to say how the year will end.

At the end of November the UK chancellor presented the autumn statement. Whilst much of this does not affect those of us in France, Mr Hunt did confirm that the triple lock would be maintained and the pension payment would increase by 8.5% in April 2024. If you are entitled to the new State pension you will get £221.20 a week from April. Those pensioners who qualified for their pensions before April 2016 will also see an increase from £156.20 currently to £169.50 per week. Unlike in the UK the tax bands in France have been increased for 2024 so this means that, subject to the exchange rate, pensioners in France will get more income but pay less taxes next year.

The Bank of England decided in November that it would not increase interest rates and would maintain it at 5.25%. Whilst this is unlikely to change in the medium term, with inflation falling to 4.7% in October, it has been no surprise to me to read in the UK press that many banks are dropping the high interest rate accounts that have been on offer over this past year.

Please remember that most companies and business owners have to pay CFE by 15th December. As the CFE is a local tax and the other local taxes like the taxe d’habiation and taxe foncière increased this year, it should come as no surprise if you find that your CFE has also increased.

As we head towards the end of the year there may still be some things you might want to consider doing to alleviate your tax burden next year. Tis the season for giving so if you haven’t already been making charitable donations monthly during the year or you want to make one off donations at this time of the year, you can deduct between 66% to 75% of the amount donated, depending on the status of the chosen charity, and up to 20% of your annual taxable income. Also, if you have a PER and are in a position to make a contribution to it before the end of the year, this is also deductible from your taxable income.

There was good news for those invested in the Pru as, at the quarterly review of the Expected Growth Rates on 27th November, there was no changes to the EGRs and no Unit Price Adjustments. This was welcome news since there had been three consecutive downward Unit Price Adjustments in the PruFund Growth Sterling fund in previous quarters.

Looking forward, I always like to remain positive and hopeful however I have learnt that it is also important to manage expectations. One of our product provides reminded me that there will be many countries heading to the polls in 2024 and that this is likely to cause turbulence and volatility in the markets.

The OECD predicts that “In the absence of further large shocks to food and energy prices, projected headline inflation is expected to return to levels consistent with central bank targets in most major economies by the end of 2025.” It further stated that whilst “Global growth is projected to be 2.9% in 2023, and weaken to 2.7% in 2024. As inflation abates further and real incomes strengthen, the world economy is projected to grow by 3% in 2025”. Of course, whilst these are based on careful analysis and good information, they are just predictions and as we have seen things often turn out better than most analysts ever predicted.

No matter what happens my job is to be there for my clients, to advise them on their investments and provide them with the proper information to help them make the right financial decisions so please do get in touch if you would like to arrange a phone call, video call or face to face meeting.

I shall be celebrating Christmas here in France and then New Years in the UK. There are still plenty of dates available for meetings before the end of the year but if I don’t speak to you before then I wish you all a very happy holiday season and all the best for the new year!

November is here, the temperatures have dropped and it is cold and rainy outside. So here is some good financial news to warm you up!

Since the 1st January 2023, Taxe d’habitation no longer applies to the main residence. Now it is only those with a second home who have to pay taxe d’habitation on their second property. The tax statements should be on your online account on the impots.gouv.fr website in November. You have until 15th December to pay this tax.

In France, one out of ten houses are considered to be second homes by the tax office. These properties are mainly to be found on the coast (40%) or in the mountains (16%) with the remainder being mainly in the larger towns and cities (12%). These properties are usually smaller than the main home with a quarter of them being less than 40 m².

Contrary to what some newspapers would have you believe, any taxes on second homes largely affect French owners and not foreigners, since only one out of ten second homes are owned by a person living outside France. Among those owned by French residents, two out of three properties are owned by people over 60. This figure increases to three out of four along the coast. 34% of properties are owned by higher income households. https://www.insee.fr/fr/statistiques/5416748.

Make sure that you check your Taxe Foncière statement that you received in October as there could be a mistake on it. According to the French tax office approximately 1.87 billion euros have been overpaid just in 2023 because of mistakes made by the tax office.

The draft finance law has been making its way through parliament. Article 2 of the draft finance law for 2024 has increased the tax brackets by 4.8%. The new proposed tax brackets are as follows:

If you are in receipt of a French pension through Agirc-Arrco, the additional pension (complémentaire) will increase by 4.9% in November. It increased last November by 5.12%. The French State pension will also increase by 5.2% from 1st January 2024.

If you haven’t already looked into carrying out work on your house to improve your heating or energy efficiency, now may be the time as the amount of the bonus (MaPrimeRenov) has increased on average by €4300.

The maximum amount that you can put into a LEP savings account has increased since 1st October from €7700 to €10,000. The interest rate on this amount remains at 6%. To be eligible to have a LEP, your taxable income (revenue fiscal de reference) for 2022 as stated on your tax return received in Autumn 2023 must be less than €21,393 for a single person, or €32,818 for a couple.

The 30th November is the date by which you must inform your bank if your taxable income (revenu fiscal de reference) in 2021 was less than €25,000 as a single person or €50,000 as a couple, so that they don’t automatically take the 12.8% tax from the interest on your savings in 2024. If you receive dividends, the income thresholds are higher, €50,000 for a single person and €75,000 for a couple. This is particularly important if your income is not taxable or in the 11% tax bracket. These thresholds remain the same as previous years and have not increased with inflation.

November is the month when you can see the most beautiful autumn colours around France. It is also a great time to review your finances and make plans for the year ahead. If you have any questions on the above or any other matters, please do get in touch!

September is a gorgeous month in France and this year has been no exception. For me September often goes by in a whirl – with the children back at school there are still after school activities to organise and parent-teacher meetings to attend.

However, for those who are not affected by the back to school mayhem September is a great time to enjoy the warmer weather and the beauty spots of France once the summer tourists have left.

Further to what I wrote in my last Ezine, the interest rate on the Livret A and Livret de Développement Durable et Solidaire (LDDS), which was expected to rise to 4%, shall instead remain at 3% and the French government has committed to keeping it at this rate until 2025. However, an appeal against this decision has been brought before the Conseil d’Etat. The interest rate of the Livret d’Epargne Populaire (LEP) has already dropped slightly from 6.1% to 6%.

If you realise you have forgotten to declare something on your 2022 tax return or you wish to correct an amount, you can, since the 1st August, amend your return on your online space on the impots.gouv.fr website. This service will be available until 11.59pm on 6th December. You should have already received your tax statement for the declaration you did in May and you should pay the amounts requested on this statement but if you do decide to amend your tax return, a new statement will be issued and any overdue amounts will be adjusted or repaid.

The tax authorities should already have your bank details that you provided to take any overdue tax from your account or pay any reimbursements. If this is not the case and if you have less that €300 to pay, you have to pay this by 30th September using the online service. If you have more than €300 to pay on your 2022 tax bill, these amounts will be taken on 26th September and around the 25th of October and November with the last quarter of the payment being taken out of your account on 27th December.

October is the month for the taxe foncière which is due by 16th October or 23rd October if you pay online or with your telephone or tablet. If you have already received your statement, you may have noticed an increase in the amount. The taxe foncière increased by 3.4% in 2022 but it has increased by 7.1% in 2023. This is an average and does not include any increases that the local councils may have voted. The sharp increase is due in part to the annual review of the rental value of the property which takes into account the Consumer Price Index which itself is determined by inflation.

Not everyone has to pay the taxe foncière. There are exemptions for those on pension benefits (ASPA) or disability allowance (ASI and AAH) as well as for those who were 75 and over on 1st January 2023 if your taxable income (RFR) for 2022 was less than €11,855 for one person or €18,233 for a couple. If one partner is over 75 and the other isn’t they can still be exempt. If a person is in a retirement home, their former home, provided it is not rented, is also exempt. New constructions, extensions or changes to buildings (a barn conversion for example) may be partially or totally exempt from taxe foncière for the first 2 years unless the local council has decided otherwise.

Although 2022 was a difficult year financially, this has not stopped the French from investing in Assurance Vie policies. According to the data published in the Le Particulier magazine in September (no 1208), 144.4 billion euros was invested in assurance vies in 2022, only slightly down from 2021 when 148.6 billion euros was invested. Most of this was in Euro Funds which, in spite of their steady decline over the past ten years, saw a slight increase in 2022 to 2% which is however less than the rates on the Livret A and LDDS.

In other news in September, I had the very great privilege of being invited to the GREAT event, organised by the British Embassy, in honour of the King and Queen’s visit to Bordeaux in September. Around 1500 people, French and British, were invited to this special event at the historic Place de la Bourse where we mingled with other members of the Bordeaux British community, bilingual professionals and business owners; sampled British foods, wines and sparkling wine and enjoyed music by local British artists. In addition to seeing the King and Queen, who arrived by tram to this event, Paddington Bear also made an appearance and the Fiji Rugby Team were also there and sang a beautiful song to the King as he was leaving. It was a very special and enjoyable day!

I hope you all had a good summer. We spent ten days in Andernos and then enjoyed a much cooler ten days visiting family in the UK. Whilst I was in the UK I saw an advert in the paper for a bank savings account offering around 5% interest on amounts up to £50,000.

However, I noticed that in order to benefit from this rate you would have to commit to leaving the money there for two full years otherwise if you took the money out you would only get around 2% interest. A quick scan of the finance section of the paper showed similar offers. Now, leaving aside the fact that once you are French resident you can’t open a UK bank account, with inflation in July being 6.8% in the UK these rates are still far below inflation. IF you were to have one of these accounts and be a French resident you would need to reduce the interest rate by 30% because that is the French tax that you would have to pay on any gains. Also there is exchange rate risk that needs to be considered.

Some other accounts were brought to my attention in Jersey. However there is no double tax treaty between France and Jersey so any interest earned would be taxable in both countries.

I always advise people to take advantage of the French tax free savings accounts like the LDDS and the Livret A and the LEP if you meet the income threshold BEFORE investing. If you add the CEL account to this list it effectively means you can hold around €50,000 readily available cash earning tax free interest. These rates are reviewed quarterly on 1st of February, May, August and November. You will be pleased to hear that there have been no changes to these rates as at 1st August 2023.

One of the key points about investments is diversification. Not only are the investments we recommend very diversified in terms of geographic location and asset class but if you have invested with us this is usually only a part of your assets.

All investments whether it is your house, your bank accounts, or your other investments, involve some level of risk. You only have to look at the history of the rates on the savings accounts HERE or the current concerns about house prices and mortgage rates in the UK, to see that nothing is guaranteed in the long term. But what we can show you from the past performance of the investments we offer is that over the past three or five years they have performed well. And the longer the investment term, the greater the likelihood of strong, positive returns ahead of the rate of inflation.

Another thing we managed to do at the end of July was to complete our wills and make stipulations about the guardianship of our children. I wrote about guardianship HERE but I admit I never got round to doing anything about it until now. The husband of a French financial adviser that I recently met is the Notaire in an office in our neighbourhood so we were able to make an appointment with him. We hand wrote our wills before the notaire, signed and dated them and then handed them in with a cheque for them to be registered. It was all very easy and I’m glad that it is now sorted.

By now you should have been able to view your tax statements in your online tax account, if you have any questions about the figures please do let me know.

After a long and much needed break, I am excited to be back at work and arrange appointments with my clients and those who have contacted me. If you want to speak to me about something please do let me know.

Looking forward to speaking or hearing from you soon!

Tax season is drawing to a close. However this year there is still something you need to make sure you have done before you can get out there and enjoy the summer weather.

You may still need to do the property declaration that I mentioned in my February edition. The declaration service has been available for several months now and so enough time has passed to be able to address some of the issues that have arisen.

Just as a reminder, if you own a property, and therefore pay taxe foncière, you have to declare the buildings on the land you own if they existed on 1st January. Because the Taxe d’habitation has been scrapped for main residences the French authorities want to find out which buildings are occupied and rented (even if just for holidays) which will allow them to more accurately establish the taxe d’habitation on second homes this autumn.

You must declare anyone who is occupying a property which belongs to you, even if it is a family member living there for free. However if you are only renting a room in your house, you do not need to declare this separately.

If the ownership of the property is divided between the bare owners (nu proprietaries) and the beneficiaries (usufruitiers) it is the latter who should declare the property on their online tax account.

You may have noticed that any outhouses, sheds and garages also appear on the declaration. If these have been converted to be rented or are simply let as parking spaces, they still need to be declared. A garage that is less than 1km from the main house is considered as adjacent to the property and therefore may be included in the surface area calculation for the taxe d’habitation.

The declaration can only be done online. If you do not have access to the internet (or know someone who doesn’t) or if you or they are really having problems completing this form online, you can call the tax office on the number below or make an appointment with your local tax office and they can assist you. Some post offices also have someone there who can help you with administrative matters.

If you have any problems with the declaration you can call the tax office on 0809 401401 or use the messenger service and the drop down menu to select the problem.

If you have an elderly resident who has gone into a home but has kept their former home and it is rented, they still need to declare it. There is an exemption from taxe d’habitation for residents of retirement homes (Ehpads).

If you rent a property you have to declare what kind of rental it is (long term or holiday let) and the identity of your tenants but you don’t need to declare the actual rent received just yet, this will only become mandatory in 2025.

You have until the end of June to complete this declaration so do take your time to make sure that the information is correct.

As always if you have any questions on this or any other matters please do get in touch!

The tax season is fully underway and whilst those who are declaring for the first time by paper have until 22nd May to complete their returns and most other people in most departments have until early June to complete their tax return, many people want to get it done as soon as possible.

Now that all the forms are available (which can be downloaded here) we can have a clearer idea of how to declare.

If you have employed someone to do your tax return, the chances are you have already sent off all your information. However if you want to have a go at doing your own tax return, here are my top tips for this year!

Tips for your taxes

Everything is declarable, not everything will be taxable!

1. Get all your information together. If you are using your SATR from the UK, make sure you decide which number you are using (April 22 or April 23) and stick to that method for UK based income. If you suddenly change and start taking the figures from your bank account then you will be double taxed on the first four months of the year. Collect all your statements, payslips, tax certificates together in the one place and note down the figures for all your sources of income and the exchange rate at the date of payment (or the annual average).
2. You need to declare all your income on the main tax form (called the 2042), you will also need to put any foreign sourced income on the 2047 and you will need to declare all your non-French bank accounts on the 3916. If you are doing the return for the first time on paper you will need a paper copy of all these forms. You will also need the 2042 C form as that is where you will find boxes 8SH and 8SI that you must tick if you have an S1 so that social charges aren’t charged on your pensions and that the reduced rate of social charges of 7.5% as opposed to 17.2% are charged on any investment income.
3. Healthcare: If you are declaring online you need to tick box 8SH and 8SI to inform the French authorities that you are covered for your healthcare by another system of the EU (including the UK).
4. Bank accounts and assurance vies: If you are declaring online you need to tick box 8TT (for assurance vies) and 8UU (for bank accounts) in order to create the 3916 form which needs to be completed with the details of these accounts. If you are declaring on the paper form, these boxes are at the bottom of the main 2042 form. If you are declaring an assurance vie you will need to have the value (in euros) of the account as at 1st January 2022.
5. Foreign sourced income must go on the 2047 form (the pink one). Most foreign pensions and salaries go in section 1 of this form but UK salaries, UK rental income, UK Government pensions, which are all declared in France but given a tax credit equivalent to the tax that would have been paid in France all have to go into Section 6 of this form in order to get the tax credit (box 8TK on the 2042 form).
6. Don’t forget any charitable donations that you made in 2022. French based charities send you a tax certificate, so you can use this to enter the correct amount.
7. Don’t forget the kids! The tax credit for child care costs for children under 6 (born after 1st January 2016) have increased from €2300 to €3500 per child and you get 50% of this amount. This is for expenses for a nanny (nounou), nursery, after school care and holiday club. If however your child is now over 6 but you still have someone to collect them from school, this is counted as a home help tax credit (see below).
8. Tax credits for home help. If you have a gardener or cleaner or have had some other home help in 2022, and you haven’t already received the tax credit automatically, you can declare these amounts on the 2042 RICI form here You are allowed at tax credit of 50% of any expenses up to a maximum of €12,000.

Not everything has to be 100% accurate. If you get close to the deadline, just submit your tax return as it is, you can amend the tax return, without penalties, through the correction service which will open at the beginning of August.

If you have any questions please let me know by email but if you would rather speak to me about something, please do give me a call.

March is always a busy month for me and this month is already looking to be the same thing. Whilst all is quiet on the tax front, for now, I am enjoying the calm before the tax storm to do client reviews and meet new people.

One of the questions that came up this month was to do with wills and power of attorney. I have already written about wills in previous articles and whilst I do not undertake to help people write their will many people find it helpful to have a conversation with me before speaking to a notaire just to fully understand the implications for expats in France. So if you haven’t written a will and have any questions please do get in touch.

When you have assets in the UK and in France it is important to have a UK will and a French will and these should refer to and not repeal or revoke each other. Equally, if you have money paid into a UK account, over which you would need someone to have power of attorney, it is a good idea to have a UK power of attorney for your UK accounts and a French power of attorney for French accounts. Whilst a UK power of attorney is, under The Hague Convention, valid in France, and a French power of attorney is, if properly drafted, legalised and translated, valid in the UK, it would be easier for those close to you, whom you have appointed as your attorney, to have a registered power of attorney in France and in the UK. This will avoid lengthy administration and translation costs. It is best to consult a notaire to make sure that your French power of attorney is properly drafted and will, come the day, be accepted by French banks.

Hopefully you have already had a look at your tax page and declared your property, if not you have until 1st July 2023 to do this. Just to add to the information in last month’s Ezine, if you rent a property you will have to declare the amount of rent. This information will be used to calculate the rental value of the properties in your area and therefore the Taxe Foncière. However you don’t have to declare the rent just yet, you have until July 30 June 2025 until this becomes mandatory.

The Taxe d’habitation has officially been scrapped for main residences in 2023. However in order to find out which properties may still be subject to taxe d’habitation (second homes, rentals etc) and the tax on vacant lodgings, the French tax authorities are requiring all those who own their own homes, second homes or rental properties to do a new declaration before 1st July 2023.

I’m so glad that February is here. After a long and cold January it’s so nice to see the bright sunshine and the mimosa flowers in my garden. That said January wasn’t too bad since I was able to get away for a lovely week in Gleneagles in Scotland for the Spectrum conference. It was a fun week of meeting with product providers, celebrating 20 years of Spectrum, highland games, walks in the Scottish countryside, and horse riding. If you thought the 2022 was a difficult year in the markets you were right. When I spoke to our product providers at our conference they told me that 2022 was one of the most difficult years they had ever experienced. Not only were equities down but the bond markets suffered too. No one can say what may happen in the future, but we can always hope, and already there are signs of improvement in 2023.

The Taxe d’habitation has officially been scrapped for main residences in 2023. However in order to find out which properties may still be subject to taxe d’habitation (second homes, rentals etc) and the tax on vacant lodgings, the French tax authorities are requiring all those who own their own homes, second homes or rental properties to do a new declaration before 1st July 2023. This includes properties held jointly, usufruitiers and properties within an SCI. This service is available on your online tax account from 1st January 2023 and the declaration has to be completed by 30th June 2023.

I had a go at doing this declaration on our own tax account and it is really quite easy to do. If you log into your account on the French tax website (impots.gouv.fr) , at the top there is a tab at the top with “Biens Immobilier”, you click on that and it will show all the properties you own, this will include any garages or out houses on your property. There should be a blue alert bubble saying how many declarations you have to do. You click on that and you will see exactly which declarations need to be done. Then you click on the option to declare your property. It will list the named occupants of the property, if nothing has changed then click on “aucun changement” (no changes) and then “valider” (approve) then it’s all done! The whole process took about 5 minutes, much less than the actual income tax return! In our case they listed our house and garage separately so I had two separate declarations to do for these. My husband is also a “nu proprietaire” of his mother’s house following the death of his father some 20 years ago. This house was listed but all we could do was consult the declaration, we didn’t need to do this declaration as his mother is the occupant of this property.

This declaration has to be done and there could be a fine of €150 per building for not declaring or for any mistakes or omissions on the declaration. If you have any questions you can contact the tax office via the messenger service by choosing the option “j’ai une question sur le service Biens Immobiliers” (I have a question on the property service).

The tax brackets have been officially increased by 5.4%. I wrote about the new tax brackets in my November Ezine but I will publish them again when we get closer to tax season. There is good news for parents with young children who go to a nanny or nursery, the amount of expenses allowed for the tax credit has finally been increased from €2300 to €3500 per child (making the total tax credit €1750 per child) and this will apply to your childcare expenses in 2022.

Further good news is that the savings accounts the Livret A and the LDDS, which did have a 2% interest rate have now been increased to 3%. The LEP now will have an interest rate of 6.1%. However bear in mind that the maximum deposit into the Livret A is €22950 and 3% of this is €689. The LDDS maximum balance is €12,000 at 3% this equals €360. Presuming you meet the income threshold, you can only put a maximum of €7700 which at a rate of €6.1% would earn you €470. So on €42650 of capital put into these savings account, you would earn €1519 fee from tax and social charges or 3.56%. Furthermore these amounts are paid yearly not monthly or quarterly so you will only receive these amounts on 1st January of next year.

Finally if you didn’t do any renovations or improvements to the energetic efficiency of your home in 2022 you can still do so in 2023, irrespective of your level of income. The renovation bonus or MaPrimeRenov’ has been extended until 31st December 2023 and the amount of financial assistance available has also been increased. To find out what you can do according to your income levels and what financial assistance you can receive, this document is useful: https://www.ecologie.gouv.fr/sites/default/files/19164_maPrimeRenov_DP_Janvier%202021.pdf It unfortunately dates from January 2021 so needs to be updated with the new amounts but it is still useful to give you a rough idea.

If you have any questions on any of the above or any other financial matters please do get in touch.