Viewing posts categorised under: France

The luxury of your own local financial adviser

By Alan Watson
This article is published on: 17th March 2020

17.03.20

To say we are living in volatile times could be somewhat of an understatement. The French stock market, the CAC 40, experienced its largest ever one day fall last week, over 12% in just one trading day!

The market crash in October 1987 was severe, the dot-com boom and bust caused great misery, a global banking crisis in 2008 even caused the mighty Lehmans to fall. Why am I reciting this? Because, like most of my colleagues, I witnessed all of these events.

Covid-19 now appears to be at its most prevalent exactly where all Spectrum advisers work: Europe. The French Prime Minister has declared that all non-essential shops, offices, cinemas and restaurants should now close, and as I write this my mind wonders about the next weeks’ market activities, especially as traders and brokers will most likely decide to work from home. We have a very long climb to recover from the exceptional falls of late.

When I make initial telephone contact with a person who has requested information from our website, or maybe a personal referral, or interest from our advertising, it quite often happens that they appear surprised just how local I am, “Oh, so you’re not based in London, you live in Chambery? But that’s so close, you must be a keen skier,” and this opens up a very important conversation, mainly because the person on the other end of the phone has rarely spoken with a financial professional who has 25 years of experience in this region of France. At this stage the conversation explodes, “Where did your children go to school? Can you suggest a good one? Do you know a good company to insure my car with? How do you start to build a pension in France?” The questions are many, and I consider it my personal duty to assist, after all what is all the experience worth if you cannot help your fellow expatriates?

In the last few days such local contact has taken on a whole new meaning, “Could we meet up soon? I need to decide on my new fiscal residence, the UK tax year is so close, but due to Brexit my old UK adviser cannot help me.” Or, “I have so many UK based investments, they are all severely beaten down, but the phone lines are blocked, nobody can update me, and the annual statement is eight months away.”

And this is what Spectrum is all about; we, the advisers who live close to you, all have not only many years behind us in financial services, but equally importantly have lived, worked and paid taxes and social charges in France for many years. We know how the system works, the good and the not so good bits. We know the better accountants, the real ones who actually work for you, the client, not administrators/book keepers who collect for the system. We are supported by some of the world’s best investment houses, insurance companies and trust companies. Our knowledge is vast, and often a short car trip from your home or office. There is no cost or commitment in meeting up for an initial discussion, but the luxury of having so much available experience on your own doorstep, and in your own language, makes us a unique financial services company locally.

The concern currently is real, the media has caused Europe to panic (I just tried shopping with my wife, high stress levels everywhere). We are close, capable and can at least put your mind at rest during these testing times.

Try us, you will be amazed how quickly we respond, arrange a meeting and help to guide you through this rather bizarre period.

What to do with investments in a bear market?

By Victoria Lewis
This article is published on: 16th March 2020

What a week of political, medical and financial news! Daily market commentary from asset managers, daily messages from my daughter’s school (all students’ temperatures have been taken daily on arrival for the last 2 weeks) and my stock market app has been flashing red, green, red and more red. Let’s see what today brings.

If the stock-market decline triggered by the coronavirus outbreak and the oil price slump is like past drops, there’s both good and bad news.

After a long (largely uninterrupted) run of share price appreciation since 2009, one of the longest bull markets in history, we have now entered a bear market, broadly defined as a 20% drop from recent highs.

Goldman Sachs pointed out that this week that we have never before entered a bear market because of a viral outbreak but that it may be useful to consider the history of bear markets to get a sense of their duration and intensity. There are different types of bear markets which can be described as follows (statistics from GS who analysed bear markets going back to 1835).

Structural bear markets are those created by imbalances and financial bubbles, very often followed by a price shock like deflation. Structural bear markets, on average, experience drops of 57%.

Cyclical bear markets are typically a function of the economic cycle, marked by rising interest rates, impending recessions and falls in profits. Cyclical bear markets experience drops of 31%.

Event driven bear market refers to things like a war, oil price shock or an emerging-market crisis. On average, this type of bear market results in 29% declines. The current crisis is event driven. Monetary response by central banks should be effective but time will tell. However, this is a new territory: an environment of fear where consumers are forced, or just inclined, to stay at home.

The good news is that bear markets triggered by exogenous shocks typically regain their previous levels within 15 months.

Whatever your view is on the markets, my advice is don’t try to predict the future. A recovery is inevitable and we trust professionals to skilfully manage our clients’ funds. We sometimes respond emotionally to stock market decline and volatility, but there is usually no merit in either reacting to, or trying to forecast, short term market events.

Don’t delay your financial plans. For planning, yesterday is better than today, which is better than tomorrow. Contact me, Victoria Lewis, if you want to discuss how you should react to these events.

Being prepared for BREXIT in France

By Katriona Murray-Platon
This article is published on: 11th March 2020

On 31st January 2020, the UK left the EU. However, the real effects of Brexit, for those of us living in France, will not properly be felt until after the 31st December 2020 (what an interesting New Year’s Eve that will be!) and thereafter. Hopefully, by that time we will have a clearer idea of what our rights and responsibilities are. Until then there will still be much speculation and media noise, which may be just as confusing as it has been over the past four years.

One thing Brexit has established, from the very beginning, is that British citizens living in France, or planning to settle in France, need to get their affairs in order and decide where they would like to live for the foreseeable future. As British citizens we can always return to the UK if we so choose, but if we want to continue to live in France we must show that we have lived here continuously for the last five years or that we intend to continue living here in future.

The next few months are going to be very interesting and it is more than ever important for British citizens to consider some important financial changes.

Pensions after Brexit
In 2006, the UK introduced a law making it possible for UK private pension benefits to be transferred to a Qualifying Recognised Overseas Pension Scheme (QROPS), provided that the overseas scheme meets certain qualifying conditions.

For those pensions that can be transferred there are many benefits including:

No obligation to purchase an insurance company annuity, at any time
The potential to pass on the member’s remaining pension assets to nominated beneficiaries on death with minimal or no death duty payable. By comparison, currently a tax charge at the beneficiary’s marginal rate can be applied in the UK, where the member is over age 75 at death
A wider choice of acceptable investments offered, compared to UK pension plans
The underlying investments and income payments can be denominated in a choice of currencies, which can potentially reduce exchange rate risk
Potential to receive a larger amount of Pension Commencement Lump Sum compared to UK schemes
Depending upon the jurisdiction where the QROPS is set up, income payments may be made without the deduction of local taxes, meaning that income will only be taxed in accordance with the law of the jurisdiction where the member is resident

In 2017 the UK government announced its intention to introduce a new 25% Overseas Transfer Charge (OTC) on QROPS transfers taking place on or after 9th March 2017. This charge does not, however, apply where the QROPS is in the European Union (EU) or EEA and the member is also resident in an EU or EEA country (not necessarily the same EU or EEA country) and remains EU or EEA resident for the next five full UK tax years.

Many of those who work in the industry believe that after the transition period, it may no longer be possible for British citizens to transfer their pensions into an EU QROPS without incurring the 25% charge.

QROPS may not be suitable for everyone and much will depend upon the nature of the UK pension benefits being considered for transfer, as well as the person’s attitude to investment risk. Transferring a pension to a QROPS is not a decision that should be taken lightly nor in haste and proper financial advice with an experienced adviser is essential. Even when the decision has been made to transfer the pension it may take a good few months to complete, which is why, if you are even considering this possibility, it is important to contact a local adviser to explore what your options are.

Taxes after Brexit
As tax between the UK and France is determined by the Double Tax Treaty, this will not be affected by the fact that the UK has left the EU. However, whilst not directly taxed, a lot of UK income, such as UK rental income, is added to the taxable base and increases the tax margin of the French taxpayer. If you intend to live in France, you may want to consider whether it is really in your interest to hold onto UK assets.

It is possible to protect your capital investments in France and ensure that they can grow in a tax efficient environment by way of an Assurance Vie policy. French Assurance Vies or French approved foreign Assurance Vies offer valuable benefits when it comes to income tax, inheritance tax and estate planning. Foreign portfolios and bonds are not treated as Assurance Vies and any gain is subject to tax and social charges irrespective of whether this income is taken or whether it is brought into France. If you are French tax resident, you are taxable on your worldwide income in France. Proving that you are French tax resident will be an important factor for establishing the Right to Remain in France.

Being resident in France does not necessarily mean that all your assets have to be in France or have to be in euros. There are many opportunities for holding sterling based diversified portfolios in a tax efficient manner.
For anyone intending to live in France for the foreseeable future, be aware that today’s valuable financial planning opportunities are unlikely to remain beyond the short term (31st December 2020 could be an important date in this respect). Contact me, Katriona Murray, and I will be happy to arrange a meeting.

Do I need to declare my UK bank accounts?

By Amanda Johnson
This article is published on: 10th March 2020

10.03.20

Yes, you do. In a drive to reduce tax evasion and ensure transparency as to where money comes from, banks are now required to share details of overseas accounts, if asked by another country’s tax authorities.

All UK bank and savings accounts need to be declared on your French Tax return. You also need to declare if you have opened or closed any accounts during the last tax year.

Any interest that you have received on these accounts must also be declared. The penalties if you are found to have not declared accounts are very stiff, at up to €1500 per account.

In France, there are tax efficient savings accounts called Livret A and you can save up to €22,950 per person. The interest is not subject to French income tax or social charges and it is a perfect account for an emergency fund because you have access to this savings account without a notice period. For money that you can put aside for a longer period, it is worth getting in touch with me to discuss whether an Assurance Vie would be suitable for your needs.

Whether you want to register for our newsletter, attend one of our road shows or speak to me directly, please call or email me on the contacts below & I will be glad to help you. We do not charge for reviews, reports or recommendations we provide.

Moving to France – When should I take financial advice?

By Amanda Johnson
This article is published on: 20th February 2020

20.02.20

For the majority of those who move to a France, speaking to a qualified financial adviser, who is regulated where you plan to live, is something which happens after you have made the move. But, talking to one before you embark on the journey can help avoid some issues which expatriates can find themselves encountering:

Many UK based advisers are not fully regulated to offer advice for France and may not be aware of the most current regulations or tax efficient solutions for your needs.

A French regulated adviser can ensure you are financially prepared for your move, in terms of any investments, savings and taxes which can become due on both income and windfalls you may be expecting after your move.

Many people come to France with plans of using their new French property to run a business. A French regulated adviser can compare your anticipated return on investment to that from tax efficient, financial investments available.

For those planning on using the property as the main source of income, how you buy your property can have different benefits in terms of French tax rules.

A regulated adviser has no vested interest in which property you buy, yet has often a long history of experience of the path you are undertaking.

Investing an hour of two of your time before you make the move to France can provide peace of mind and financial comfort when planning a new adventure.

Why should I review my finances

By Amanda Johnson
This article is published on: 14th January 2020

14.01.20

Very little has changed in my life during the last 12-18 months; why should I review my finances?

When and how often you should review your financial position is a question I often get asked by people attending my financial surgeries. There are several questions which I feel are important to consider when looking at whether you are due for a financial review:

When did you last sit down and fully review your finances?
If you have not had a review for 12 months or more, you may not be aware of legislation changes or new opportunities which may be open to you.

Have your personal plans and aspirations changed since your last review?
Are you now looking at retirement closer or wish to look in more detail at inheritance planning? Perhaps you are looking at downsizing and want to make any surplus monies work efficiently for you?

How are any investments or savings you hold performing against your expectations?
When you took out an investment or savings plan, it is likely you looked at how they had performed, and this past performance made a sizable contribution to your choices. That information is now out of date and replaced by more recent information. Reviewing this new data is vital in ensuring your money is still working for you to its best ability.

Just because your last year feels standard, you should not underestimate how external factors can influence your financial security and your ability to make the best use of any money you have worked hard to earn.

Brexit – What now?

By Katriona Murray-Platon
This article is published on: 18th December 2019

Some of you, like me, might have woken up on Friday and after hearing the election result felt utterly depressed. Irrespective of how the vote could or should have gone, or who you may have voted or wanted to vote for, this result will seriously affect the Brits living in Europe. Brexit is now more likely than ever, so what does this mean for us? Well luckily, there is someone who is somewhat of an expert on the matter, Professor Sébastien Platon, Professor in European Law at the University of Bordeaux and incidentally my husband! Over breakfast I asked him a few questions.

So, what now?
The British parliament must first pass the EU (Withdrawal Agreement) Bill, and then they have to agree on the Withdrawal Agreement itself. Given that the Conservatives now have a majority it is likely to be passed. Either later or at the same time, the European Parliament also has to agree on the withdrawal agreement. If all of this gets done by the 31st January, Brexit will happen as planned. If not, the UK will have to request ANOTHER extension which would have to be agreed by the other 27 member states.

During the transition period are all European rights maintained?
Apart from the right to vote and run as a candidate in EU elections and municipal elections, the right to participate in European citizens’ initiatives and the UK’s right to vote on EU laws, all rights, including the right to free movement, are maintained during the transition period.

Does a British citizen who has not yet settled in France still have the right to do so after 31st January?
Yes. Up until 31st December 2020 all British citizens can come and settle in the EU. After the transition period, those who have established residency in the EU and wish to bring their family members (spouses, partners, direct descendants under 21 or dependent, direct relatives in the ascending line) to live with them can still do so.

Can the transition period be extended?
Yes, if the UK and EU agree to extend the transition period. But, unlike the Brexit extensions, they cannot ask for an extension the night before the 31st December 2020. A decision has to be made before 1st July 2020 extending the transition period for up to 1 OR 2 years. British citizens would therefore have until the end of the transition period (or extended period) to settle in the EU.

What about healthcare?
During the transition period, the EU social security coordination rules will continue to apply. The British who reside in France (or any other member state) and are in the UK health system but not the French health system can continue to benefit from this health cover as normal. After the end of the transition period, these rules will continue to apply to:

• UK nationals subject to the legislation of a Member State at the end of the transition period,
• UK nationals who reside in a Member State while being subject to the legislation of the UK at the end of the transition period,
• UK nationals who pursue an activity as an employed or self-employed person in one or more Member States at the end of the transition period and who are subject to the legislation of the UK,
• Their family members and survivors
These persons will be covered as long as they continue, without interruption, to be in one of these situations involving both a Member State and the UK at the same time.

What about pensions?
For the persons I’ve just mentioned, the time worked in the UK will count towards an EU pension and inversely any time spent working in France would contribute towards entitlement for a UK pension should they wish to return to the UK when they retire.

Do we need to apply for cartes de séjour?
During the transition period you do not need them. After the transition period each member state has the right to require UK citizens to apply for a new residence status, the sole purpose of which is to verify whether the applicants meet the conditions set in the withdrawal agreement. If they do, they have a right to be granted the residence status and the document evidencing that status (which will NOT be a “carte de séjour”). The French administration cannot refuse this status if you meet the conditions. The deadline for submitting the application shall not be less than 6 months from the end of the transition period. The host State has to ensure that any administrative procedures for applications are “smooth, transparent and simple, and that any unnecessary burden are avoided” with applications being “short, simple, user friendly and adapted to the context of” the agreement. Only once the agreement has been ratified will we know if and how the French Government wants to proceed on the matter.

Whilst I do not agree with Brexit and wish things had happened differently, at least after four years of uncertainty there may now be some progress. The pound bounced back up on Friday and this election result is likely to have a positive impact on the markets and portfolios.

Le Tour de Finance – Autumn 2019

By Spectrum IFA
This article is published on: 5th December 2019

The latest event in the autumn leg of Le Tour De Finance, which was held on the 21st November at the magnificent Domaine du Seudre – 17240, was yet again a successful day with a broad range of subjects discussed by the international panel of financial experts.

Attendees, who were a mixture of existing clients of The Spectrum IFA Group and those wanting to hear more about the services and financial solutions available, had travelled both locally and from other regions nearby.

Brief introductory presentations were given by representatives from The Spectrum IFA Group, Prudential International, Tilney Asset Management and Currencies Direct. Discussion and an extensive Question and Answer segment then covered subjects including the recently introduced tax changes to Assurance Vie (the most tax efficient savings and investment vehicle available in France), the suitability of transferring UK pensions to HMRC recognised EU schemes, investment market performance and outlook, wills and estate planning and sterling to euro exchange rate direction (and the facilities available to help mitigate against exchange rate volatility).

Unsurprisingly, the ‘B’ word featured widely and although many answers are yet to be determined, attendees were left reassured that The Spectrum IFA Group and its partners were well informed on both the technical detail of Brexit and the practical implications for anyone living or working in France or indeed those thinking about making a permanent move to France.

Portability of financial products, such as Assurance Vie, for an expatriate returning to the UK, was another area of interest in the question and answer session and guests were provided with example scenarios regarding the flexibility that such investments offer.

The key message that came out of this event was the importance and benefit, even for the financially experienced, of seeking professional, independent advice. The audience was reminded, in these uncertain times, that it is critical to ensure that all aspects of our personal finances are properly structured, for both legitimacy within the French fiscal system and for maximum tax efficiency ahead of any potential changes in the months and years ahead.

Questions and discussions continued during an informal lunch, during which guests and speakers alike found no shortage of topical subjects for conversation. The day was wrapped up with our special guest speaker, Rusty Firmin, former SAS Special Forces training instructor and team leader at the 1980 Iranian embassy siege. Rusty spoke to our guests after lunch with a compelling first hand account of his experiences.

Feedback from the event has been very positive. One guest commented “I enjoyed the day thoroughly and found it both thought provoking and educational. The opportunity of being able to engage directly with the representative of those international companies was a valuable bonus.”

We are planning to hold further seminars in 2020 and will provide details on the Le Tour de Finance website. See www.ltdf.eu for further information.

Professional Women’s Network – Cote d’Azur

By Lorraine Chekir
This article is published on: 25th October 2019

25.10.19

How Can We Make The Most From Our Money

PWN Nice Cote d’Azur is pleased to invite you to the event organised
with our partner EDHEC Business School:

Wednesday, November 6th

18.30 – 20.00 EDHEC Business School Campus, Nice.

Lorraine Chekir is the Treasurer for the Nice branch of the PWN and an International Financial Advisor with The Spectrum IFA Group, for the English speaking community on the Cote d’Azur and Var region. She helps and advises people on how to plan their investments and retirement planning tax efficiently based on their individual circumstances.

Lorraine will introduce the event and give a short introduction on the basics of financial planning. This will give you the basic tools on how to plan your finances in the most efficient, cost effective way to help grow your money for both your immediate, medium and longer term future.

Lorraine will introduce her two guest presenters, Holly Merriman and Harriette Collings who will cover the topics of:

Women Investing – why you should and how it can benefit you
The Investment Gap – what is it, how does it affect you and what can you do about it
The Pension Gap – Why does it exist, what changes you can make to Close your gap
Macro Economics – which will give an overview of the behavior and performance of the economy as whole and how this affects you and society as a whole

Everyone will have the opportunity to ask questions at the end of the presentations or a more private chat over a drink at the end.

This event is 15€ for PWN Members, 35€ for non-members, and Free to all EDHEC students. EDHEC students, please email Carmen at membership@pwnnice.net for your discount code.

We look forward to seeing you and learning with you on the 6th of November.

Holly Merriman
Tilney Group

Harriette Collings
Tilney Group

Lorraine Chekir
The Spectrum IFA Group

Understanding the Taxe Foncière

By Katriona Murray-Platon
This article is published on: 19th October 2019

19.10.19

As the last quarter of the year approaches, there is one thing that is certain and that is that taxes are due. In September the final instalment of the income tax must be paid, in October the Taxe Foncière is due and in November the Taxe d’Habitation must be paid.

Taxe Foncière is a tax paid by property owners on the 1st January of each tax year. Note that it is paid by the owner not the occupant and applies to both buildings (houses or apartments) and land (agricultural or constructible).

If you sell your property or land, the tax liability for that year is apportioned to each party, by the notary, according to the timing of the sale.

You may qualify for an exemption if:

- the property is a new construction used as a main residence (the exemption is for 2 years)
- you are in receipt of disability allowance
- you are in receipt of old age allowance
- you are over 75 (depending on level of income)

The tax office may also allow an exemption for unoccupied property which is habitable and normally rented, provided that:

- it is unintentionally unoccupied
- it is unoccupied for at least 3 months
- part or all of the building is unoccupied

However, as the tax reduction is not automatically granted, you have to apply for it and demonstrate that you qualify (with reference to the specific points above).

Taxe Foncière is based on rental value according to the land registry multiplied by a rate set by the local authorities – so rates differ depending on where the property is situated and from one year to the next.

Any building on your property that is a permanent fixture could result in an increase of your Taxe Foncière. If you install a swimming pool (sunk or semi-sunk) then this could increase your Taxe Foncière. You have 90 days to declare to the tax offices that you have installed a swimming pool but you could also be exempt from paying the Taxe Foncière for the first 2 years.

The tax office sometimes makes mistakes when calculating Taxe Foncière liabilities, in which case you should contact your local office to ask for an explanation and rebate. You have until the 31st December 2019 to challenge your 2018 calculation. Additionally, the tax office sometimes doesn’t apply exemptions for which you qualify.

You can contact the tax office via your online account on the impots.gouv.fr website or by email or letter sent by recorded post.

Paying your taxe foncière monthly spreads the costs throughout the year. You have to settle in full by the middle of October, so if you do pay monthly and the amount hasn’t changed this year, you will have nothing to pay in November and December.