UK Pensions Reform Overview
By David Odonoghue
This article is published on: 31st December 2014
This year brings about major changes in UK pension rules. Under the reform of ‘Freedom and Choice in Pensions’, people will be provided with more choice about how and when they can take their benefits from certain types of pension arrangements.
Following proposals first made in March last year, subsequent consultation resulted in the Pensions Taxation Bill being published in August, with further amendments being made in October. Additionally, some provisions were clarified in last month’s UK Autumn Budget Statement. Therefore, subject to there not being any further changes before the eventual enactment of the legislation, we can be reasonably certain of the new rules.
To understand the reform, you need to understand the two main different types of pensions. The first is the defined benefit pension (DBP), where your employer basically promises to pay you a certain amount of pension, which is calculated by reference to your service and your earnings. DBPs are a rare breed now, as employers have found this type of arrangement too costly to maintain. This is because the liability for financing the scheme falls upon the employer (after anything that the individual is required to contribute) and if there is any shortfall in assets to meet the liabilities – perhaps because of poor investment returns – the employer must put more money into the scheme.
The second type of pension is what is known as a money purchase plan (MPP). You put money into an MPP, perhaps your employer does/did also, as well as the government in the form of tax rebates and in the past, national insurance contribution rebates. Maybe your ‘MPP’ was not through an employer at all and you just set up something directly yourself with an insurance company. They are several different types of MPP arrangements, but they all result in the same basic outcome, i.e. the amount of the pension that you get depends on the value of your ‘pension pot’ at retirement and so the investment risk rests with you. There is no promise from anyone and therefore, no certainty of what you might receive.
The proposed reform is all about the MPP, although there is nothing to stop a person from transferring their private DBP to a MPP, if they have left the service of the former employer.
The majority of the changes will be effective from 6th April 2015 and these will apply to ‘money purchase’ pension arrangements only. Therefore, people with deferred pension benefits in funded defined benefit plans, who wish to avail themselves of the changes, must first of all transfer their benefits to a money purchase scheme. Members of unfunded public sector pension schemes will not be allowed to have such a transfer.
Under the new rules, people will be able to take all of their ‘pension pot’ as a one-off lump sum or as several separate lump sum payments. For UK resident taxpayers, 25% of each amount will be paid tax-free and the balance will be subject to income tax at the marginal rate (the highest tax rate being 45%).
Alternatively, it will be possible to take 25% of the total fund as a cash payment (again, tax-free for UK residents) and then draw an income from the remaining fund (taxed at marginal rate). The commencement of income withdrawal can be deferred for as long as the person wishes. Furthermore, there will be no minimum or maximum amount imposed on the amount that can be withdrawn in any year.
The Annual Allowance, which is the amount of tax-relieved pension contributions that can be paid into a pension fund, is currently £40,000 per annum. For anyone who flexibly accesses their pension funds in one of the above ways, the Annual Allowance will be reduced to £10,000 for further amounts contributed to a money purchase arrangement.
However, the full Annual Allowance of up to £40,000 (depending upon the value of new money purchase pension savings) will be retained for further defined benefit pension savings.
The ‘small pots’ rules will still apply for pension pots valued at less than £10,000. People will be allowed to take up to three small pots from non-occupational schemes and there is no limit of the number of small pot lump sums that may be paid from occupational schemes. 25% of the pot will be tax-free for a UK resident. Accessing small pension pots will not affect the Annual Allowance applicable to other pension savings.
The required minimum pension age from which people can start to draw upon their pension funds will be set as age 55, in all circumstances (except in cases of ill-health, when it may be possible to access the funds earlier). However, this will progressively change to age 57 from 2028; subsequently, it will be set as 10 years below the State Pension Age.
The widely reported removal of the 55% ‘Death Tax’ on UK pension funds has been clarified. Thus, whether or not any retirement benefits have already been paid from the money purchase fund (including any tax-free lump sum), the following will apply from 6th April 2015:
- In the event of the pension member’s death before age 75, the remaining pension fund will pass to any nominated beneficiary and the beneficiary will not have any UK tax liability; this is whether the fund is taken as a single lump sum or accessed as income drawdown; or
- If the pension member is over age 75 at death, the beneficiary will be taxed at their marginal rate of income tax on any income drawn from the fund, or at the rate of 45% if the whole of the fund is taken as a lump sum. From April 2016, lump sum payments will be taxed at a beneficiary’s marginal tax rate.
There will be more flexibility for annuities purchased after 6th April 2015. For example it will be possible to have an annuity that decreases, which could be beneficial to bridge an income gap, perhaps before State pension benefits begin. In addition, there will no longer be a limit on the guarantee period, which is currently set at a maximum of 10 years.
French residents can take advantage of the new flexibility and providing that you are registered in the French income tax system, it is possible to claim exemption from UK tax under the terms of the Double Taxation Treaty between the UK and France. However, there are French tax implications to be considered, as follows:
- you will be liable to French income tax on the payments received, although in certain strict conditions, it may be possible for any lump sum benefits to be taxed at a fixed prélèvement rate;
- if France is responsible for the cost of your French health cover, you will also be liable for social charges (CSG & CDRS) of 7.1% on the amounts received;
- the former pension assets will become part of your estate for French inheritance purposes, as well as becoming potentially liable for wealth tax (i.e. if your net taxable assets exceed the wealth tax entry level).
Therefore, as a French resident, it is essential to seek independent financial advice from a professional who is well versed in both the UK pension rules and the French tax rules before taking any action. Such advice should also include examining whether or not a transfer of your pension benefits to a Qualifying Recognised Overseas Pension Scheme (QROPS) could be in your best interest.
Note, that for those expats who already have transferred pensions to a QROPS or are thinking of doing so? the Pension Taxation Bill makes provision for the proposed UK pension reform to follow through to such schemes.
However, a complication exisits, due to the fact that the separate UK QROPS Regulations do not necessarily allow people to fully cash in their pesion funds in all circumstances.
The Pensions Taxation Bill does already make some provision for the proposed UK pension reform to follow through to Qualifying Recognised Overseas Pension Schemes (QROPS). However, a complication exists, due to the fact that the separate UK QROPS Regulations do not necessarily allow people to fully cash in their pension funds, in all circumstances.
Therefore, before the new flexible rules could apply to QROPS, the UK Regulations must be amended and it is understood that there is on-going work in this regard. Whether this work will be completed before 5th April 2015 is not known.
However, even if the UK does amend the QROPS Regulations, it will then fall to individual QROPS jurisdictions to make the necessary changes to their own internal pension law. For the well-regulated jurisdictions, it cannot be ruled out that their own Regulators may not agree entirely with the UK’s ideas of flexibility! In effect, there could be a preference to ensure that pension funds are used only for the purpose of providing retirement income for life, with the possibility of income continuing to a member’s dependants.
In any event, the taxation outcome of someone fully cashing-in their pension fund (whether whilst still in a UK pension arrangement or if later allowed, from a QROPS) is likely to be a sufficient practical deterrent for anyone actually wanting to do this. Therefore, for someone who has left the UK, a QROPS should continue to be a viable alternative to retaining UK pension benefits, particularly since the advantages of a QROPS have not changed. However, everyone’s situation is unique and this is why seeking advice from a competent professional is essential.
Pension workshops in 2015 – Deux-Sèvres
By Amanda Johnson
This article is published on: 14th December 2014
In November 2014, I was invited by Micala Wilkins of the “Ladies in Business in France” Facebook group to present a pension workshop to those within the group who have moved to France, are working here and wanted to know more about planning for their retirements. Choosing a small venue so that I could focus on the individuals present, we covered the following areas:
- What pension am I likely to receive from the UK when I retire?
- How is the French state pension calculated?
- What income will I require when I retire?
- How can I make up any difference between what I would like to receive and what I can expect to receive?
The delegates all found the information very useful and informative, as you can see from these event testimonials:
“It was a really useful meeting, thanks for organising it – Amanda Johnson gave us some interesting information and plenty to think about:)”
“It was a great session and certainly gave lots of food for thought!”
“An informative session on how, as expats, we can find out what our UK pension entitlement is, how we can maximise our full UK pensions and the steps we can take to get as much of a French pension as possible”
Subject to sufficient interest, I will be happy to conduct more workshops covering pensions, or any other areas of financial planning that readers of The Deux–Sèvres Monthly magazine or any others may want. If you email me your name, postcode and area of interest, I will endeavour to arrange local events throughout 2015.
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 and I will be glad to help you. We do not charge for reviews, reports or recommendations we provide.
Looking forward to 2015
By Spectrum IFA
This article is published on: 9th December 2014
The end of the year is always a good time for reflection and this year we have had much to think about for our clients. However, as well as managing current financial risks for our clients, we are also forward looking. So I thought it would be a good time to do a quick review of some of the things that are on the horizon for 2015.
The UK Pensions Reform is big and we now have a reasonable amount of certainty of the changes taking place in April and it is unlikely that there will be any more changes of substance between now and then. The reform brings more flexibility, which is good, but the reality is that for many, the taxation outcome will be a deterrent against fully cashing in pension pots. This is likely to be even more so in France, where it is not just the personal tax and possible social contributions that are an issue, but also whatever you have left of the pot will then be taken into account in valuing your assets for wealth tax, as well as being potentially liable for French inheritance taxes.
The EU Succession Rules will come into effect in August. While the EU thinking behind this is good, i.e. to come up with a common EU-wide system to deal with cross-border succession, the practical effects will still have issues. The biggest issue for French residents is, of course, French inheritance taxes. Therefore, it may not necessarily be the case that the already tried and tested French ways of protecting the survivor and keeping the potential inheritance taxes low for your beneficiaries should be given up in favour of selecting the inheritance rules of your country of nationality. More information on the ‘French way’ can be found in my article at https://spectrum-ifa.com/inheritance-planning-in-france/ and on the EU Succession Regulations at https://spectrum-ifa.com/eu-succession-regulations-the-perfect-solution/
There is the UK General Election in May and who knows whether or not that will actually be followed at some point by a referendum on the UK’s membership of the EU. Nor do we know what the outcome of such a referendum would be and so there is really no point in speculating, at this stage.
For UK non-residents, we are expecting the introduction of UK capital gains tax on gains arising from UK property sales from April, subject to there not being any changes in the next budget. We had also expected that non-residents would lose their UK personal allowance entitlement for income arising in the UK, but we now know that this will not happen next year. The Autumn Statement confirmed that it is a complicated issue and if there are to be any changes in the future, these will not take place before 2017. Of course, there could be a change in government and so it might be back on the agenda sooner!
We will also have the usual round of French tax changes, although this year the expected changes are much less extensive than in previous years. The French budget is still winding its way through the parliamentary process and I will provide an update on this next month.
Turning to investment markets, my personal opinion is that the main factor that will have an impact in 2015 is central bank monetary policy. Whether this results in tighter or looser policy from one country to another, remains to be seen. What is clear is that the prospect of deflation in the Eurozone remains a real threat and not only needs to be stopped, but also needs to be turned around with the aim of eventually reaching the target of being at or just below 2%. Other central banks around the world have a similar target and in areas where recovery is clearly underway, the rate of price inflation and wage inflation also needs to increase before we are likely to see the start or interest rate movements in the right direction.
Last but not least, with effect from 1st January 2015, under the terms of the EU Directive on administrative cooperation in the field of direct taxation, there will be automatic exchange of information between the tax authorities of Member States for five categories of income and capital. These include income from employment, director’s fees, life insurance products, pensions and ownership of and income from immoveable property. The Directive also provides for a possible extension of this list to dividends, capital gains and royalties.
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 on the mitigation of taxes.
If you are affected by any of the above and would like to have a confidential discussion about your situation or any other aspect of financial planning, please contact me using the details or form below.
Financial success from your yachting career
By Peter Brooke
This article is published on: 27th November 2014

RULE: Conceptually plan out different financial pots.
This is a really good way to plan your future in yachting. There is no need to have different accounts for these “pots”, although it may help.
Pot 1 – Emergency fund – we all know how volatile the yachting industry can be in terms of job security. It is important that if you suddenly find yourself without a job you can at least survive for a few months, get yourself to one of the main yachting centres and afford accommodation while looking for work. I recommend having at least 3 months’ salary in a bank account at any time.
Pot 2 – Education – in order to progress your career it is vital to consider the costs of education. Hopefully you will be on a yacht where Continual Professional Development (CPD) is part of the culture but there will still be courses that you need to fund yourself. Start to plan when you will need the money for the next course and how much it will be… then divide the amount by the number of months until the course, and save that amount EVERY month into an account. Remember there may be additional travel or accommodation costs too.
Pot 3 – Exit – you have now saved an emergency fund and are putting money aside for the next course…. now consider what you plan to do when you leave yachting? Are you going to start a business? Return home? Retire? You should now look to save at least 25% of your income for this purpose. It is very easy to go through a yachting career and end up with very little saved for when you want to leave. There is no provision made by your boss for your long term future, it is down to you to save.
Remember if you worked on land you’d lose at least 25% to social charges and tax anyway. As these are longer term savings you can now consider making investments to try and grow your money more. Make sure as your income grows, your savings and investment amounts grow too.
Pot 4 – Property – if one of the investments that you want to make for your long term future is into property, then you need to start planning what you need to put aside every month to be able to save enough for a deposit and legal fees/taxes. In France, for example, a yacht crew will now need at least 28% of the property purchase price to be able to borrow… saving this amount takes discipline and planning.
Pot 5 – Expenditure – all of the above requires a habit of saving and bit of effort to form the best plan… the single best way to successfully save for your future is to be strict with your own expenditure. Look at all of the above and then give yourself a set amount each month that you can spend on having fun and travelling. Do this well and the more difficult disciplines above will be easy. Saying no to another night out is the hardest part!!
This article is for information only and should not be considered as advice.
Should I stay or should I go?
By Spectrum IFA
This article is published on: 25th November 2014
Quite frankly I’ve been struggling to think of what to write about this week, but then it suddenly struck me that there has been a recurring theme in a number of my client meetings recently. That theme put simply is, ‘Where will I end my days; in France, or in England?’ This isn’t a popular topic of conversation amongst vibrant, exuberant, middle aged expatriates, but we’re not the only people here. We are in the company of many seasoned expats who’ve been here longer than we have; seen it all; done it before we did, and are feeling a bit tired. Many of them are ‘going home’.
We should pay a lot of attention to this group, because we are going to inherit their shoes. We need to learn from their experiences, and take the opportunity to plan for the time when we will experience what they are going through.
Five years ago, when writing on a similar theme, I think I proffered the theory of the three ‘D’s as the principal reason to return to the UK: death, divorce and debt. I still think that they are valid causes, but I now think that there are many subtle variations to be taken into account, and the biggest addition to the equation is age. Age changes your perceptions; often for the better, but age often also brings insecurity and loneliness. Add to that illness, and maybe bereavement, and you have a powerful reason to examine your reasons to continue to live hundreds of miles away from a family that (hopefully) continually worries about you. In short, no matter how much we pooh-pooh the idea now, the chances are that we may eventually end up being cared for in our final years in the UK rather than in France.
OK, that’s enough tugging at the heartstrings. Why is a financial adviser (yours truly) concerned about where you live, and where you may live in future? The answer is currency, specifically Sterling and Euro. In a previous existence, I was responsible for giving advice to corporate and personal clients of a major High St bank regarding exposure to foreign exchange risk. The basic advice was simple – identify and eliminate F/X risk wherever you can. F/X risk is for foreign exchange dealers; it is gambling. Don’t do it unless you know what you’re doing, and even if you do, prepare to lose money.
On a basic level, eliminating exchange rate risk is easy. Faced with a couple in their 50’s relocating to France with a healthy investment pot behind them and good pensions to support them in the future, I will always ask ‘Where do you intend to spend the rest of your days?’ The answer is usually an enthusiastic ‘France, of course. We have no intention of going back to the UK. In fact wild horses wouldn’t drag us back.’ I know this for a fact – I’ve said it myself.
The foreign exchange solution is simple. Eliminate your risk. Convert your investment funds to Euro (invest in a Euro assurance vie). Convert your pension funds to Euro (QROPS your pension and invest in Euro). Job done! Client happy, for now! But what happens 25 years later, when god knows what economic and political shenanigans have transpired, and the exchange rate is now three Euro to the pound and the surviving spouse wants to ‘go home’?
As it happens, I will no longer be his or her financial adviser. The chances are that I will have popped my clogs years ago, but If not, I will most likely be supping half a pint of mild in a warm corner of a pub somewhere in the cheapest part of the UK to live in. (In fact that is poetic licence, as I know full well that I’d probably be being spoiled rotten in my granddad flat in one of my sons’ houses). To draw this melancholy tale to a close, I’d just like to round up by saying that things are rarely as simple and straightforward as they seem. My job is not always to take what you tell me at face value. I know people who’ve been here longer than you. My advice may well be ‘hedge your bets, spread your risk’. I will give you the best possible investment tools for your money and pensions, but I might just surprise you with my recommendation as to what currency those funds should be invested in.
What New Year’s Resolution can I make for 2015?
By Amanda Johnson
This article is published on: 18th November 2014
As 2014 draws to an end and we look forward to spending the festive period with family and friends, there is one New Year’s resolution that you can make which will benefit both you and your family and that is to make sure that you review your finances in 2015.
2014 has seen the UK Government make changes to pensions, the French Government levy Social Charges on areas not previously charged and a joint agreement on Wills which is due to come into effect during 2015. On top of this, there is constant media concentration on whether the UK is better off in or out of the EU. Bearing all of this in mind, it is worth taking advantage of a free financial review to ensure your savings, investments & pensions are working for you in the most tax-efficient manner and that they match your goals and aspirations for the future.
A free financial review will include the following areas:
- Investments – to ensure they are as tax efficient as possible
- Inheritance tax – to minimise the amount of inheritance tax imposed and increase your say in where you money goes after you die.
- Pension planning – putting you in better control of planning for your future
Whether it has been a while since you last looked at your finances or you are unaware of how changes both in the UK & France could affect you, a decision to take a free financial review could be one of the best New Year’s resolutions you can make.
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 and I will be glad to help you. We do not charge for reviews, reports or any recommendations we provide.
Have a Merry Christmas and a very Happy New Year.
EU SUCCESSION REGULATIONS – the perfect solution?
By Spectrum IFA
This article is published on: 10th November 2014

The EU Succession Regulations (also known as Brussels IV) were adopted on 4th July 2012. The UK, Ireland and Denmark opted out of the Brussels IV, but residents of these countries are still affected, particularly if they have cross-border succession interests.
The default position is that the law of “habitual residence at the time of death” will apply to the succession of the entire estate of persons who die on or after 17th August 2015. However, a person may choose the law of the country of his “nationality” to apply by specifying this in a will. If the person has more than one nationality, he can choose whichever he wishes.
Therefore, except for residents of the UK, Ireland and Denmark, a foreigner (not necessarily an EU national) living in any of the other 25 EU States can elect the country of his nationality to apply to the succession of his estate. Interim measures are already in place to make such a ‘nationality election’ now in a will, but it will not be effective until 17th August 2015.
There is considerable misunderstanding about the Regulations and whilst it is true that people will be able to choose the succession rules of their country of nationality this will not change the inheritance tax rules that apply. Therefore, if at the time of your death you are French resident or you own property in France, even if you have chosen the succession rules of another country, it is still the French inheritance tax rates that will apply. This means that the amount of French inheritance tax that your beneficiaries will have to pay will depend upon their relationship to you.
Unfortunately, I am finding that people who are purchasing property now and are planning to live in France may not be seeking adequate inheritance planning solutions. They believe that they can rely on the EU Succession Regulations to protect the survivor, but sadly they are not aware of the potential inheritance tax issues that can exist.
For example, the most common scenario that we come across is one that involves there being children from a previous marriage. Currently, unless the couple buy the property ‘en tontine’ or the children enter into a family pact with their natural parent, the surviving step-parent will not have full control over the property. The EU Succession Rules achieve the same effect as these techniques, if the couple elect for the succession rules of their country of nationality to apply and that country does not have any concept of children being ‘protected heirs’.
A perfect solution? Maybe, if the only objective is to protect the surviving step-parent, but if the step-parent wishes to leave the property to the step-children, then there will still be a 60% inheritance tax bill, so perhaps not quite the perfect solution!
Actually, I have greater concern about some expatriates who are resident in France now, who are already making new French wills, choosing the law of nationality to apply to their succession. This may be fine if there is a ‘stable family relationship’ and the couple only have children of their marriage, particularly as it is likely to cost less in legal fees than the alternative of changing their marriage regime to one of “Communauté Universelle avec une clause d’attribution intégrale de la communauté au conjoint survivant”, which would achieve the same effect.
However, many people have already undertaken inheritance planning (and paid for this), which has achieved the objective of protecting the survivor and mitigating the potential inheritance tax bills of their heirs, as far as possible. Depending on the situation (value of estates, stable family relationship or not), it is highly likely that the planning already undertaken will be better for the majority of cases and making a new will now might turn out to be a costly mistake for the potential beneficiaries.
Like all aspects of financial planning, every case should be looked at on its own merits and what seems clear is that there will be some cases where the ‘French way’ may still be best. For example, take my own situation where as a British citizen who is in a French civil partnership (PACS) with someone who has dual US and British citizenship, as well as him having two daughters and two grandchildren living outside of the EU, we will not be rushing ahead to request that English succession rules apply to our estates. Instead, we will definitely continue to depend upon our French family pact and assurance vie because in that way, we know that when the time comes, the survivor will be fully protected and the potential inheritance tax bills of our heirs have been mitigated.
Hence, as can be seen, tried and tested solutions already exist for dealing with property, plus assurance vie will continue to be an effective succession planning tool for financial assets. You can find out more about the ‘French way’ by reading my article on ‘Inheritance Planning in France’ on our website at https://spectrum-ifa.com/inheritance-planning-in-france/ or by contacting me directly for a copy.
Brussels IV aims to harmonise the approach to succession across the EU with the intention that the civil rules of only one jurisdiction apply to the succession of a person’s estate, i.e. habitual residence or nationality. However, due to the opt-out of the three Member States, this has already created uncertainty. In addition, it is not clear how the Regulations will work at a practical level, in particular, how the courts in one country will administer the succession of both moveable and immoveable assets in another country. Hence, even some international legal experts are not yet drafting transitional provisions into wills that involved a cross-border succession, as there is still too much uncertainty. We can only hope that there is further clarification before August 2015.
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 on the mitigation of taxes.
The Spectrum IFA Group sponsors What Larks English Theatre Group
By Victoria Lewis
This article is published on: 3rd November 2014

Victoria Lewis and The Spectrum IFA Group are proud to be sponsoring the local English theatre group What Larks for their upcoming productions of ‘Barbara’s Wedding’ and ‘A Well Remembered Voice’.
The double bill of two beautiful J M Barrie short plays has been chosen to commemorate the centenary of the beginning of the 1st World War.
The events are taking place on:
- Sunday 30th November –BEDOIN, 84410
- Tuesday 2nd December – BONNIEUX, 84480
- Sunday 7th December – AIX-EN-PROVENCE, 13100
Barbara’s Wedding:
The Colonel is in his dotage, and as his memory fades, past and present become intertwined.
He is visited by his beloved grandson and the young man’s fiancée, Barbara.
But are they really there? And who is it exactly that Barbara is marrying?
A Well-Remembered Voice:
A couple have lost their son in the trenches. The young man’s mother tries to speak to him through a séance, while his father simply reminisces, by himself. And yet in the process it is Mr Don, and not his wife, who is finally able to talk to their son, in a way he never could when the boy was alive.
Tickets are available from www.whatlarks.org
Tax efficient saving in France with Livret A & Assurance Vie
By Amanda Johnson
This article is published on: 17th October 2014
When I was a UK resident I was able to take advantage of tax free savings schemes. Are there French products that will allow me to save, tax free, now I live in France?
There are two main tax efficient saving products you can take advantage of as a French resident, Livret A & Assurance Vie.
Livret A is a deposit based account which all banks and the post office offer. It gives you instant access however this is balanced by a modest rate of interest of around 1% p.a. There is also a maximum amount of 22,950 Euros per person you can hold within a Livret A.
An Assurance Vie is an investment which again all banks and financial institutions here in France offer.
I have written about this before yet I think a reminder of the important aspects of the mechanism of “assurance vie” is probably in order here:
- An Assurance Vie (“AV”) is a type of insurance however unlike a life insurance policy you may have experienced in the UK, these policies shield any investments from virtually all forms of tax while the funds remain inside the AV. (some funds receive dividend income that has had withholding tax deducted).
- AV’s become more tax efficient over time. After 8 years funds can be withdrawn from the AV and taxed at just 7.5% on the gain element only. Funds can be accessed at any time before that, with the gain declared on your annual tax return. Standard social tax remains payable on all gain, but only when drawn.
- After eight years your gain is not only tax efficient, but it can be offset against a tax free allowance of (currently) €4,600 per person (€9,200 per couple) per annum. I would be happy to run through this with you as part of a free financial health check.
- AV policies are not subject to succession law. Proceeds from an AV policy can be shared amongst any number of beneficiaries. Although the succession tax benefit is reduced when the subscribers are aged over 70, there are still worthwhile benefits to be gained in this area.
What should I ask for in an Assurance Vie?
- Portability – Can I take it with me if I move back to England or to another country?
- Regulation – Is the company advising me on an Assurance Vie regulated in France?
- Fees – No up front entrance fees apart from the money I use to establish the policy?
- Social Charges – If & how are Social Charges applied to my AV ?
- Currency – Can I invest in Sterling? Euros?
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.