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I am a French citizen and have worked in the US for 13 years. I plan to return to France to work this year and retire in about 20 years. I have a US based individual retirement account called a Roth IRA, which is funded with after tax dollars. The balance grows tax free from a US tax perspective. At age 59 1/2, I can take distributions and again no taxes are due, either on my after tax contributions, which is logical, or on the capital appreciation.

My question is as follows: when I become a French resident again, will I owe annual French income taxes on the capital appreciation? I have done some research (US-France International Convention, etc) but have not found a clear answer.

Does anyone know the answer?

Thanks !!
 

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I suspect you may wind up paying taxes in France on your Roth IRA, simply because it isn't recognized as a "tax free" investment vehicle. But I could be wrong on that.

A regular IRA can be declared as a "foreign life insurance" policy - if it was set up before a set date and meets certain other requirements as to duration of the contract, etc. There's also the issue of whether or not you can exclude it from your ISF (wealth tax) calculations. Again, if it's considered a "life insurance" instrument that pays out at retirement, you might be able to exclude it from the ISF forms, but that's not at all certain.

I suspect you won't find anything about the Roth IRAs in the tax treaties. You may want to check the detailed instructions for the French income and ISF tax returns to see what you can justify.
Cheers,
Bev
 
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