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Discussion Starter · #1 ·
We are thinking about buying a property in Brittany this year and then next year selling our UK home and moving to France.

Firstly re capital gains, would we still have to pay it?
Re tax in France would we just pay tax on any interest received via the UK?

All very confusing when you do an internet search!
 

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We're in a similar position and I've been doing a bit of research. I'm not an expert though, so I stand ready to be corrected by someone who knows more! (I think some things are going to change too - eg some proposal to limit wealth tax to property.)

With regards to capital gains on the sale of your UK home then I don't think you have to pay it (in the UK) as long as it's your primary residence at the time you sell it, and it shouldn't be liable to French tax as long as you're not resident in France for tax purposes at that time. (Broadly speaking, once you move to France and are spending more than half the year there, you're considered resident for tax purposes.) Once you're resident in France, you're taxed in France rather than the UK. Interest from UK bank accounts etc is treated as income in France...

If the proceeds from the sale of your UK house are what you're going to live off, then there are tax advantages in France to getting the money into an "assurance vie" policy sooner rather than later (as the full tax benefits only come once you've had the policy for 8 years. If it's enough money to take you over the wealth tax threshold then you might want a Luxembourg "assurance vie" as there's a wealth tax exemption for the first five years for new immigrants for assets outside France.

Assurance vie is a bit like an stocks-and-shares ISA or a SIPP. You can put your money in different funds - including "fonds en euros" which have a guaranteed, but not massive, return. Compared with British investment products, the choice of investments is generally much worse (eg good luck finding a Vanguard fund) and the assurance vie fees (over and above fees charged by the funds you invest in) are higher (typically minimum of 0.6% of your investment per year). Investor protection is not as good in France either. (It's excellent in Luxembourg, but the fees tend to be higher there.)

You probably want to speak to a financial adviser who understands both the UK and French tax systems. Beware however that a lot of people who advertise themselves as this will be earning quite substantial commission on the policies they recommend - so they might not be entirely impartial.
 

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Discussion Starter · #3 ·
Sounds about right for what I have read. So as long as we are resident in UK when selling UK house no capital gains tax.

In France we would only then pay tax once a resident and then only on income, so from any interest on UK accounts.

We want to keep UK bank accounts and savings account, and will open a French bank account too.

It all gets so confusing!
 

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Once resident in France you declare total worldwide household income in France. If you have no income other than investment income then that's all you'll be taxed on, but if you also have earned income from a professional activity, or unearned income such as pensions, then that will generally be taxable in France too, with the exception of certain specified sources of unearned income which remain taxable in the UK, as per the France-UK DTA.

If your sole income will be interest from UK accounts, have you checked that this will be sufficient to qualify you for "legal" residence? Minimum income levels here https://www.service-public.fr/particuliers/vosdroits/F12017 - click on Ressources suffisantes to see the figures, currently around 800€ per month for a couple. In the past there have been no checks on this, the only issue has been that people whose resources are deemed insufficient have been refused entry to the state healthcare system and have had to take out private health insurance. But post Brexit there is a strong possibility that Brits will need some kind of right to reside document, which would mean ticking all the boxes.
 

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Another thing to think about is exchange rates. If your savings are in the UK (and thus presumably in GBP) then the value of the interest/dividends/etc that you're earning could fluctuate considerably in terms of Euros. If you look at the GBP/Euro exchange rate for the last ten years, you see it's varied quite a lot -- and dropped in the last two years from 1.4 to 1.1. Plenty of Brits in France who have income in GBP (eg because their pensions are in the UK) have really felt the impact of this.

If you're planning to stay in France then, unless you have significant ongoing expenses in the UK, I would have thought you want the majority of your "low risk" investments (eg bank savings accounts) to be in Euros too.

Obviously if you have investments in unit trusts, bonds and tracker funds then it's a bit more complicated, but those are the sorts of things you want to think about putting in an "assurance vie" wrapper to minimise the extent to which the capital gains are taxed in France.
 

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Two things to keep in mind while doing your tax planning:

1. The rules determining "tax residence" vary a little bit between the UK and France. For the UK, there is actually a "checking out" process when you go - a form you file with the tax authorities there to declare yourself no longer UK resident. For France, it may be "presumed" that you are resident in France when you spend 183 days in France during a calendar (i.e. tax) year, but technically, your tax residence is determined by where your "principal residence" is located and/or where your centers of interest lie.

2. There are big advantages to filing a French tax declaration for your first year in France, even if you are only resident there for a few months. (Plus, they do allow you to indicate that you have only moved to France as of whatever date.) The "avis d'imposition" is a very useful document for proving residence and "integration" in France - and you only get one after filing a tax declaration.
Cheers,
Bev
 

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Discussion Starter · #7 ·
So if we have savings are we better to leave them in UK and also have a savings account in France?

I know a financial advisor maybe a good idea but not sure if I trust them.
 

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So if we have savings are we better to leave them in UK and also have a savings account in France?
There is nothing to keep you from leaving savings and other financial accounts in the UK, but you will definitely need some sort of bank account in France.

The tricky part is dealing with the exchange rates and transfers. Inevitably, just when you "need" to get some money out of your UK account, the exchange rate will swing the "wrong" way. Then you need to consider the strengths and weaknesses of the various transfer companies (FX companies) - depending on how large a transfer you need to make. Relying on the respective banks to transfer money can get very expensive.

One big thing to consider is where you money is coming from, and where you're actually going to be spending it. Then, you try to avoid having to transfer between currencies any more than necessary.
Cheers,
Bev
 

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If you sell your house in the UK after you have moved to France it is not your main residence and is therefore subject to capital gains in the UK which I believe as a non uk resident is set at a higher rate.
The tax system in France is totally different to the UK so do not try and mix apples with pears However you should note that some savings accounts that are tax free in the UK eg ISAs are not treated as such in France and will be subject to tax and social charges Interest rates in France are better than the UK and many are tax free eg PEL If you have any savings vehicles other than the usual savings accounts ISAs etc then you do need to get advice from a pro
 

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Why do you want to move to Brittany ? For me that is the most important question.

All the rest can be dealt with one way or another. Why Brittany ?
 

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Discussion Starter · #11 ·
We love the area and the climate, as further south it would be too hot and also more expensive. We want to have a small holding and live a simple life.
 

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If you sell your house in the UK after you have moved to France it is not your main residence and is therefore subject to capital gains in the UK which I believe as a non uk resident is set at a higher rate.
What you say is doubtless true, but what the OP said was: "thinking about buying a property in Brittany this year and then next year selling our UK home and moving to France". As long as things are done in that order, there should be no liability to UK (or French) capital gains tax.
 

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Yes um you are correct if it is done in that order
If the OP wants to have a self sufficient life style and moving to Brittany is part of that(as we wanted) you can get some good bargains by looking round the Monts D'Arées area There are lots of fermettes with land at reasonable prices but remember it is not the centre of the action but is abot 30-40 mins to the coast
 

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We are thinking about buying a property in Brittany this year and then next year selling our UK home and moving to France.

Firstly re capital gains, would we still have to pay it?
Re tax in France would we just pay tax on any interest received via the UK?

All very confusing when you do an internet search!
If you sell UK home more than a year after moving to France it becomes a second home and liable to CGT and social charges unless you owned the house for 30 years whereby you are exempt. It's a sliding scale the longer you've owned it the less you pay. You pay tax on your worldwide income in France.
 

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What you say is doubtless true, but what the OP said was: "thinking about buying a property in Brittany this year and then next year selling our UK home and moving to France". As long as things are done in that order, there should be no liability to UK (or French) capital gains tax.
Absolutely.
 
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