Assurance Vie in English | British Expats in France
LEARNING OBJECTIVES
We’re passionate about providing free, high quality and up-to-date information to Expats in France.
IN THIS ARTICLE, YOU WILL LEARN THE FOLLOWING:
How the Assurance Vie works in France
Which English options are available
What to look out for when choosing a provider
Best practise for Expats
Tax-efficient investing in France is a common question for British Expats.
Compared to the UK, France has a more punishing tax-system, with less allowances and reliefs available to investors.
One such investment vehicle available is the Assurance Vie, which literally translates to 'Life Assurance'.
What is an Assurance Vie?
An Assurance Vie in France is an investment account with a life assured attached, which comes with specific tax benefits to the investor. This type of account is built to fit within the local system and comply with tax laws and regulations.
The tax benefits include:
Compounding growth year on year free of capital gains tax within the account.
Tax free withdrawals of 4,600 EUR per annum per policy holder, providing the account has been live for 8 years.
Reduced tax on growth after 8 years (7.5% investment tax + 17.2% social tax)
Inheritance and Wealth tax benefits
Investing with a French Bank
The main French banks, such as BNP Paribas, Societe Generale and Credit Agricole all offer these investment accounts. However, in doing business with your local bank you will be tied to their products and investments, which are typically very expensive and come with commission payments to the agent at your branch. These local AV accounts usually cost around 2% per annum in fund and adviser fees, and can have initial commission payments as large as 5%.
All of these fees and costs have to be recovered before the investor can realise any growth.
Not only this, but the contract will be entirely in the French language. Whilst this may not be a problem for bilingual Expats, it can be stressful setting up an account and investing your life savings into a contract that isn't fully understood.
Is there an English Assurance Vie?
Expats in France will be glad to hear that there are English financial planning options available in their native language. There are a variety of investment providers available that offer English Assurance Vie accounts, such as:
One Life, who operate out of Luxembourg
Prudential International who operate out of France
Utmost International who operate out of Ireland
Unlike the local options provided by Banks, the above providers allow for whole of market investment options, allowing you to access low cost funds from managers such as Vanguard, Fundsmith, Fidelity etc.
The benefits of using an English contract include peace of mind, clarity on cost as well as a full understanding of the small print.
How Much Does an Assurance Vie Cost?
This depends entirely on the provider and the financial adviser you decide to work with. There are 2 sets of costs to consider:
Product Costs - this can be between 0.30%-2% per annum depending on the size of the investment
Financial Adviser Fees - this can be up to 5% initial fee, and up to 1.5% per annum
We currently would recommend the Utmost Assurance Vie (Apex France) for our clients resident in France. This option is fully regulated in Europe, and is the lowest cost when set up under the correct charging structure.
To learn more about this account, read our unbiased and comprehensive review of the Utmost Assurance Vie here.
How Does The Wealth Genesis Work?
We are the first Expat Financial Adviser to charge all clients the same flat-fee, regardless of circumstances, wealth or complexity. Our flat wealth planning fee includes a deep-dive of your personal situation, and the implementation of a bespoke plan to align your finances with your long-term objectives.
To discover more about how we work with our clients, see Why Us?
Taking Regulated Expat Financial Advice
Expat investment advice is a specialist area, and requires a deep understanding of all the options available.
If you are not a professional investor, we would strongly encourage Expats to engage with an independent financial adviser to put together a bespoke investment strategy, as well as identify the most appropriate investment product.
Prior to engaging with any firm, we advise all individuals to do the following:
Check the regulations and permissions of the firm you choose to work with, and make sure you can find them on the website of an EU regulatory body
Ask for the qualifications of the adviser you are speaking with, as well as their industry experience. Outside of the UK, there are no requirements for an adviser to have passed certain exams to provide investment advice, which has led to many unqualified individuals providing advice.
Confirm and understand the charging structure involved. Ask if the adviser is being paid to sell a product to you, and if they are receiving any 'kickbacks' or hidden commission payments.
Make sure your money is 100% accessible and available to withdraw. If you see exit penalties or lock-ins in any proposal, this is a certain sign that commissions are being paid out of your savings.
Investing in France | Our Verdict
The French system is complicated, and it's easy to fall foul of tax-laws and reporting requirements. Whilst an Assurance Vie is a very attractive option for most Expats, other areas may be more important, such as retirement planning, estate management or financial protection.
To understand how we can help you, complete our online form below to schedule an initial consultation with a member of our team.
Get Started with The Wealth Genesis
