Maximising Your Pension Income As A UK Expat In France
Maximising your pension income as a UK expat in France is key to enjoying a comfortable retirement. This article outlines the main areas to consider.
Retiring To France
With almost half of the British expats in France retired, pensions are the main component of their long-term retirement income. Navigating the various options available to you and ensuring the product and investments suit your aims and objectives can be complex.
UK tax and pension regulations change regularly, affecting UK expat retirees in France. Foreign tax systems can be complex and even more so if you don't speak the language. It’s essential to stay updated on reforms in both countries to ensure your retirement plan remains effective and to make well-informed decisions.
French Tax Planning
Under the UK/France double taxation treaty, UK pension income received by French residents is taxed in France, not in the UK. The exception to this is government service pensions.
Since UK pension providers deduct tax at source, you will need to arrange for them to pay your pension income gross to avoid double taxation. To do this, you must prove that you are a tax resident in France and paying taxes here. This can be achieved by obtaining a Nil Rate NT code.
HMRC will then notify your pension provider to stop withholding UK tax, paying your income gross moving forward, and refund any tax already deducted at source during the process.
The above applies to all UK pensions including International SIPPs. If you hold a QROPS Qualifying Recognised Overseas Pension Scheme, due to the double tax treaty between Malta and France, pension withdrawals will be paid gross. You will then need to declare the income on your annual tax return. The tax rate falls in line with French income tax bands.
Retirement Income Strategies
Consider multiple income streams: UK state pensions, private pensions, investments, and rental income can help diversify and stabilise your retirement finances.
Investment options: France offers several tax-efficient investment vehicles, including Life Insurance (Assurance Vie) policies, which provide tax advantages for both retirement income and estate planning.
Retirement Planning Advice
Retirement planning in France requires a good understanding of the country's tax system, pension entitlements, healthcare, and financial strategies for ensuring a comfortable retirement.
Selecting the best pension and investments for your position needs careful consideration. Receiving advice from a locally regulated cross-border specialist can ensure your investments are allocated per your risks and objectives.
The Wealth Genesis helps clients throughout France with their financial planning needs. This includes the transfer and management of pensions, Assurance Vie selection and investment allocation, and maximising your pension income in retirement.
FAQs
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An International SIPP (Self Invested Personal Pension) is a UK pension for expats. More information on International SIPP's can be found here.
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No. Unless your pension provider has told you that you need to close or transfer your pension there is no requirement to do so.
It is however worth considering whether the existing arrangement is best suited to your needs. -
Yes, The Wealth Genesis has advisers in France to assist. Simply schedule an initial free online consultation using the diary below.
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You could but it would not make sense to do so. Firstly, anything can happen and if you don't move you will have your pension in the wrong product and incurred unnecessary fees.
Secondly, for the initial transfer you will receive financial advice from a UK FCA-regulated adviser.
However, they would not be able to advise you upon relocating to France and you would need to change. As such, you would lose the continuity of having an overall investment strategy implemented and perhaps need to change products again.
