Transferring Your UK Pension To France
LEARNING OBJECTIVES
We’re passionate about providing relevant, high quality and up-to-date financial information to British Expats in France
IN THIS ARTICLE, YOU WILL LEARN THE FOLLOWING:
Your pension options as a French resident
The merits of an International SIPP or QROPS
French tax on UK pensions
Best practise when taking financial advice
This article is intended for British Expats in France with UK pension pots.
For many expats moving to France, what to do with their UK pensions and other assets is a key consideration. We previously addressed ISAs and the options available here. In this guide, we will focus on retirement planning.
Transfer Pension Fund From UK To France
A UK pension plan forms an important part of your retirement in the UK, but may not be the best product choice when moving to France.
Previously, you could transfer your UK Pension scheme including a SIPP to a PERPS, Plan d'Epargne de Retraite Populaire.
This is an onshore French pension that was considered a QROPS Qualifying Recognised Overseas Pension Scheme.
Following the de-listing of these schemes by HMRC, french residents have two options.
UK Pension Transfer To France
Option 1: Transfer to a QROPS Qualifying Recognised Overseas Pension Scheme.
There are various providers available in different jurisdictions. For a French resident, a Maltese-based solution would suit best. With a Double taxation agreement DTA between Malta and France, all withdrawals will be paid gross and the income declared in France.
You are also able to invest and withdraw in euros negating any currency risk concerns.
As France is part of the European Economic Area EEA, the Overseas Transfer Charge OTC of 25% does not apply.
However, by transferring to an overseas scheme, you are removing it from UK legislation and protection. Furthermore, following the Chancellor's budget in March 2023 and the abolishment of Lifetime Allowance LTA, the main benefit of a QROPS is the mitigation of Inheritance Tax IHT.
Option 2: Transfer to an International SIPP
Offering the best of both worlds, an International SIPP is a UK pension for expats.
This offers all the benefits of a UK Pension scheme such as regulation and authorisation of the Financial Conduct Authority FCA , The Pensions Regulator and Financial Services Compensation Scheme FSCS.
At the same time, it allows you the following:
Access your pension as and when you please
Receive ongoing management of the pension funds including asset allocation
Invest and withdraw in Euros
Access a wider range of investments
French Tax On UK Pensions
We always recommend clients to speak to a tax adviser, however the basics are as follows:
French Tax on UK Pension Lump Sum
PCLS Pension Commencement Lump Sum is available from all UK pensions including international SIPP's.
Put simply, you can withdraw 25% of the total value of your pension without tax held back at source. Importantly, you must pay tax on this income in France.
Under the Prelevement Forfaitaire, a fixed rate of tax of 7.5% and 9.1% social charges is applied. Via an NT code, it's possible to withdraw your full UK pension gross of UK tax, and pay the one-off Prelevement Forfaitaire in France.
Though this can look like an attractive option, taking money today from your future pension provisions, can result in significant income shortfalls in later retirement. We strongly recommend discussing your requirements with a regulated Independent Financial Adviser.
French Tax on UK Pension Income
More commonly is to have your pension income taxed at your marginal rate.
In France, the rate for 2024, applicable to your 2023 income is:
0% up to €11,294
11% from €11,295 to €28,797
30% from €28,798 to €78,570
41% from €78,571 to €177,106
45% for more than €177,106
The marginal tax rate (TMI) is the tax rate that applies to the highest slice of your income taken in a tax year.
Note there are other considerations such as if you're single, married, have children etc. You can find further information here.
Transfer UK Private Pension To France
There are two main options for transferring your UK Pension Scheme upon relocating to France.
An International SIPP is the most appropriate for the majority of expats. It meets the retirement and tax planning needs of French residents by retaining UK regulations and enabling ongoing wealth management. As such, it helps with long-term financial security and provides for you into your retirement.
Expat Financial Advice
The Wealth Genesis is a specialist expat financial advice firm. We have extensive knowledge in assisting French residents with their UK Pensions.
After our initial Discovery meeting, we then prepare a bespoke report, tailored to your individual requirements and risk tolerance.
From UK Pension transfer and management to locally compliant and tax efficient solutions such as an Assurance Vie, we offer a service specific to your needs.
We are the first expat financial adviser to charge a flat-fee, regardless of the size of your pension.
To get started, use the button below to schedule an initial consultation with a member of our advice team.
FAQs
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We would currently recommend the Novia Global SIPP for most of our clients.
It’s the lowest cost SIPP on the market and is fully regulated by the Financial Conduct Authority. -
At The Wealth Genesis, our fees are simple.
£3000 initially and 0.85% ongoing (plus product provider costs.)So, for a pension valued at £385,000, the initial fee equates to 0.78%.
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Yes, you can.
As stated above, a Maltese solution will be the most suitable product. There are numerous providers available. Once we know your exact requirements we can recommend accordingly.Note for transfers to overseas schemes, greater due diligence will be required from your existing scheme.
This will include a call with Money Helper, the Government organisation set up to provide free and impartial advice. -
Theoretically, yes.
We must caveat by stating you should always take tax advice specific to your position.
Furthermore, the Prevelevement Fortfataire can only be applied to un-crystallised pensions. If you have already taken PCLS and entered draw-down you cannot go down this route. -
No. You can only transfer to another recognised pension scheme which an Assurance Vie is not.
An Assurance Vie is a Life Assurance investment product and not a pension scheme.
It does however offer a number of advantages for French residents.As such, taking your PCLS or encashing your pension to invest in an Assurance Vie can be a consideration.
