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Best value MAPS of FRANCE, and keeping the children amused

Frexit !

by David Anderson

This article is for general information only. French law is a highly specialised area and you should only act or refrain from acting after receiving full professional advice on the facts of your particular case. This article is for general information and does not constitute investment advice. Always consult an IFA.

Frexit-eu-682170A lot has been written about the effect of Brexit on UK nationals who live or have holiday homes in France. The impact will start becoming clearer through 2017 but may be completely overshadowed by the French presidential result on 7th May 2017. This article expresses no political view and looks only at the possible impact on UK nationals of a National Front presidency in 2017.

The current policies of the National Front are in their manifesto which will be updated next year prior to the 2017 election. It would seem sensible for any organisation considering relocating from the UK to France to wait until after the French election.

Income Tax

  • The policy will be to increase the tax burden on higher earners and reduce it on lower earners. This may be beneficial to UK individuals retiring to France on a modest pension.
  • The taxation of dividends will be changed so that there is no tax advantage in receiving dividends over earned income. This is likely to be disadvantageous for UK retirees.

Taxe d’habitation

  • This is a form of residential property rates which will be made part of income tax. The rates will be linked to income tax bands. It is not clear whether this will be linked to global income or only income arising in France. If it is global income then this will be bad news for UK high earners with French holiday homes.

Wealth Tax

  • Wealth Tax will remain but will be fused with taxe foncier (like property rates). It is not clear whether the current exemptions from Wealth Tax for new arrivals in France will continue to apply. If France is no longer part of the EU it will be able to have higher Wealth Tax for non-French residents.

VAT 

  • There will be a higher rate of VAT on luxury items such as cars jewellery and cosmetics.

Tax Code

  • The Tax Code will be completely re written. This is worrying as the outcome is unpredictable.
  • Tax niches will be abolished. This again is unpredictable.
  • The “niche Copé” will be abolished. This gives an exemption from tax on the sale of certain shares.
  • Tax exemptions on dividends will be reviewed.
  • All treaties France has with tax paradises will be revoked. It is not clear whether this would extend to the agreements France has with Monaco and Andorra though this seems unlikely.

Customs Duties

  • These will be reintroduced and extended. The object is to protect French jobs and manufacturing from foreign competition considered to be “unfair”.

 Euro

  • France will leave the Euro and return to the Franc. The exchange will be 1€ = 1F.
  • France will serve notice to leave the EU.
  • Free movement of people will end.

Comment

For a UK resident considering an investment in France the key issue will probably not be taxation but rather a likely devaluation of the currency. Although the Euro will remain the currency for a period, if it is to be replaced, more French property will probably be put on the market by owners keen to move money out of France before the currency changeover. Expect the Swiss Franc to strengthen. It seems likely that the change back to the Franc would have to take place quickly long before France leaves the EU.

November 2016

David Anderson   Sykes Anderson Perry Limited

www.saplaw.co.uk    david.anderson@saplaw.co.uk    + 44 203 794 5959

148_Sykes_Anderson_French_Tax_Oct14

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