UK tax-free income (PEPs, ISAs, TESSAs, Premium bonds)

These structures benefit from UK tax concessions but by and large are not recognised by France.

Income from them is usually declarable as for bank interest, unlike income from French tax-free accounts such as a Livret A.

Note that France does not recognise the ‘wrapper’ of an ISA. Investments within an ISA (or PEP) are treated as separate investments.

Consequently, it is actual income from the investments and any capital gains made when they are sold that are declarable and taxable (on the other hand, just taking money out of the wrapper does not require a declaration).

As for premium bonds, we have heard of at least one local tax office allocating an exemption having compared them to a ‘game of chance’ organised by a government, whose winnings are exempt in France, however others have taken a contrary view.

Some experts argue they are not akin to a lottery because you retain your ‘stake’.

We suggest checking with your tax office as to its interpretation of this if necessary.