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UK Spring Budget: More detail on changes for Britons in France
Pension top-ups, capital gains, holiday lets and inheritance were all in the chancellor’s announcement
State pensions and capital gains tax on property are among the financial changes in the UK Spring Budget that could affect people in France with British links.
The measures are likely to be the last big financial changes before the general election, expected in the latter half of the year, in which all Britons who have ever lived in the UK are eligible to vote.
Read more: 3.5m Britons abroad urged to register to vote in UK elections
Future of class 2 voluntary NICs
One change raises questions about the rate that will apply in future when people in France pay voluntary National Insurance Contributions (NICs) to top up their UK state pensions.
Class 2 NICs are abolished from April 5 for the self-employed in the UK and the government will consult this year on plans for complete abolition of Class 2.
At present working people living overseas who opt to pay ‘top-ups’ do so at a Class 2 rate, which is a quarter the rate of Class 3 voluntary NICs paid by early-retirees living abroad.
The only other classes (1 and 4) relate to contributions on work in the UK.
The Connexion will report the ‘consultation plans’ for the abolition of Class 2 NICs as they are announced.
Read more: Explained: how to top up your UK state pension when living in France
Tax changes for second home sales and holiday lets
The higher rate of property capital gains tax is dropping from 28% to 24% from April 6, benefiting people who sell a UK property that is not their main home and make a profit.
Non-residents only pay tax on gains made since April 6, 2015.
From April 6, 2025, there will no longer be a special UK tax regime for furnished holiday lettings, which will be treated the same as long-term rentals for tax.
Moving back to the UK?
Another change in the budget concerns people who move to the UK from abroad and have lived outside the UK for at least 10 years.
For the first four years, they will pay no UK tax on income from overseas. There will also be three years of a relief on income from work duties done abroad for a UK firm.
Inheriting from UK-based family
One change that initially sounded of interest to people in France inheriting from UK-based family is, on further analysis, of limited scope.
The government said it wanted to make inheritance tax ‘residence-based’.
The change is about ensuring that the world-wide estate of wealthy residents residing in Britain is subject to UK inheritance tax when they die, even if their claimed ‘domicile’ (permanent home) is elsewhere.
Related articles
How UK’s Spring Budget may affect Britons living in France
UK Autumn statement: are there changes for Britons living in France?
Retiring to Spain or France: what are the main differences?
