Explained: taxes and legal residence in France and the UK

Where are you resident? It seems a simple enough question but, in reality, this question can be complex for expatriates and those with international lifestyles.

Different rules apply depending on the context, and the criteria for determining residence vary between jurisdictions.

Are you meeting both your legal and tax residency requirements? To stay compliant and make use of tax planning opportunities, UK nationals need a clear understanding of the following key residence frameworks.

Tax residence rules in France

Under the Code Général des Impôts, individuals are deemed to be tax resident in France if one of these four tests is fulfilled: 

• France is your main residence or home (foyer) – the place where your close family habitually live, or where most of your personal life is centred. Your foyer can be in France even if you spend more time out of the country.

• France is your principal place of abode (lieu de séjour principal). This usually means spending more than 183 days a year in France, but may also apply if you spend more time here than any other country and cannot prove tax residence elsewhere.

• Your principal activity is in France – your occupation or main income arises here.

• France is the ‘centre of your economic interests’ – where your most substantial assets are based, your business affairs are, or where you draw a larger part of your income.

If you meet any of these criteria, you are liable to pay French tax on worldwide income, gains and property wealth. It is your responsibility to declare all your income and assets as required. 

Contact Blevins Franks to find out more about making your money work for you in France.

UK Statutory Residence Test

The UK Statutory Residence Test (SRT) determines whether an individual is liable for UK tax on their worldwide income and gains each tax year. They must work through three tests to determine residence status. In summary:

• Automatic overseas test: You are non-UK resident if you spend fewer than 46 days in the UK that tax year – or just 16 days if you were resident in the previous three years – or work full-time overseas with limited time in the UK.

• Automatic residence test: You are UK resident if you spend 183-plus days in the UK, have your only home in the UK, or work there full-time.

• Sufficient ties test: This third test is used when residence status cannot be established under the first two. It is based on a combination of days in the UK and the number of ‘ties’ you have: family; available accommodation; substantive work in the UK; 90-plus days in the UK over the previous two years; and spending more time in the UK than in any other country.

If you meet both the French and UK residence criteria, tie-breaker rules specified under the double taxation treaty determine your status. 

UK long-term residence status

The UK’s new long-term residence (LTR) regime is principally used to establish liability to UK inheritance tax (IHT). Generally, the key rules and implications are:

• Long-term residence status applies to individuals who have been UK tax resident for 10 out of the last 20 tax years.

• An individual retains long-term residence status for up to 10 years after leaving the UK.

• As a general rule, individuals classified as long-term UK residents are subject to UK inheritance tax on worldwide assets, even if currently living abroad – but it is different in France.

• All UK-based assets remain within the scope of UK inheritance tax, regardless of whether the owner lives abroad, including in France, long term.

• Individuals relocating to the UK who satisfy the long-term residence criteria may be eligible for a four-year exemption on some overseas returns under the new Foreign Income and Gains regime.

Position for British expatriates in France

France is one of the few countries with an inheritance tax double taxation treaty with the UK.

Under its terms, your worldwide assets are generally subject only to French succession tax rather than UK inheritance tax, with the exception of UK-based assets.

Any assets you keep in the UK, including pension funds from April 2027, remain fully subject to IHT, as well as being assessed for French succession tax. 

Lawful residence 

Putting tax considerations aside, you must be legally entitled to reside in France, properly registered, and compliant with the relevant rules.

Since UK nationals lost freedom of movement, British expatriates living in France are required to hold a carte de séjour (residence permit) or a VLS-TS long-stay visa.

Holding a residence card in France generally implies that France is your principal place of residence. In practice, this can mean spending at least half a year in France – typically also making you tax resident. You may be required to demonstrate proof of residence when renewing your residence card.

Without a valid residence permit, your stay is limited to 90 days within any rolling 180-day period across the Schengen area. Tighter border controls under the EU’s Entry/Exit System (EES) now automatically record movements across EU borders.

European Commission data indicates that thousands of overstayers have already been identified and refused entry. Tax authorities may use this data to identify individuals who meet residency tax criteria but have not declared their status. Increasing digitalisation is creating unprecedented transparency, not only in tracking physical movements but also in monitoring financial activity.

It is therefore essential to ensure full compliance with all residence, tax and reporting obligations.

Becoming resident in France

Moving to the French system might seem daunting due to its administrative processes, but there are compelling reasons not to be deterred. France has streamlined many bureaucratic procedures, particularly for non-EU citizens, making relocation smoother than you might expect.

Additionally, there is no real need to fear becoming tax resident in France – particularly given the direction of UK taxation. In many cases, it is possible to legitimately re-engineer your financial arrangements to make France your very own tax haven, especially if you are retired.

Much depends on your personal situation and objectives, and how you plan and organise your affairs, so take personalised, cross-border advice.

Rob Kay is a financial adviser and regional director of Blevins Franks