January is a time when many people set goals for the year ahead, whether health or lifestyle related.
When it comes to financial planning, however, focusing on just one year is not nearly enough. What is needed is a long-term strategy that safeguards your financial security through retirement and ensures a smooth, tax-efficient transfer of wealth to future generations.
One key reason to review your savings and investments, tax and estate planning is to ensure they are up to date. January is a particularly good time for this, since we are starting a new tax year in France and you should assess how any changes affect you.
British expatriates likely also need to adjust their wealth management following the UK’s autumn budget.
Both France and the UK have had rather interesting budgets these past two years, though for different reasons. The UK tax reforms have been particularly far reaching and require action to protect your wealth and legacy.
Your personal and family circumstances also evolve over time, making it necessary to adjust your arrangements accordingly.
Contact Blevins Franks to find out more about making your money work for you in France.
Many people handle each element of financial planning separately, using various advisers or relying on their own research. They might occasionally buy shares or investment funds, leaving older holdings unmanaged without a clear strategy.
They may leave pensions unchanged, even when they have multiple pots from different employers. They may consult a tax specialist about French taxation, or a lawyer for a French will.
True financial planning, however, means looking at the bigger picture. The way your investments are structured can influence your French tax exposure.
Estate planning here is far from straightforward, with complex succession rules and forced heirship laws that affect what you can achieve. Similarly, when reviewing your pensions, it is important to consider all your retirement assets together and the income they can provide.
Approaching each element in isolation can have unexpected consequences for you and your heirs.
Here is a summary of three key areas you should consider in your review.
French residency and taxation
Living in France necessitates changing your approach to finances. What worked well for you at home rarely translates into tax efficiency here. Even the most carefully planned foreign strategies often need a complete rethink once you become a French resident.
To make the most of your new situation, explore solutions designed for France. Certain arrangements can offer valuable tax advantages, while remaining fully compliant.
For example, an assurance-vie policy is not just a tax-efficient investment – it can provide flexibility and benefits that go beyond reducing your tax bill.
Being a French resident often offers tax advantages. For example, the income tax parts system helps couples where one receives a much higher income than the other.
Another example is if you are in a position to safely take your entire pension as a lump sum. While Britons in France are not eligible for the UK’s 25% tax-free lump sum, some people can limit taxation on the whole amount to just 7.5%.
This may be possible if your contributions were paid to a contributory scheme and if you are taking out your whole pension without the possibility of taking another lump sum.
If you hold a Form S1, you are not subject to the additional social charges on pension income and lump sums, and the charges on your investment income are significantly reduced.
Estate planning
Estate planning should not be left until the end of your financial planning journey. In France, the way you own property and investments directly affects how your assets can be passed on and the amount of tax your heirs will pay.
These rules are complex, so it is important to factor them in early when purchasing property or setting up investment structures.
As we start 2026, retired British expatriates need to apply some urgency to their estate planning. From April 2027, pension funds become subject to UK inheritance tax. This will impact your UK pensions, even if you have lived in France for many years.
In pension terms, 2027 is not far away at all, since the paperwork involved can take many months. Now is the time to take professional cross-border advice to identify what options are available.
Financial structuring for life in France
The cornerstone of successful financial planning is ensuring it is built around your circumstances – your lifestyle, future plans, family needs, income goals, objectives, time horizon and risk appetite.
If you do not already have a clear, strategic plan, take a fresh look at your savings and investments. Ask yourself:
- Are they appropriate for your situation today?
- Is your portfolio too risky, or perhaps not diversified enough?
- Can it deliver the income you need without eroding your capital?
- Would consolidating shares and funds make management easier?
Alongside this, review your tax exposure on investment income and gains. Could you benefit from more tax-efficient structures?
Consider how your assets are held so they can pass smoothly and tax-effectively to your chosen heirs. Certain assurance-vie solutions, for example, allow you to hold a wide range of investments while offering tax advantages and estate planning benefits.
There are many options, so take care to select the right one for your needs.
Every family is unique. Your financial strategy should be tailored to you, with all elements working together to create a cohesive wealth management plan.
For peace of mind, and to avoid unintended consequences, seek expert advice.
Rob Kay is a financial adviser and regional director of Blevins Franks
