The end of the year is here! Well, not quite.
In fact, as I write this, it still feels like summer and I am staring at my heavily scorched, crispy yellow lawn.
Some might argue, therefore, that it is too early to be considering thick coats, Christmas shopping lists and all the other trappings of winter.
But my defence for addressing end-of-year financial housekeeping so soon is because the majority of articles on this theme are published too late to act upon their advice.
Mid-December does not offer a great deal of time to get your affairs in order, so consider this a head start if any of the following pointers are pertinent to your own financial situation.
1. Moving to France?
This first one is for those thinking of moving to France early in the New Year.
There may be advantages to doing it before December 31, unless your income is very significant in December.
Read more: Six common pitfalls financial experts see when people move to France
It means that you get into the French tax system at the end of the financial year (which is also the calendar year).
Doing so means that your first tax demand is very easy as there is not much or, indeed, nothing to report.
The bill might even be zero, giving you a great deal of time to sort out the tax position in the country you are moving from before having a full tax demand from the French authorities.
2. Property wealth tax
Conversely, if you have very significant property assets (over €1,800,000) you might want to delay the move until early January, as this will avoid property wealth tax for a year, depending on what tax you are willing to pay.
Read more: Explained: France’s property wealth tax is not as scary as you think
€2,000,000 of assessable property means tax of around €3,000, which may or may not be deemed significant.
Either way, your moving time requires careful thought – sooner rather than later.
3. Donations to charity
Well, it is the time for goodwill to all!
If you make gifts to registered (EU-based) charities, part or all of them can be offset against your next income tax bill, as long as you do it before December 31.
In France, 66% of your gift up to 20% of your income may be deducted (which can be carried forward for up to five years).
This might make both you and your chosen charity very happy indeed.
These gifts must be declared on your annual tax declaration.
4. Gifts to family
Of course, when it comes to being generous, we must not forget the family, as inheritance tax planning might also be important.
Read more: Why listening to friends’ advice on French inheritance can be bad
You can gift up to €100,000 to each child every 15 years, with no tax at all.
Many parents make financial gifts to their children, which can build up to significant sums over their lifetimes.
However, they often forget to declare them, meaning they are not omitted from their final inheritance bill, which is a waste.
It is a simple declaration - the Déclaration de dons manuels, or form 2735-SD.
You can also do it on the impots.gouv.fr website, following the Déclarer un don ou une cession de droits sociaux link in Déclarations.
Just make sure that you do it before the end of the year!
5. When a loan turns into a gift
It is also worth noting that some of these gifts start as loans (sorry, Bank of Mum and Dad) and loans over €5,000 must also be recorded, ideally before the end of the year (but you actually have until February 15).
Occasionally, children do repay loans to their parents (I appreciate this is rare and, as a parent myself, I feel your pain) and then the tax office tries to tax it as a gift or income.
This is easily avoided by registering the loan.
It can be done on form 2062, the Déclaration de contrat de prêt.
6. Drawing money from investments
January comes along with habitual New Year resolutions.
Often, people call us to say they are buying a new car or property, embarking on new building work, or going on a globe-trotting trip.
Could they draw money in one lump sum from their investments to fund their projects?
I lament that had they drawn some just a week earlier, they could have split the taxable value in half and significantly reduced their tax bill.
For example, if a married couple draws taxable income of €50,000, they will have significant income tax to pay.
If the same couple drew €25,000 each year over two years (in fact, over one week – for example, December 28 and January 2) they would pay none at all!
The moral of the story is to plan ahead and start before the end of the year.
If you are reading this in January, at least the Trésor public loves you!
When I started this article, I thought I might struggle to come up with topics – only to end up with pages of possible things to do before the end of the year.
There are many other important considerations, such as using up allowances, payments to pensions, property allowances, checking all your taxes, rebalancing investments, clearing out capital gains...the list goes on.
What have you missed?
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Does it make sense to 'buy-to-let' property in France?
