Thursday 11 February 2010

Thinking of moving to France from the UK ?

As a UK citizen moving to France, the French immigration regulations allow you to freely enter and leave France without restriction. Once you have lived here for three months, then provided you have sufficient income not to become a burden on the social security system and have healthcare insurance in place, you obtain temporary resident status which becomes permanent after five years. Having obtained temporary resident status, you automatically become tax resident here and you must make an annual declaration of your worldwide income. You have no choice over whether France is your main place of residence or not.

To take a brief look at the key money aspects:

Income tax

The tax burden in France is fairly light (particularly if your income is derived from UK pensions) and dependent upon your personal circumstances, you may find you'll pay little or no French income tax. If you have savings, then regardless of where they are held, the interest is taxable in France and you will pay an additional 12,1% as a 'social contribution' (quasi tax). When you make your first tax declaration here, you apply to HMRC to have your UK tax code amended to zero to avoid being taxed twice. Different rules apply if you are in receipt of a UK government pension which remains taxable in the UK.

Healthcare

If you are coming to France to live but not work, and you qualify for a form E106 or form E121, then you will be able to obtain immediate state health insurance cover without having to pay any financial contribution. The state will cover you for around 70% of your treatment costs leaving you liable for the remaining 30%. You can cover the shortfall by purchasing a complimentary 'top-up' policy at a typical cost of 50€ per person per month. The E106 has a limited period of validity, after which your state cover will cease. The E121 is valid for life.

If you do not qualify for an E-form, then unless you obtain employment/self employment and pay compulsory social security contributions, you will have no right to state health insurance and you must purchase and maintain a private health insurance policy. Once you acquire permanent residency status after five years, this condition no longer applies and you can be re-admitted to the state system on a means tested basis, paying 8% of your taxable income over a threshold.

Property taxes

You will pay two annual property taxes - tax d'habitation and tax fonciere. These are based on a notional rental value of the property and are payable in the autumn of the tax year. Dependent upon your age and financial situation, you may qualify for reductions in these taxes or even exemption.

Car costs

You will be required to register your vehicle in France at a typical cost of around 500-600€ dependent upon the particular model. There is no annual 'road' tax here and the controle technique (equivalent of the UK MOT test) must be carried out every two years. Maintenance costs can vary so you should shop around.

Other living costs and routine expenses such as insurance, utility bills, etc are likely to be broadly similar to the UK.

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