As exciting as it is to start a new life in France, there are, of course, certain mundane aspects involved. To echo the time-honoured saying, nothing is certain in this world except death and taxes. However, while the first of those things may seem simple enough, the second can bring considerable uncertainty and confusion to people moving between countries.
Here at Kentingtons, we provide tax, investment, and financial advice specifically to private individuals relocating from the UK to France. The following information on the approaches an expat may take in relation to their tax liabilities will focus on this angle.
However, it is also important to emphasise that the below cannot be treated as specific advice. After all, everyone’s situation will inevitably be different and unique to them.
What determines your tax residency in France?
One of the primary concerns for UK nationals relocating to France is determining what constitutes “tax residency” in France.
This should not be confused with the concept of legal residency, which pertains to the rights that a person may have as a citizen of one state to reside and work in another jurisdiction.
We have previously addressed the French tax residency rules in some detail. But in summary, fulfilling any of the below criteria would mean the French authorities would likely consider you a “tax resident in France”:
- Spending more than 183 days per calendar year in France
- Having a main home or primary residence in France
- Having your “centre of economic interests” in France (as evidenced by, for example, France being your primary source of income, business, or investments).
If you are moving to France from another country and attempting to determine which country you are a “tax resident” in, the rules of the country you are moving from become irrelevant, as a double tax treaty overrides them. This is the case for the UK, where the agreement between the UK and France overrides the statutory residence test.
How do Double Taxation Agreements (DTAs) protect you from being taxed twice?
These agreements, such as the one between the UK and France, ensure that the same income, such as wages, dividends, interest, and/or capital gains, is not taxed twice, providing a sense of security for your financial situation.
It is not only the UK and France that have a double taxation treaty between them. Indeed, France has double taxation agreements (DTAs) with more than 120 countries, ensuring that the same income, such as wages, dividends, interest, and/or capital gains, is not taxed twice.
Double taxation agreements typically specify which country has the primary right to tax particular types of income. They also tend to include relief mechanisms such as tax credits and exemptions, providing reassurance that you won’t be taxed twice on the same income.
The France-UK double taxation agreement
The DTA currently in effect between the UK and France was signed in London in 2008 and took effect in France as of January 1, 2010. The agreement has been effective in the UK since 1st April 2010 for corporation tax, and from 6th April 2010 for income tax and capital gains tax.
One of the key elements of the UK-France Double Tax Agreement (DTA) is that, under certain circumstances, a non-UK resident selling a property in the UK would typically not be required to pay UK capital gains tax.
Regarding property owned at the time of departure; to avoid UK capital gains tax, the sale must occur during a period when the individual is ultimately a non-UK resident for at least five complete and consecutive UK tax years in total. Such a gain will, though, be assessable to tax in France, with a credit for any tax paid in the UK.
The property wealth tax “holiday” is also retained in the latest version of the UK-France double taxation agreement. This means that for a UK national’s first five entire French tax years after they become a resident of France, only French assets will be used to determine their wealth tax liability, with all other assets being ignored.
With effect from their sixth year of residence, the given individual will become obliged to pay wealth tax on their worldwide property.
How are different types of income taxed in France compared to the UK and Europe?
There is considerable diversity in the tax systems of Europe as a whole, so it is naturally challenging to summarise the differences here.
Nonetheless, here are some key points to consider regarding the taxation of various types of income in France, as compared to the UK, in particular.
- Employment incomeBoth France and the UK have progressive tax rates on employment income. In the case of 2024 income declared in 2025, the income tax rate in France is 0% up to €10,777, while the highest rate of 45% applies above €168,994.This compares to the situation in the UK for 2024/25, where the rate is 0% up to £12,570, rising to the highest tax rate of 45% for those earning more than £125,140.
According to a currency conversion at the time of writing, €168,994 is equivalent to approximately £142,412 – so, the 45% rate applies later in France compared to the situation in the UK. However, social security contributions are relatively high in France, amounting to approximately 20% to 25%, including both the employer’s and employee’s shares.
- Rental income from the UK and European countriesPresuming you are “tax resident” in France according to the criteria I mentioned earlier, you will be liable for tax on your worldwide income. Such income will naturally include rental income you generate from properties in the UK or elsewhere in Europe.However, it is also essential to be aware of how any relevant Double Tax Agreements (DTAs) have allocated taxing rights. Under Article 6 of the UK-France Double Tax Agreement (DTA), for instance, rental income from immovable property, such as UK real estate, is taxed in the country where the property is located.
Most DTAs that France has with other European Union (EU) countries, such as Germany and Spain, follow this same principle. Therefore, the rental income will be taxed in the country where the property is located.
- Investment income (dividends, interest, and capital gains)If you are a French tax resident, you will be taxed on your worldwide investment income. In terms of tax treatment, you can choose between two options: a flat rate withholding tax (also known as prélèvement forfaitaire unique), at a simplified rate of 30%, or the standard progressive income tax scale, ranging from 0% to 45%, plus social charges, with potential allowances or deductions.For comparison, UK tax residents are also taxed on their worldwide income. Progressive rates of 20% to 45% apply, with allowances and no social charges.
- Pension incomeIf you are a resident in France, all your pensions – including state, private, occupational, and foreign pensions – are taxable unless a Double Tax Agreement (DTA) explicitly exempts them.For example, if you have a UK state pension and are an expat living in France, the double taxation treaty between the two nations dictates that it will be subject to French tax laws and taxed solely in France. This means that your UK state pension will be added to your other income and taxed at your marginal income tax rate.
However, suppose you are receiving a UK Government service pension (such as from public service employment, the civil service, or the military). In that case, this will be taxable solely in the UK, even if you are a tax resident in France. Please note that this income must still be declared in France.
As for workplace pensions and personal pensions (including Self-Invested Personal Pensions, or SIPPs), these will be taxed in France, rather than in the UK.
As an expat in France, you may have considered transferring your UK pension to an HMRC-compliant overseas pension scheme, known as a QROPS. I have previously written about the implications of these schemes.
Strategies to reduce your overall tax burden and avoid double taxation
Here, then, are some approaches that people moving to France from another country might consider as they seek to minimise their tax liability:
- Maximising foreign tax credits under DTAs
- Structuring investments in a tax-efficient manner (for example, by using a French assurance vie UK ISAs)
- Timing the distributions of certain income, such as capital gains and pensions, to optimise taxation
- Utilizing France’s tax-efficient savings and pension schemes, such as the plan d’épargne retraite (PER, or retirement savings plan) and assurance vie.
Final thoughts: When to seek professional tax advice
To reiterate, it is ultimately only by seeking advice tailored to your needs from a well-informed professional that you can be sure of how to manage your tax liabilities between France and any other countries in which you have personal and/or financial involvement, such as the UK.
Indeed, there are specific common scenarios in which people relocating from the UK to France are likely to find expert advice particularly important. These include situations where dual tax residency issues arise, as well as when dealing with complex investment portfolios, and when it comes to inheritance tax planning for UK and French-based assets.
By reaching out to a tax adviser, such as Kentingtons, you will be able to navigate any double taxation agreements and optimise tax efficiency as an expat. To learn more about how Kentingtons can assist you, please get in touch with us by phone or email.