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What do expats need to know before relocating to France

France is one of the most popular destinations in Europe for expats, particularly those seeking a better lifestyle, quality healthcare, and a more relaxed pace in retirement. But before making the move, it’s important to understand how the French tax system works and what financial steps are worth taking in advance.

Following on from our recent article on relocating to Spain, GSB Wealth Partner Paul Waterman explores the financial and tax implications of moving to France.

In this article, he covers:

  • The basics of French tax residency

  • How investment income is taxed in France

  • What you should do before becoming a tax resident

  • Key financial reporting requirements

  • The role of tax-efficient wrappers like assurance vie

  • How to plan for wealth and inheritance taxes

What do expats need to know before relocating to Spain

What do expats need to know before relocating to France

The French tax system: What to expect

If France is where you have your main home, where you live most of the time, where you carry out your principal professional activity, or where your main economic interests are located, you may be considered a French tax resident under national legislation. Once you become tax resident, France applies tax to your worldwide income and assets.

Taxes can include:

  • Income tax, charged on a progressive scale
  • Social charges, which apply to most types of income
  • Wealth tax (Impôt sur la fortune immobilière, or IFI), which applies only to real estate assets
  • Inheritance and gift tax, based on your relationship to the beneficiary and where the assets are located

Unlike in some countries, such as Spain, the French tax system is centralised, meaning rules apply consistently nationwide, although the final liability depends on personal circumstances.

Source: Article 4 B – Code général des impôts

How France taxes investments 

Investment income in France is typically taxed at a flat rate known as the Prélèvement Forfaitaire Unique or “flat tax”. This rate is 30%, which includes:

  • 12.8% income tax
  • 17.2% in social charges

This flat rate applies to most dividends, interest, and capital gains. However, in some cases, you might benefit from choosing the progressive income tax scale instead, depending on your income level.

UK pension income may be exempt from social charges if you’re covered by a double tax treaty or hold an S1 certificate as a pensioner. It’s important to get advice on this before moving.

Source: French Ministry of Economy and Finance (impots.gouv.fr), BOI-RPPM-PSOC.

Steps to take before moving

Before you officially become a tax resident in France, there are several things you can do to make your finances more efficient:

  • Sell assets before you move, to avoid being taxed on gains in France
  • Restructure your investments using wrappers like assurance vie
  • Review your pension arrangements such as SIPPs or QROPS to understand how France will tax withdrawals
  • Consider gifting or restructuring your estate if you’re likely to face future inheritance tax

With the right planning, you can reduce your exposure to French taxes and make sure your wealth is protected.

What you’ll need to report

Once resident in France, you’ll need to declare all your global income and assets each year. This includes:

  • Foreign bank accounts and life insurance policies (using Form 3916)
  • Trusts, even if you’re not receiving money from them yet
  • Gains or income earned in foreign currencies, which need to be converted into euros for reporting purposes

The French tax authorities have access to a growing number of international data-sharing agreements, so accurate and timely reporting is key.

Assurance Vie and capitalisation contracts

France offers some unique and very useful investment structures that can help manage your tax exposure:

  1. Assurance vie

This is a popular form of investment account in France. It’s not life insurance in the UK sense, but a tax wrapper with multiple benefits:

  • You can defer tax until you take money out
  • After 8 years, gains are taxed at just 7.5% (plus social charges)
  • Each beneficiary gets a €152,500 inheritance tax allowance
  • You can make flexible withdrawals, and only the gain portion is taxed
  1. Contrat de capitalisation

This works similarly to assurance vie but can be held by companies and passed on between generations. It’s also helpful for reducing wealth tax, as it allows you to keep the original investment value for reporting purposes.

These vehicles are widely used in French financial planning, particularly by expats looking for long-term tax efficiency.

Source: Banque de France; Notaires de France; BOI-IR-BASE-40.

Wealth and inheritance tax planning

France does not tax all wealth only real estate valued over €1.3 million. Financial assets such as shares or investment funds are excluded from the wealth tax (IFI).

Inheritance tax rates depend on your relationship to the beneficiary:

  • Children and spouses benefit from lower rates and tax-free thresholds
  • Distant relatives or unrelated beneficiaries could face tax rates as high as 60%

Proper use of assurance vie and legal structuring can help limit how much tax your estate pays.

Final thoughts 

France is a fantastic place to live but becoming a resident means taking on a new set of tax responsibilities. By planning ahead reviewing your investments, choosing the right structures, and getting expert guidance  you can move with confidence and keep your finances working in your favour.

If you’re based outside of France and thinking about relocating there in the future, our cross-border advisers can help. We’ve supported many clients in structuring their pensions, investments, and estates *before* the move, allowing them to settle in with peace of mind.

Get in touch

Contact GSB today if you would like to discuss any of these matters with our in-house team.

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Disclaimer

This article is intended for individuals who are not currently tax residents in France. It is provided for general information purposes only and does not constitute personal financial, tax, or legal advice. The content is based on current legislation as of the date of publication and may be subject to change.

All investments carry risk. The value of investments can go down as well as up, and you may not get back the amount you originally invested. Past performance is not a reliable indicator of future results. You should seek personalised advice before making any financial decisions.

GSB Capital Ltd is registered with the Dubai International Financial Centre (DIFC), licence no. CL4377, and is regulated by the Dubai Financial Services Authority (DFSA) under licence no. F006321. GSB Capital Ltd is also authorised and regulated by the UK Financial Conduct Authority (FCA).

 

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