Ask the experts
- Credit: Archant
Whether you’re planning your move to France, or are already living there, our panel of professionals aims to keep you fully informed with the best advice for every eventuality
Jean-Stéphane Vilain is the director of Selection Habitat, an estate agency specialising in properties of character in south and southwest France.
Ron Wright works for Exclusive Healthcare, which provides help and healthcare insurance for people in France.
Bill Blevins is the financial correspondent of Blevins Franks, which advises retired expats on tax and wealth management
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Q. I am relocating to France in the summer with my wife and two young children. I am considering working for an estate agent. Where do I start?
Bob Stoakes, Market Harborough
A. Working in real estate in France is not as complex as one would expect; that is if you decide to work for an established agency. Setting up your own agency is a very different matter due to the fact that is is a firmly regulated industry and you need the necessary competencies to obtain the licence, known as the ‘carte professionelle’. The first, most important, rule is to ensure that the agency you want to work for has this licence. This licence should be displayed in the office. If you cannot see it, it is perfectly acceptable to ask to see it.
Once you have established that the agency is licensed, you can begin to establish your working status within the agency. The most popular and rewarding option would be for you to work as an ‘agent commercial’, where you would work on a commission-share basis. This is technically a self-employed sales negotiator. There are two self-employed options: the first is an ‘auto entrepreneur’, which I recommend as a great start, as you can register instantly, pay less tax and it has a less onerous administrative burden. Once you have reached an income of €32,000, however, you would need to switch to the other option: the ‘entreprise individuelle’.
Of course, speaking French is essential. However, the fact that you speak English can be seen as an important factor for some estate agents in France. For example, we deal with international buyers and sellers, and as a result, have a strong team of successful British staff. When choosing an agency to work for, maybe consider working with an agency where your skills are valued and could stand out. Whether you have past real estate experience or not, you will (certainly with the most dynamic of agencies) receive formal training concerning all aspects of the job, so you do not need to worry about whether you have experience; although a strong sales record certainly helps.
One thing to be aware of is that once you have made a sale, it takes around three months for the sales process to be finalised, and for your commission to be paid. Therefore, it would be ideal if you had some savings to get through this initial period. However, once you have a few sales behind you, this can be the most successful way of earning a very good living in France, and one that requires very little initial investment.
Q. My husband and I purchased a property in France five years ago, and 18 months ago we put our UK house on the market. My husband is 64 and I am 57. In the last few months, my husband has been put on statins, and I have been diagnosed with an underactive thyroid. At the moment, in the UK, we both receive our medication free of charge. How would this work in France? We know we would have to purchase top-up insurance, and have planned for this as we do not intend to work. What would you advise?
Christine Wilson, by email
A. You and your husband are considered early retirees. In the past, you may have been entitled to a short-life S1 health form from the DWP (Department for Work and Pensions) which, depending on your recent national insurance contributions record, may have covered you for basic French state healthcare at UK expense for between one and two years.
In the summer of 2013, the Department of Health published a 60-page consultation document in which they proposed to stop issuing this short-life S1, with effect from 1 April 2014. At the time of writing, no decision has been published.
However, when your husband reaches UK state retirement age and, if he is entitled to a UK state retirement pension, he would also be entitled to a different sort of S1 health form. He should also ask the DWP for you, as his wife, to be named as his health beneficiary on his S1 – this means that his S1 would then provide you both with basic French state health cover at UK expense. Top-up insurance works solely in tandem with the basic French state reimbursement system; no medical questions are asked and insurers generally offer a range of top-ups.
However, if you wish to reside in France before the receipt of your husband’s UK state retirement pension and S1, then you would need private health insurance in the interim period. When applying to purchase private health insurance, insurers require the completion of a medical questionnaire, and this must include all pre-existing medical conditions. The private health insurer is entitled to exclude certain pre-existing conditions or may load the premium accordingly.
Q. Could you please clarify how foreign bank interest and dividends are taxed in France? When I began researching my move to France a couple of years ago, they were taxed at fixed rates. I then read that these rates have been abolished, and now you have to pay tax at income tax rates, which does not suit me so well because of my level of income. However, I’ve now heard that you have to pay a fixed rate of tax each month, so I am a little confused; is this the total tax? I plan to move to France early next year so want to make sure I’ve understood the rules right and I also want to find the most tax efficient way of generating investment income.
James Collins, Coventry
A. In France, investment income is now subject to tax at your marginal tax rate. On French bank accounts, the interest is taxed at source and is subject to a withholding tax at 24% plus social charges (15.5%) at source. The withholding tax will be applied as a credit against your final tax liability as calculated on your tax return. Non-French bank interest (including interest from UK ISAs) is taxable in France at the progressive scale rates.
For dividends, including those from EU companies, you are entitled to an abatement of 40% of the amount of dividend received. You will also be entitled to a credit for the 10% notional tax credit attached to UK dividends.
If you have ‘reference income’ of more than €50,000, or more than €75,000 for a couple, you are obliged to pay 21% advance tax on foreign interest received and 24% on foreign dividends, plus the 15.5% social charges. Reference income is calculated by reference to the amount of income and dividends that the household receives. The return and tax/social charges are due within 15 days of the end of the month of receipt of income. The income also has to be declared on the annual tax return the next year, when the tax paid can be offset against the income.
Under French domestic law, you must also declare any non-French bank accounts opened, closed or used during the calendar year on your French tax return, or a fine of €750 will be imposed per undeclared account per year.
Tax rates, scope and reliefs may change. Any statements concerning taxation are based upon our understanding of current taxation laws and practices which are subject to change. Tax information has been summarised; an individual is advised to seek personalised advice.
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