How to organise your finances before moving to France
PUBLISHED: 09:42 07 August 2015
Getting your finances in order before you move to France is important to make the move as smooth as possible. It may seem daunting but here are 6 things to do before you leave the UK
1. Inform HMRC of your likely departure date from the UK
Although this is not a mandatory step, it is recommended, as it indicates to HMRC your likely residence status after you leave the UK. In most cases, this means that you can be treated as UK non-resident from the date of your departure. To do this you will have to obtain and fill in a Form P85 from your local tax office, or download one from the HMRC website (www.hmrc.gov.uk).
2. Submit a Form R105
If you retain any UK bank accounts, the bank interest will only be taxable in France. To receive your UK bank interest gross, you can submit a Form R105 to your bank or building society. Not all banks will pay interest gross, and it usually depends on the type of account you have. Form R105 can also be downloaded from the HMRC website at www.hmrc.gov.uk/forms/r105.pdf.
3. Submit a Form NRL1i
Should you have any continuing UK rental income when you are in France, you can usually arrange for it to be paid gross to you. You can do this by submitting Form NRL1i to HMRC, which can be done online at www.hmrc.gov.uk/cnr/nrl1.pdf.
4. Put your pension(s) in order
Any UK government service pensions will remain taxable in the UK and will not be directly taxed in France (though the income is taken into account for the purposes of determining the rate of tax payable on other French source income). UK state retirement pension is always paid gross, so you will declare it and pay tax on it in France. For personal pensions and any non-government source occupational pensions, UK pension providers will continue to deduct UK tax at source until HMRC are satisfied that you are French tax resident. They will then advise the provider to pay the income to you gross and make a repayment of any UK tax deducted at source.
To arrange this, you should obtain Form France/Individual from HMRC at www.hmrc.gov.uk/cnr/france-individual.pdf. The form comes in two identical parts (French and English) and you submit it to your local French tax office – usually with your first tax return – who stamp it to confirm you are French tax resident, and that the income is taxable in France. They then send the English part to HMRC.
You need to let your pension providers, including the DWP (Department for Work & Pensions), know of your new address and make arrangements for any change in where the pension is to be paid, i.e. bank account. UK state pension can also be paid directly into your French bank account.
5. Apply for a pension forecast
If you are moving to France before reaching the UK state retirement age, you should apply for a pension forecast from the DWP to determine whether you have made sufficient contributions to receive a full state pension once you reach state retirement age. You can do this online using form BR19 at www.gov.uk/government/publications/application-for-a-state-pensionstatement-form-br19-interactive-pdf. If you have not made sufficient contributions for a full UK state retirement pension, it is possible to make top-up contributions to increase your pension entitlement by paying voluntary Class 2 or Class 3 National Insurance contributions in the UK after you have moved to France. Find out more about French pension tax for expats.
6. Register with the French state health care system
You can do this if you hold Form S1, available from the DWP, which provides health care cover on a household basis. You are entitled if you are in receipt of a UK state retirement pension (or certain long-term benefits). Unless you have Form S1, or intend to work in France and pay social security contributions, you need private medical cover. Find out more about accessing the French health care system.
Rob Kay, Blevins Franks
The 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 must take personalised advice.