French Wealth Tax 2018
Since January 1st 2018 the new changes to French Wealth tax are now are in force. Macron is slowly trying to modernise the country’s stance on business and investment. Consequently the current laws are indeed more in line with this view. As a result French Wealth Tax Impôt sur la Fortune Immobilière (IFI) is only paying on property/real estate.
Previously French wealth tax included all non-business assets on a person’s total worldwide assets if the total value was over €1,300,000. Such as savings and investments, property, cars, jewelry, etc. These were applicable for taxpayers domiciled in France and French assets for non paying residents.
Am I liable for French Wealth Tax?
There are a number of factors to consider for liability. The calculation itself is dependant upon whether you reside in France.
Non – Resident: Only property assets in France which are taxed in line with any double tax treaty between France and your home nation.
Resident : All of your worldwide property assets and investments are considered taxable.
French Wealth Tax rates
| Real Estate Value | Rate of Tax |
|---|---|
| €0 – €800,000 | 0% |
| €800,000 – €1,300,000 | 0.50% |
| €1,300,000 – €2,570,000 | 0.70% |
| €2,570,000 – €5,000,000 | 1% |
| €5,000,000 – €10,000,000 | 1.25% |
| €10,000,000+ | 1.50% |
There is a cap on wealth tax. Hence, no total tax can exceed 75% of income which is only applicable to residents. If this applies to you we recommend speaking to a tax specialist.
Today’s market value of your property is used for wealth tax purposes. For your main residence, subject to living in it the market value can be reduced by 30%.
Declaring French Wealth Tax
No professional valuation is required in the reporting process of French Wealth Tax. It is the homeowner’s discretion to judge and decide if they deem themselves to be liable and in turn pay wealth tax.
What does this mean for my savings and investments?
Due to negating French Wealth Tax a number French residents held niche investments. Antiques and classic cars were commonly bought to avoid paying such high rates. This, however, is no longer the case since the opportunity has arisen to make use of the highly competitive financial market. The revised French Wealth Tax laws mean that holding your money in these niche investments are a thing of the past and more flexible, accessible and liquid methods are becoming ever more popular.
Offshore investment platforms, locally tax compliant bonds with actively managed funds offering access to your monies at any time at no cost are just some of the options.
By utilising specialist onshore and offshore solutions you can enjoy consistent, strong capital growth. Whilst still getting full flexi access to your funds. Thus allowing your pot of money to not decrease whilst drawing an income or taking the occasional lump sum.
In conclusion if you are interested in finding out more about Expat Investment solutions including a full free review of your existing setup, contact a professional independent Adviser at Harrison Brook today. Harrison Brook is the leading international online broker of expatriate financial services, products and expat financial advice. Get in touch now and take control of your financial future.
