Has France become a tax haven? asks Nathaniel Litmann in The Schmidt Report. A November article in Tolley’s Taxation suggests so.
The rules, which are complex and appear to apply mostly to non-domiciled UK residents, arise because of a new measure called the ‘bouclier fiscal’. This in effect limits all direct tax to no more than 50% of income.
So if you are able, legally, to shelter your income elsewhere (i.e. you’re an entrepreneur or live off investment income), there is “huge potential” for tax savings.
An example cited in the magazine shows how £1m could be invested to produce an income of £50,000 (5%) a year, with tax payable on just 5%, or £2,500, of that sum. Even at the 50% tax rate, that’s a maximum of £1,250 tax.
Other “interesting tax breaks” include a five-year exemption from wealth tax on foreign assets for those moving to France for the first time, tax-free gifts of £156,359 per parent per child every six years and zero inheritance tax on assets transferred to a spouse. And “you can still make the system work as a dual resident”, provided your main home is in France, not Britain.