Tips

Blevins Franks Financial Tips - How to Take Control of your Finances in an Uncertain World

The last few years have emphasised how uncertain life can be; how we never know what is around the corner.  Brexit and the pandemic have now been followed by the worrying and upsetting events in Ukraine.  Life feels more uncertain again. 

This perhaps makes it more important for us to take control where we can, as much as we can, particularly when it comes to our family’s long-term future and security.  So here we take a look at the key wealth management considerations we should review from time to time. 

Pension planning

For most of us, our pension funds are key to our long-term financial security, so great care must be taken to do what is right for you and your family.  The UK pension freedoms may no longer be ‘new’, but they can still cause uncertainty when deciding what to do with yours, and each option has pros and cons. 

If you are planning to spend your retirement years in France, you also need to establish the local tax implications and what works best for you as a France resident.

Many expatriates have chosen to transfer UK pensions to a Qualifying Recognised Overseas Pension Scheme (QROPS) for the advantages they can offer, such as income and currency flexibility. But they do not suit everyone – you may find it more beneficial, for example, to reinvest UK pension funds into French-compliant investment arrangements, or even leave your UK pension where it is.  Also, the UK has recently made changes which make transferring to QROPS more difficult. 

 

In any case, you should always take personalised, regulated pensions advice to ensure you take the best course of action for your particular circumstances.

 

Your savings and investments 

It is impossible to control what may or may not happen in the markets in future, what geopolitical events may cause volatility or prices to rise; we can’t know what interest rates will be five, ten, or twenty years from now. 

But we can take steps to build an investment portfolio that:

·      is based around our risk profile, circumstances, time horizon and objectives; and 

·      includes suitable asset allocation and diversification to control risk; and 

·      is designed to provide capital growth over the longer term to beat inflation so you can maintain your spending power through retirement. 

Geopolitical events, like those we’re seeing at the moment, can cause significant market turbulence which can be unsettling for investors, but that does not mean it’s the time for knee-jerk reactions or short-term changes.  

History has shown that ‘timing’ markets is incredibly difficult, especially where out-sized market movements are involved. And in timing, an investor needs to get it right twice – when to encash some of your investments and when to get in the market. Getting one right is rarely achieved, as the news has already arrived by the time you can look to act (so markets will already have reacted). The same also applies when markets move sharply upward as we saw after the initial covid news in 2020.  

Investing is a marathon not a sprint, so being patient and sticking with the plan can pay off. 

Estate planning

While we cannot avoid death, with good estate planning we can control who receives our assets and when. Is your legacy on track to go to your chosen heirs according to your wishes and with minimal taxation? Take care to understand the succession laws and inheritance tax in France and anywhere else you have assets and heirs, as well as the pros and cons of using the EU succession regulation ‘Brussels IV’ to override local ‘forced heirship’ rules.

You need a strategy that achieves your wishes while making the process straightforward and tax-efficient for your heirs. And don’t forget your own needs; consider the tax implications to find the optimum solution for your wealth during your lifetime too.  

Tax planning

The way you structure your assets and wealth can make a significant difference to your tax bill. You need to make sure your arrangements are structured appropriately for your life in France as well as your particular aims, circumstance, goals and risk appetite.

Are you taking advantage of tax-efficient structures available in France? Besides tax savings, these may offer additional benefits such as currency and income flexibility and estate planning advantages. 

Ultimately, cross-border tax and financial planning is complex. While you can do some groundwork yourself, you will benefit from talking to a specialist adviser with in-depth knowledge of the French tax regime and its interaction with UK rules. They can help you take advantage of available tax, investment, pensions, and estate planning opportunities to ensure you do what works best for you and your family, today, tomorrow and the future. 

By Rob Kay, Senior Partner, Blevins Franks 
Link to Rob Kay profile / contact page

You can find other financial advisory articles by visiting our website here

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; individuals should seek personalised advice.

Blevins Franks Group is represented in France by the following companies:  Blevins Franks Wealth Management Limited (BFWML) and Blevins Franks France SASU (BFF). BFWML is authorised and regulated by the Malta Financial Services Authority, registered number C 92917. Authorised to conduct investment services under the Investment Services Act and authorised to carry out insurance intermediary activities under the Insurance Distribution Act. Where advice is provided outside of Malta via the Insurance Distribution Directive or the Markets in Financial Instruments Directive II, the applicable regulatory system differs in some respects from that of Malta. BFWML also provides taxation advice; its tax advisers are fully qualified tax specialists.  Blevins Franks France SASU (BFF), is registered with ORIAS, registered number 07 027 475, and authorised as ‘Conseil en Investissements Financiers’ and ‘Courtiers d’Assurance’ Category B (register can be consulted on www.orias.fr). Member of ANACOFI-CIF. BFF’s registered office: 1 rue Pablo Neruda, 33140 Villenave d’Ornon – RCS BX 498 800 465 APE 6622Z.  Garantie Financière et Assurance de Responsabilité Civile Professionnelle conformes aux articles L 541-3 du Code Monétaire et Financier and L512-6 and 512-7 du Code des Assurances (assureur MMA). Blevins Franks Trustees Limited is authorised and regulated by the Malta Financial Services Authority for the administration of retirement schemes. This promotion has been approved and issued by BFWML. 

Blevins Franks Financial Tips - Resolve to Review Your Financial Planning for 2022

Take time to check your tax planning, investments, pensions and estate planning are all on track to protect your family’s long-term wealth. 

The New Year is a time when most of us take stock of our situation and set goals to improve our health, happiness, lifestyle and wealth. This year, make it one of your resolutions to check your financial planning is on track to meet your needs and protect your family’s long-term financial security.

Why regular reviews are important 

Regular reviews help keep your financial affairs compliant and up to date. Tax rules or financial regulations can change at any time, which may affect the tax efficiency – or even legality – of your existing arrangements. There may also be new opportunities that you could find beneficial… but only if you know about them. And with Brexit still relatively new, and more potential changes on the way, it is important to keep ahead of any developments that may affect you, for better or worse. 

You also need to consider if any changes in your personal and family circumstances mean you should adjust your arrangements. Did you welcome any new family members or are there any upcoming major life events – such as retirement, relocation or divorce – that may warrant a rethink of your plans? 

For a truly effective review, and to ensure it is suitable for your life in France, consider how your tax planning, investments, pensions and estate planning work together. 

Tax planning

You should first make sure you know where you are resident for tax purposes, especially if you are new to France or spend time in both countries. You then want to structure your investments and wealth in the most suitable way to minimise taxation – in France, the UK and wherever you have financial interests – while still meeting your obligations. 

In today’s world of ‘automatic exchange of information’, it is more important than ever to get it right. Your local tax office receives financial information about your offshore assets without having to even ask for it. 

Cross-border tax planning is complex, so take specialist advice to achieve peace of mind and potentially secure significant tax savings.

Savings and investments

If you do not already have a financial plan in place for France, you need to take a fresh look at your savings and investments. Are they actually better suited to a UK resident? Do they meet your risk/reward appetite? Are you taking advantage of suitable tax-efficient opportunities in France?

Successful investing is about having a strategy specifically based around your personal circumstances, time horizon, needs, aims and risk tolerance. You should ensure you have adequate diversification to avoid over-exposure to any given country (including the UK), asset type, sector or company. Explore investment structures that allow multi-currency flexibility to help minimise exchange rate risk.  

Pensions

For most people, their pension is key to their financial security through retirement, so deciding what to do with yours could be one of the most important financial decisions you make.  

So take the time to explore all the available options, weighing the pros and cons and considering the tax implications and potential benefits in France. 

Make sure you take regulated advice to protect your retirement benefits from pension scams and do what is right for your personal circumstances and aims. 

Estate planning  

It is vital to review your estate planning when living in France.  Here in France both succession law and tax work very differently to the UK. 

Are you aware, for example, that France’s ‘forced heirship’ rules could automatically pass a significant proportion of your worldwide estate to your direct family, whatever your intentions? You can specify in your will for the EU regulation ‘Brussels IV’ to apply relevant British law to your estate instead, but take care to understand your options and any tax implications. 

Your estate plan should be set up to achieve your wishes in the most tax-efficient way possible. 

To bring all these complex elements together and ensure you have not missed out on any suitable opportunities, take expert, cross-border advice. Spending time on a financial health-check now can secure peace of mind that you and your family are in the best position to enjoy a prosperous 2022 and beyond.    

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; individuals should seek personalised advice.

Blevins Franks Group is represented in France by the following companies:  Blevins Franks Wealth Management Limited (BFWML) and Blevins Franks France SASU (BFF). BFWML is authorised and regulated by the Malta Financial Services Authority, registered number C 92917. Authorised to conduct investment services under the Investment Services Act and authorised to carry out insurance intermediary activities under the Insurance Distribution Act. Where advice is provided outside of Malta via the Insurance Distribution Directive or the Markets in Financial Instruments Directive II, the applicable regulatory system differs in some respects from that of Malta. BFWML also provides taxation advice; its tax advisers are fully qualified tax specialists.  Blevins Franks France SASU (BFF), is registered with ORIAS, registered number 07 027 475, and authorised as ‘Conseil en Investissements Financiers’ and ‘Courtiers d’Assurance’ Category B (register can be consulted on www.orias.fr). Member of ANACOFI-CIF. BFF’s registered office: 1 rue Pablo Neruda, 33140 Villenave d’Ornon – RCS BX 498 800 465 APE 6622Z.  Garantie Financière et Assurance de Responsabilité Civile Professionnelle conformes aux articles L 541-3 du Code Monétaire et Financier and L512-6 and 512-7 du Code des Assurances (assureur MMA). Blevins Franks Trustees Limited is authorised and regulated by the Malta Financial Services Authority for the administration of retirement schemes. This promotion has been approved and issued by BFWML.
 

You can find other financial advisory articles by visiting our website here