Blevins Franks Financial Tips - Protecting your Financial Security Through Retirement

Retirement can last 30 years or more. To help us enjoy these well-earned years and have peace of mind, we all need to plan ahead, build up our savings and then protect them for our long-term future.  While the earlier we start doing this in our careers the better, it gets more important the closer we get to retirement.  And we need to continue taking steps to protect our retirement savings even after we’ve started drawing our pensions, regularly reviewing our arrangements to ensure we continue meeting our retirement goals. 

Before retirement
As retirement begins to get closer, it’s time to start planning how you want to spend your golden years and ensure you are on the right track financially. There may be steps you can take today to help make your retirement goal a reality.

 Questions to ask yourself include:

·      Will I be able to afford to retire when I want to?

·      What is the best strategy for withdrawing from my business or employment?

·      What options do I have for my pensions? Are they likely to change?

·      Will I be able to retain my existing wealth and assets?

·      Do I want to spend some or all of my retirement abroad?

Let’s say that you plan to retire within the next few years and move permanently to France. You may have concerns about whether you can afford your preferred lifestyle without having to sell existing assets. Perhaps you have a business to sell and are unsure how best to convert your years of hard work into a retirement nest egg. Then there are the complex residence and tax implications of living in a different country.

 Professional financial advice can prove invaluable here, especially with an adviser who understands France and can provide cross-border advice covering both countries. A good adviser will take a holistic view of what you have – your savings, investments, assets, pensions – together with what you want – your income requirements, estate planning wishes – and an objective assessment of who you are – your circumstances, timeline, goals, risk appetite – to design a personalised retirement plan for you. 

After retirement 

Being retired doesn’t mean you can forget about retirement planning. 

Regular reviews allow you to adapt your strategy to suit your changing circumstances and goals, such as incorporating new family members, addressing health issues or relocating. It enables you to keep up with the ever-changing tax and pensions landscape, including new opportunities that could work in your favour.  

 You also need to keep protecting your savings and retirement income from inflation. As the cost of living rising, the value of your money falls, so that in the long-term you could have considerably less spending power than you have today. 

 Your pension options

 Pensions are usually the foundation of retirement, so deciding what to do here may be one of life’s most important financial decisions. Pensions are complex, and with so much choice available, you must take great care.

 You might benefit from consolidating several UK pensions into one to provide a coherent, more cost-effective investment platform for your retirement income, but first establish what would be the most tax-efficient approach for a France resident. Receiving pension income in sterling also exposes you to conversion costs and exchange rate risk.

 Many British expatriates have chosen to transfer their UK pensions to a Qualifying Overseas Pension Scheme (QROPS) which have provided flexibility to take income in euros, more freedom to pass benefits to chosen heirs, and protection from further UK lifetime allowance charges.  But pension rules frequently change so you need to keep up-to-date, and in any case always take regulated, specialist advice before making pension decisions to protect your benefits and establish the best option for you.

 Keep an eye on the UK’s lifetime allowance (LTA). The UK caps how much you can hold in combined pension benefits (excluding State Pension) without paying extra tax. Once your funds exceed the limit, you pay a tax charge whenever you access your money – 55% for lump sums or 25% for income or transfers to an overseas pension.  This also applies to non-UK residents.

Retiring in France

If you plan to retire in France, review your retirement strategy early. You need to consider your residence status and cross-border tax implications and adapt your estate planning to suit France’s different succession rules. 

Careful planning is the key to minimising taxation and maximising the available opportunities so you can enjoy your dream retirement for as long as you need. For the best results, take specialist, cross-border advice.

All advice received from any Blevins Franks firm is personalised and provided in writing. This article however, should not be construed as providing any personalised taxation and/or investment 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

Blevins Franks Financial Tips - How Does Inflation Impact Your Retirement Savings?

With inflation surging in both the EU and the UK, now is the time to review your savings and investments to establish if they are suitably structured to provide protection from this threat. Even low levels of inflation can erode your spending power over time and retirees need to plan for this.  

“Inflation is when you pay fifteen dollars for the ten-dollar haircut you used to get for five dollars when you had hair”. 

This quote by American author and humorist Sam Ewing may make you smile, but it is a good example of the impact of inflation over the passage of time and underlines a serious threat to our long-term financial security.

Ronald Reagan used a more hard-hitting description: 
“Inflation is as violent as a mugger, as frightening as an armed robber and as deadly as a hit man”.  

Many people do not realise how damaging inflation is to their wealth over the longer term; it is easy to become complacent after years of low levels. But it is surging in many countries, causing concern among savers and retirees. In fact, you should always take inflation seriously as even low levels impact your wealth and retirement income over time – you may not notice the effects each year until it is too late.  

The impact of inflation 

You cannot just consider inflation rates on their own, you need to compare them to your earnings. If your savings generate a lower return than inflation, the real value of your money is falling and your income will buy less than it used to. 

Put very simply, and ignoring the impact of compounding, if your bank account pays 1% interest but inflation is 2%, after 10 years you will have 10% more money, but the goods and services you purchase will cost 20% more. In real terms you’ll effectively be 10% poorer.  The more time passes, the more damaging it is. 

Official Consumer Price Index (CPI) figures are based on a basket of goods containing a representative selection of items for people across all ages and incomes. It rarely reflects our own personal inflation rate.  As an illustration, a personal annual rate of 4% would reduce the spending power of 100,000 (Euros or Pounds) to around 67,000 after 10 years.  After 20 years it will have lost around 55% of its value and after 30 years your 100,000 would have the purchasing power of around 30,000 today.  

Inflation in Eurozone and France 

Across the Eurozone, the annual inflation rate reached a record 5.0% in December 2021, up from 4.9% in November. A year earlier, the rate was -0.3%. For the EU as a whole it was 5.3%.  The highest contribution to the annual euro area inflation rate came from energy, followed by services, non-energy industrial goods and food, alcohol & tobacco.

France tends to have lower inflation than the EU average and was 3.4% in December 2021.  A year previously it was 0%, but it first hit over 2% in August and has been slowly climbing since, with its Harmonised Index of Consumer Prices reaching 3.4% in November 2021 and maintaining the same rate in December. 

The biggest culprits were energy and petroleum products, but food prices have also seen a sharp increase year on year. 

UK inflation

In the UK CPI reached 5.4% in December 2021, the highest rate for almost 30 years. A year previously it was 0.3%.

In comparison, the Bank of England’s main interest rate was just 0.25% in December, an increase from November’s 0.1%.  It has been below 1% since March 2009.

Will inflation remain high?

Many of the factors behind the current surge are related to the pandemic and expected to be temporary. 

As economies opened unevenly after lockdowns, companies have been struggling to keep up with rapidly rising demand as they rebuild their supply chains.  Shortages of many goods like computer chips and building materials have pushed prices up. 

In addition, electricity prices rose sharply, hitting us both directly and indirectly as businesses pass on costs to customers. 

The Bank of England expects inflation could reach about 6% by spring 2022, but then start to come down. It warns, however, that some prices may remain higher than in the past. 

The European Central Bank also expects inflation to reduce over 2022 as supply gradually catches up with demand, but warns that as the pandemic is unprecedented in modern times this recovery may be different.

One particular uncertainty is wages. Prices and wages influence each other - if wages rise to compensate for higher costs of living, companies may recoup this expense by putting their prices up, so this an area to watch.

Protecting your retirement savings

Hopefully inflation will soon fall back to comfortable levels but, as mentioned earlier, even low levels will affect you by eroding your spending power year after year.  You always need to plan to protect your savings from inflation.

To generate returns that outstrip inflation, you need to invest in assets that historically generate returns in excess of inflation over time. Reduce risk to your capital by working with a wealth management adviser to follow a disciplined investment process:

·      Establish your goals and time horizon.

·      Determine your attitude to risk – your adviser should take you through a suitability process to calculate this objectively.

·      Construct a suitable, well-diversified portfolio to achieve your investment plan and objectives. 

·      Use quality investment managers.

·      Review your portfolio annually to keep it on track.

·      Be patient and stick with your plan – it is time in the market, not timing the market, that is likely to help you achieve your longer-term goals.

If you already have investments but without a carefully designed strategy tailored to your particular situation and appetite for risk, or have not reviewed them recently, look at your financial affairs to confirm if they are suitably structured to provide protection from potential future threats like inflation and taxation.

You need a tax informed investment strategy with the potential to provide capital growth higher than inflation and where your money is legitimately protected from unnecessary taxation. This can be achieved with a diversified investment portfolio, based on your objectives, circumstances and risk profile, held within a tax-efficient arrangement which is compliant in France.

CPI data is based on figures available on 20 January 2022. All advice received from Blevins Franks is personalised and provided in writing. This article, however, should not be construed as providing any personalised taxation or investment advice.

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

Le Marquis St Tropez Offers The Blue Monkey for Rental - Located in the Heart of St Tropez

The Blue Monkey. An elegant apartment with dining terrace, overlooking the Marina and bay, situated in one of the most convenient parts of the St Tropez peninsula.

This is a luminous recently refurbished apartment with spectacular views of the marina, and through to the bay of St Tropez, with easy access to St Tropez, to Pampelonne Beach, and to the villages of Ramatuelle, Gassin and Grimaud.

Situated on the first floor with lift access, the entrance opens onto an open plan living room with doors to the terrace, a covered dining terrace with olive tree. Fully equipped open plan kitchen with breakfast bar: oven, micro wave, dishwasher and DeLonghi capuccino and espresso machine. Separate WC. Shower with double basin, and clothes washing machine. Double bedroom with small terrace. With its proximity to the water, and with terraces at both sides the apartment stays cool even on the hottest days.

Also possible to reach St Tropez by Bateau Verts to save parking problems on market days: 20 minutes across the bay, every half an hour in the summer. The apartments in the marina are protected by 24 hour security service, and have access to tennis courts, swimming pool and beach, all at walking distance from the apartment. Restaurants, shops and supermarket are all a few minutes walk, as well as a Covid test centre.

Original paintings from local artist, Annick Mckenzie, “Les Tois de St Tropez” by Dominique dall’Agnoll ” and limited edition Louis Icart prints and Cannes Film Festival posters adorn the walls. The “Amsterdam” leather chair in the living room is the same chair design that was featured in James Bond’s London  apartment in the film “Spectre”, and comes from the same designer.

Link to more information

Blevins Franks Financial Tips - UK Based Financial Advice and Services Post Brexit - Four Important Considerations

As we move towards the end of 2021,Brexit is no longer a novelty, but we are still learning exactly how we are or may be affected.  While in many ways day-to-day life hasn’t changed for British expatriates, there are some inconveniences – some minor, some not so minor. 

One Brexit consequence that is causing concern and difficulties for many UK nationals in France, is financial advice and services – we are receiving a lot of questions about it. 

The Brexit trade deal did not cover financial services, which meant the previous ‘passporting’ regime came to an end on 31 December 2020.   While post-Brexit negotiations could change things in the future, you do need to establish if your financial planning – and adviser – will stand up to the challenges that Brexit brings today. Here are four key considerations.

1.     The end of passporting

If you have a good relationship with your UK-based financial adviser, you may understandably wish to continue using them, despite now living in a different country. However, you need to make sure they can legally continue to advise you now that the UK is no longer an EU member state. 

Until the end of 2020, UK-based financial businesses could ‘passport’ out of the UK and into Europe – but since 1 January 2021, this no longer applies.  

‘Passporting’ enables cross-border transactions between EU member states through shared financial regulation. It was previously possible because the UK Financial Conduct Authority (FCA) was bound by the same rules and standards as other regulators in the EU. Now the UK has left the EU, the regulation of financial activity and consumer protection no longer lines up on both sides. So, unless a mutual deal is agreed on financial services in future, the EU no longer permits ongoing passporting arrangements for UK financial businesses and advisers.

Some UK financial firms have put arrangements in place to be able to continue working in an EU country post-Brexit, but others have not. Many expatriates with EU residential addresses have received letters from UK banks, financial advisers and investment institutions advising that they can no longer support them.   

2.     The limits of UK advice

If you still retain UK investments, a UK-based adviser may be able to continue supporting you there. But if you hold savings and investments with an EU-based institution, they may no longer accept instructions, such as top-ups, from a UK adviser. The financial regulator in France, for example, had confirmed it would be illegal for French banks and insurance firms to do business with a provider who is not authorised in the country post-Brexit. Similarly, while the Central Bank of Ireland enabled a three-year grace period for servicing existing insurance contracts, it will not allow unregulated entities to renew or create new policies from 2021.

We can expect similar positions to be taken by other EU regulators seeking to protect consumers in their country, so this could limit the planning opportunities for expatriates using UK-based advisers.

Also, check if there are any practical challenges to keeping a UK-based adviser. Do you have to travel to the UK for meetings and paperwork requirements? Consider how this would work in situations where you need funds quickly or are unable to travel through illness or travel restrictions.

3.     The advantages of local knowledge

As well as the legal and practical implications, consider whether an adviser based in a different country is best placed to help you take advantage of opportunities available to you in France. For example:

·      Do they fully understand the intricacies of the French tax regime and how it interacts with UK taxation?

·      Do they have in-depth knowledge of the French residence, domicile, tax, succession law and reporting rules?

·      Do they know about – and have access to – tax-efficient solutions that offer significant benefits to France residents?

·      Who will pay the bill or face the consequences if they get things wrong?

While UK-based advisers may be experts on the ins and outs of the UK system for residents there, it is unlikely that they have the same in-depth knowledge for another country. 

4.     The suitability of UK planning

Remember: financial planning that is tailored for a UK resident is unlikely to remain suitable once you become resident elsewhere. If you have not yet moved to France, review your arrangements before you do to minimise taxation when changing residency and make the most of tax-efficient opportunities in France.

If you are holding on to UK savings and investments, beware that they can lose their tax benefits once you are living abroad. And once they cease to be EU/EEA assets and you are no longer a UK resident, they could potentially attract a higher tax bill, in either or even both countries. 

Meanwhile, France residents have access to locally-compliant alternatives that can offer other advantages besides tax-efficiency – such as multi-currency and estate planning flexibility – so explore your options. Depending on your circumstances, many British expatriates in France have found that reviewing and adjusting how and where they hold their capital has significantly improved their tax position. 

It has never been more important to ensure your financial affairs are both compliant and suitable for your life in France. Secure financial peace of mind by talking to an experienced, locally-based adviser.

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

Blevins Franks Financial Advice - Tax Efficient Investing in France - the Benefits of Assurance-Vie

When you look at the headline rates of tax in France, you can understand why many people consider France to be an expensive country to live in, tax-wise.  What they often do not realise, however, is that they may be able to take advantage of compliant opportunities to protect their assets from various French taxes – so much so they may even end up paying less tax in France than in countries like the UK.  With the right structures in place, you could significantly lower your tax bill.  

What was tax efficient in the UK is generally not tax efficient in France.  For example, ISAs and Premium Bonds are taxable in France. 

One very useful arrangement for lowering French tax on your investment income is the assurance-vie.  This specialised form of life assurance allows you to hold a wide range of investment assets and is highly tax efficient for residents of France, especially if you hold your policy for over eight years.  

Both French nationals and expatriates find assurance-vie to be very valuable for providing tax-efficient income (particularly useful in retirement) while also protecting their wealth for their loved ones. 

French tax benefits of assurance-vie

1.     Income and gains can roll up tax-free within the policy

2.     Withdrawals are taxed very favourably

3.     Substantial allowance from year 9

4.     Succession tax savings for your heirs 

5.     Wide range of investment options 

6.     Consolidation of investments in one policy

7.     Estate planning benefits

1) Income and gains

 If you do not take any withdrawals, there is no income or capital gains tax to pay, regardless of how much the capital has grown or how much interest has been earned within the policy. 
 

2) How withdrawals are taxed

When you take withdrawals, they are taxed very favourably.  Only the growth element is taxed, rather than the whole withdrawal.  For example, if the whole portfolio of assets within your assurance-vie has grown by 7%, and you are taking a withdrawal of €25,000, you only pay tax on €1,750 and €23,250 is tax free!   

For new policies set up after 27 September 2017, the tax rate on withdrawals is 30% (the standard tax rate on investment income).  This includes both 12.8% income tax and 17.2% social charges.  The income tax rate is lowered to 7.5% for income from contracts which are more than eight years old and relate to contributions not exceeding €150,000. You can also elect to pay the scale rates of income tax instead, which can work out cheaper even with social charges.  

Note that the 30% fixed rate only applies if your policy is approved for French tax purposes. If you have a non-EU assurance-vie you will pay the scale rates of income tax plus 17.2% social charges, regardless of your premium.  Policies from companies in the Isle of Man, Channel Islands – and now also the UK – are therefore at a disadvantage. 

3) Annual €4,600 tax-free allowance

Once you have owned your policy for over eight years, your first €4,600 –  €9,200 for a married couple – of growth withdrawn every year can be tax-free. This doesn’t apply to social charges but is still a very favourable tax break.  

4) Reducing succession tax

An assurance-vie could also help lower your succession tax liability.  

In particular, considerable tax savings can be made if the policy was established with lives assured under age 70.  Each individual beneficiary will receive a €152,500 exemption, after which they pay a flat tax rate of 20% (when the taxable part of the assurance-vie is under €700,000) and 31.25% on any excess over €700,000. 

If you are over 70 when you set up your policy, your heirs are still better off with your assurance-vie as, although they pay the usual succession tax rates, they receive a €30,500 allowance. 

5-7) Other assurance-vie benefits

 Depending on your policy, you can usually hold a wide range of investment options within your assurance-vie, with flexible currency options. 

You can bring many different investments together under one roof making it easier to manage, and combine your tax and investment planning in one exercise.  

Purchases and sales within the policy are normally transacted at little or no cost, so you can change your investments as your circumstances change without incurring extra costs.  

Investments within an assurance-vie can also be easier to distribute to your nominated heirs on your death, making their life easier. 

It is important to note that there are different types of assurance-vie policies available, and you need to make sure you choose the one that will provide the advantages you are looking for.  Tax rules and rates in France also change frequently so your adviser needs to be up-to-date on the latest regulations in France and what actually works for British expatriates living here.  

Finally, your tax and investment planning should be based around your situation, objectives and estate plans, so it is essential to take personalised advice.

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 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

Blevins Franks Financial Tips - Key Elements for Successful Investing – Creating and Protecting Wealth

What do you need to think about when it comes to creating and protecting your wealth as a French resident?

Drawing the analogy between investment planning and gardening may bring a clearer understanding of the important factors to consider, particularly when you have moved from the UK to France – not everything you have previously planted is the best for current circumstances.  

Investment through the various stages of your life has seasons, as does gardening.   What you successfully planted and grew in the UK may be entirely wrong for France. You have to consider your new, often very different conditions if you are to get your plants to flourish and achieve the results you are looking for.  You then need to carry out regular ‘weeding’ to ensure the long-term growth of the plants you wish to develop and sustain for the future.  

This is all a careful process and often involves professional guidance. A locally based adviser who understands and has years of experience dealing with the local conditions will give you the best results. 

In our view, these are the key aspects that you need to address to ensure you obtain the optimum investment portfolio to suit your particular situation:

Tax and succession considerations - choosing the right tax-efficient structure

A tax-efficient structure, such as an ISA or pension plan in the UK, can keep most of your investments in one place and help you legitimately avoid paying too much tax. You want to ensure as much of your hard-earned wealth as possible is placed in the most suitable structure to limit your tax liabilities. At the same time, consider your estate planning wishes so your investment capital can be passed to your chosen heirs as easily and tax efficiently as possible. 

That was perhaps easier to achieve in the UK where we are accustomed to the rules, but here in France with its complex tax and succession regimes and various reforms over the years, it is sensible to take advice from someone who is well-versed in the nuances of the French systems and how they impact your wealth. 

In France, UK ISA accounts are not tax-efficient and the income and gains generated are fully taxable here as investment income – you will currently pay 30% which covers both income tax and social charges. 

There are, however, compliant arrangements available in France, for example, assurance vie, that provide significant tax advantages as well as estate planning benefits.  There are various assurance vie available though, so you need to choose the most suitable for your circumstances and objectives. 

Establishing your risk profile and optimum portfolio

Most of us recognise that for some of our assets, exposure to market movements gives us a better chance of outperforming inflation and producing real returns over the medium to long term. 

However, the starting point has to be to obtain a clear and objective assessment of your appetite for risk. These days there are some very sophisticated ways of evaluating your risk appetite, involving a combination of psychometric assessments and consideration of your investment aims and other assets.  Since this is an emotional issue, you will benefit from third party professional, objective guidance here.

The key is then ensuring your investment portfolio matches your attitude to risk.  Without such a sound assessment being then matched to the optimum blend of investments, you could find yourself with a portfolio that is too risky or too cautious for you.

Another important initial step in ensuring your portfolio is suitable for you is to establish your objectives. Are you looking for income, growth or a combination of the two? What is your investment time horizon?  Your adviser should help you build a portfolio based on both your risk profile and objectives.

Diversify, diversify, diversify

The higher your concentration in one particular investment type or area, the greater the risk. By spreading across different asset types (such as equities, bonds, property, cash) and then across sectors, geographical regions and companies, you give your portfolio the chance to produce positive returns over time without being vulnerable to any single area or stock under-performing.

You can take diversification further by utilising a 'multi-manager' approach to spread your investments out among several carefully-selected fund managers. This reduces your reliance on any one manager making the right decisions in all market conditions.

Regular reviews 

You should then review your portfolio, usually once a year.  As asset values rise and fall, your portfolio can shift away from the one designed to match your risk profile and objectives.  You may need to make adjustments to re-establish your weightings. With today’s challenging and changing climate, reviews are even more important to help control risk and encourage a positive effect on portfolio performance. 

You also need to consider any changes in your personal circumstances, as well as to tax and succession regulations – particularly in France where the annual budgets can introduce significant tax reforms.

Your investment adviser

Choosing your adviser is another key element of successful wealth management. If you are still using a UK-based adviser there are two issues to consider.

Are your financial arrangements tailored for your life in France or are they actually better suited to a UK resident? 

Brexit dissolved automatic ‘passporting’ rights for UK financial services in the EU, so unless they have made other arrangements, UK advisers, banks and financial providers may no longer able to legally service French residents. If you have UK bank accounts or investments, you may be restricted from making changes, such as moving funds or applying for new services, or they may be closed altogether. 

To bring all these guidelines together, take personalised, quality advice from a regulated, locally-based adviser. With the right strategy in place for your life in France, you can help protect and grow your wealth in real terms – not only during your lifetime but for the next generations to enjoy.

This article should not be construed as providing any personalised investment or taxation advice. Summarised tax information is based upon our understanding of current laws and practices which may change. 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

Investment Tips with Corporate Partner Blevins Frank - Why Chasing Star Performers Won’t Guarantee Investment Success

While it may be tempting to choose investments based on past performance, this tactic rarely works in the long term. So how can you put your best foot forward as an investor?

Reading about investing, you will usually find the disclaimer ‘past performance is no indicator of future performance’. While this may seem like a standard get-out clause inserted by lawyers, it serves as an important reminder that nothing is certain in the world of investment.

There is a reason we aren’t all making millions on the stock markets! Financial markets are complicated and unpredictable, with no formula you can follow to ensure you will strike big, or even get out more than you put in. It is important for private investors to carefully manage risk, as investment success often comes down to the sheer luck of being in the right place at the right time.

Given this element of chance, it is important not to get swayed by the latest trend and chase good performance. History repeatedly shows that the best performer one year could be amongst the worst the following year. 

Asset class performance

There have been many examples of ‘star’ assets that have soared before dramatically crashing back to earth. The dot.com bubble famously saw US technology stocks in the Nasdaq Index rise five-fold in the late 1990s before falling 77% in 2002, wiping out billions of dollars. Just recently we have witnessed the less dramatic, but nonetheless volatile, fortunes of bitcoin and other cryptocurrencies change rapidly. 

Essentially, there is little long-term benefit in only picking the latest top-performing asset. If you look at which asset type generated the most returns during a year, you would likely see a different star each month. Take 2019 – the year started with North American equities leading the way, only to move over for UK stocks the next month, then European shares before property took the spotlight. May saw Japanese equities ahead, followed by emerging markets, then Asia-Pacific stocks. UK bonds in varying forms took over for the next four months, before the year ended with cash in the lead. 

Over the ten-year period from 2010, no two years followed the same pattern, and one asset class rarely spent more than one month at the top. Without a crystal ball or a time machine, you could not have picked the right winners every time.    

Fund manager performance 

The same is true of ‘star’ fund managers. With hundreds of funds available from different managers, it can be difficult to know where to turn. While many of them seem to offer similar investment opportunities, the difference in performance can be significant… but often temporary.

Let’s say you had invested £10,000 in a UK-listed shares fund over the ten-year period starting 1 January 2010. If you happened to be in the best performing fund over that period, you would have made a net profit of 440%. Meanwhile, investing in the lowest performing fund would have brought a much reduced profit of 49%. Similarly, the best-performing property fund over that period would have returned profits of 227% versus 72% from the lowest.

On the face of it, it looks like you should just pick the best performing fund. But again, choosing a previously successful fund manager is no way to guarantee ongoing top performance. Statistics illustrate how the performance of the top 25% of fund managers tends to weaken over time. Of the 56 managers in the top quarter of performers in 2015, for instance, only four remained the next year. 

A sensible investment approach

So how can you improve your chances of investment success? There are some key principles you can follow to help manage risk and reach your financial goals.

Diversification is crucial. Spreading your investments across multiple areas is the optimal strategy for minimising risk. This should include a range of different asset classes (shares, bonds, cash, property) as well as geographical regions and market sectors. Diversifying in this way gives your portfolio the chance to produce positive returns over time without being vulnerable to any single area or stock under-performing. You can diversify further using a dynamic ‘multi-manager’ approach, which reduces reliance on any one manager making the right decisions in all market conditions.

It is also important to think long term and have patience when investing. As we have seen, chasing good, quick returns rarely succeeds in the long run. Likewise, exiting a market when it dips would lock in your losses and make you miss any rebounds when markets recover. Research shows that ‘time in’ the market – staying fully invested – is a more successful strategy for investors than trying to ‘time’ the market.

Ultimately, of course, you need to make sure your portfolio is matched to your personal situation, income requirements, goals and timeline, alongside your appetite for risk. This is best assessed objectively by an experienced professional who can then build a diversified portfolio with the right balance of risk/return for your peace of mind. 

For the best results, talk to a locally based adviser with cross-border experience who can bring all the principles together while ensuring your arrangements are structured as tax-efficiently as possible for your life in France. 

All advice received from Blevins Franks is personalised and provided in writing. This article, however, should not be construed as providing any personalised taxation or investment 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. 

Declaring Your Income Tax in France - Deadlines And General Advice From Our Corporate Partner Blevins Franks

Income tax return time in France 2021

By Rob Kay, Senior Partner, Blevins Franks 

For those of you who were a resident of France in 2020, it is now time for the annual tax return for income and gains made during the calendar year 2020.

 For those who arrived in France from the UK during last year, you will, in theory, be declaring your income and gains from your date of arrival in France until 31st December 2020.

You are taxed as a ‘household in France, so a married couple is taxed together, for instance.

In France, income tax declarations generally need to be submitted around the end of May/beginning of June, with the dates varying slightly each year.  The online portal for 2021 opened on 8th April and the submission dates have been published.  

Deadlines dates for online and paper declarations

Everyone should now file their income tax return online, on the government portal  www.impots.gouv.fr, unless you have a genuine reason for not being able to do so.  

The dates for online declarations vary according to which department you live in:

01-19
Midnight Wednesday 26 May

20-54
Midnight Tuesday 1 June

55-976
Midnight Tuesday 8 June

Non-residents
Midnight Wednesday 26 May

IIf you have no internet connection or struggle with online forms due to age or a disability, you can submit a paper return. Paper returns can be obtained from your local tax office or downloaded from the ‘impôts’ website, once available.

Moreover, for those of you who are submitting your first return, you may not have received the necessary codes to be able to set up your ‘personal space’ on the tax portal. You can go on the website www.impots.gouv.fr and on the ‘espace particulier’ page to get your login code and your tax number if you don’t have one. You can also contact your relevant ‘service des impots’ to obtain your tax number.  If you cannot make on online declaration, your first return will have to be in paper form.

The deadline for paper returns is earlier than online returns, on Thursday 20th May (for both residents and non-residents).  It is the date of the postmark on the envelope which is used to verify whether you have submitted on time! If you submitted an online return last year, you will no longer receive a paper one in the post.

The big difference this year is that a large number of taxpayers will not have to complete a declaration at all, unless their situation has changed since last year.

However, normally only those who only receive French salaries or pensions are exempted from completing a return. Anyone with income from abroad will almost certainly have to continue to file every year.

Income tax rates

Income tax is payable on earnings, pensions and rental income, and you are taxed as a household rather than an individual – the parts familiales system, which can prove beneficial. 

Taxes are declared in arrears, so your 2021 return needs to report the income you earned last year. The tax rates for 2020 income are:

Up to €10,084 – 0%
€10,085 to €25,710 – 11%
€25,711to €73,516 – 30%
€72,517 to €158,122 – 41%
Over €158,122 – 45%

There is an additional 3% for a single person where income is between €250,000 and €500,000 per part (nothing is due from a family) and 4% for income exceeding €500,000 per part for an individual, reduced to 3% for a family (up to a limit).   

Various deductions are available, so make sure you are using all the ones you are entitled to.

Tax on investment income – the Prélèvement Forfaitaire Unique (PFU)

Investment income, such as interest, dividends, capital gains and gains from life insurance policies/non-French assurance-vie, is currently taxed at a fixed rate of 30% rather than the scale rates of income tax.  This includes both tax and social charges, so it is beneficial for those with higher investment income.  

Households in low-income brackets can opt for the progressive income tax rates (plus social charges) so they are not taxed more under this system. 

Unless you are a low-income household, you need to declare interest or dividends received from abroad within 15 days of the month end and pay the 30% tax. This is then offset against the tax due on your tax return.  

What you need to declare 

French tax residents are liable to French income tax on their worldwide income and gains, so you need to declare all income you earn in the UK and anywhere else outside France, whether it is pension, rental or investment income. 

You will not, however, pay tax twice on income that is taxable in the UK. Under the terms of the France-UK double taxation treaty, UK government service pension and rental income are only taxable in the UK. However this does not mean that you do not declare it in France – you must include it on your French tax return. You will then receive a credit equal to the French income tax and social charges.

Real estate gains are liable to tax in both countries, but you receive a credit in France for UK tax paid.   Gains made on the disposal of capital investments are generally taxed in the country where the seller is resident.  

Remember that if you are resident in France you are also obliged to declare all your foreign bank accounts and non-French life insurance policies, even if you do not earn an income and/or they are dormant. This is done when you submit your annual tax return, using a separate form.  The penalties for failing to declare accounts were increased in 2018, so don’t forget about any old accounts. 

Non-residents of France need to submit a tax return listing all income earned in France (eg, rental income). 

Social charges

Social charges are paid on top of income tax, and for 2020 income generally range from 9.1% to 17.2% depending on the type of income.  

They are usually calculated based on the income declared in your income tax return and the authorities will send notification of the amount payable in the autumn, along with your income tax assessment.  

Exchange rate

When converting your regular Sterling 2020 income (such as pensions for instance) to Euros for your tax return, you can use the rate from the Banque de France, which is £1 = €1.125. 

This article is a brief summary covering the basic elements of income tax in France.  It is important to seek personalised, professional advice. For questions about completing your tax return, speak to your local tax accountant. 

If you have any general questions about taxation in France and how you may be able to lower your tax liabilities, please do not hesitate to contact Blevins Franks.  Our advisers are cross-border tax and wealth management specialists with in-depth knowledge of the French tax regime and the compliant tax planning opportunities available here.

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 is advised to 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). This promotion has been approved and issued by BFWML.

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

The Latest 2021 UK Budget - What Are The Implications For Expatriates?

While there was little in the way of immediate changes in the latest UK Budget, the freezing of some allowances is set to increase tax bills in the long run. 

This year’s UK Budget predictably focused on ongoing pandemic support, bringing very few changes to personal taxes. Chancellor Rishi Sunak did, however, introduce some longer-term measures to collect more tax by freezing the main allowances and exemptions for the next five years. 

According to the Office for Budget Responsibility (OBR), the overall impact of these measures will be that the UK’s tax burden will rise to its highest level since the 1960s! 

So what changes in April may affect UK nationals living in France, and what can you do to minimise any negative impact?

Income tax

UK taxpayers (including non-UK residents) see a slight increase to the personal income tax allowance thresholds at each end: £12,570 at the basic 20% tax band and £50,270 at the higher 40% rate. However, these will be frozen until at least April 2026. 

This is estimated to bring 1.3 million more people into income tax liability, with one million more paying the higher tax rate, altogether netting an extra £8 billion in the 2025/6 tax year. 

Savings and investments

The band of UK savings income that can be earned tax-free stays at £5,000 and the annual ISA subscription limit at £20,000 (£9,000 for a Junior ISA). 

The dividend allowance remains at £2,000.

Remember: investments like ISAs may become taxable in France once you are non-UK resident. Take time to explore alternative arrangements that may be more tax efficient and better suit your circumstances, goals and risk appetite.

Capital gains tax (CGT)

As with income tax, the annual allowance will be frozen for the next five years. Unlike income tax, the CGT allowance does not increase, staying at its current level of £12,300 for individuals (£6,150 for most trusts). 

Despite expectations that CGT rates would be aligned with income tax rates, there is no change here, so rates remain between 10% and 28%.

Don’t forget that, in recent years, non-UK residents became liable for capital gains tax on most UK property and land.

Pensions

Annual allowance: This remains at £40,000 – as it has been since 2016 – and starts reducing once ‘adjusted income’ reaches £240,000.

Lifetime allowance (LTA) – This will not increase with inflation as planned so remains at £1,073,100, where it sticks until at least 2026. 

If your combined UK pension benefits are near the LTA threshold, you need to consider the potential impact of future growth. If investment markets recover in line with the Chancellor’s forecast that the economy will return to pre-pandemic levels by mid-2022, this could bring many more pension funds within the scope of the LTA’s 25% or 55% penalties. The Treasury expects to collect an extra £250 million as a result.

QROPS – There were no changes to Qualifying Recognised Overseas Pension Schemes, with transfers to EU/EEA-based QROPS still tax-free for EU residents. The 25% ‘overseas transfer charge’ continues to only apply to transfers outside the EU/EEA. But now the UK has left the bloc, this could potentially be extended to capture EU transfers in future. 

Once in a QROPS, UK pension funds become immune to LTA penalties and future changes to UK pension rules while unlocking other benefits, so carefully consider your options here. 

Inheritance tax

Despite much anticipation that this year could see inheritance tax changes, again the only action was freezing the exemptions, allowances and reliefs for the next five years.

The tax-free ‘nil rate band’ allowance stays at £325,000 per person (unchanged since 2009!) The residential nil rate band (RNRB) – which provides extra tax relief when passing on a main home (including overseas) to direct descendants – remains at £175,000 per person.

The Treasury collected £5.2 billion in inheritance taxes in the 2019/20 tax year. With these latest freezes, they expect to generate an additional £15 million next year, increasing to £445 million by 2026.

What can you do to minimise the impact?

Although this new tax year brings relatively few changes, there are longer term implications. The Chancellor’s strategy of freezing allowances, exemptions and reliefs is clearly designed to raise more tax revenue as people’s income, capital gains, and asset values grow. Taxpayers may also feel the pinch as the cost of living increases over time. 

Wherever possible, you should make full use of the available allowances each year to help minimise your tax bill. However, no one action in isolation will make a substantial difference. You need to make sure your overall financial arrangements are structured as tax efficiently as possible for your life in France to help minimise exposure for you and your heirs. 

As always, subsequent Budgets can change the current trajectory by introducing new taxes with little notice, but this is especially likely as the economy picks up and the government looks to recoup its pandemic spending.  

This is a good prompt to think ahead and review your tax planning to check you are making the most of all the available tax-efficient opportunities, in the UK and your country of residence. For the best results, take personalised advice from a cross-border specialist with understanding of both the UK and French tax regimes.

Rob Kay, Senior Partner, Blevins Franks

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

EU Post Brexit - Why It’s Time To 'Think Local' For Your Financial Planning In France

Now that Brexit is here, EU-resident Britons with UK bank accounts, investments or a UK-based financial adviser may see accounts closed or face restrictions. In these times of widespread restrictions and lockdowns, our worlds have become a lot smaller. Whether this will have a long-term effect on your travel, lifestyle and shopping habits will be a personal matter. But with Brexit now in full flow, UK nationals living in France have good reason to permanently ‘think local’ when it comes to financial arrangements. 

Just as UK citizens lost automatic EU freedom of movement when Brexit took effect on 1 January, many UK financial businesses lost the right to provide banking and investment services within the EU. If you are resident in France but still use a UK bank account, other financial products or a UK-based financial adviser, make sure you check where you – and your money – stand.

UK financial services and Brexit 
Before Brexit, UK firms providing financial services to Britons living in the EU could legally do so through ‘passporting’ arrangements. This meant UK providers – enforced by the Financial Conduct Authority (FCA) – were committed to meet the same minimum standards and consumer protections for EU residents as other EU states. 

But now that the UK (and the FCA) are free to make their own rules, the EU has no assurance that UK firms will meet their requirements. Consequently, on 1 January, the EU withdrew passporting rights for UK firms ­– including banks, insurance companies, investment providers and financial advisers. Now, some could even be breaking the law by working with EU residents.  

Does this affect all UK financial firms?
This depends on various factors, including how a company is structured and where it is based. Those with headquarters in an EU country, for example, can retain their passporting licence and continue operating as before. 

However, wholly UK-based firms who want to support EU-resident clients will likely need to restructure and form agreements with the financial regulators for each EU/EEA country they operate in. This is a highly complex, expensive and time-consuming process, so not a cost-effective option for all.

Negotiations on financial services are ongoing, so it is possible that the UK and EU may still reach an arrangement in this area. Some companies may be holding out for this before going through the potentially unnecessary expense of restructuring. Others have already withdrawn from EU markets. 

Some major UK banks have informed EU-based clients that they cannot provide services for them post-Brexit and closed their accounts. Other providers have kept accounts/policies open but suspended activity, or are allowing them to run until the end of their term.  

How might this affect you? 
If you hold a British bank account, insurance policy, investment or other financial product and your provider hasn’t contacted you about limited services, ask them what arrangements they have in place for France. 

If your account has not been closed, has it been frozen? In some cases, while you may be able to retain existing accounts and make withdrawals as an EU resident, you may be restricted from adding or moving funds or renewing policies. You may also be unable to apply for new services, such as term deposits, bonds, foreign currency management, loans, credit cards and mortgages. 

If you still use a UK-based financial adviser, check they have the authority to continue supporting you as a French resident. Besides the legal implications – and whether you are protected if things go wrong – some financial institutions have stopped accepting instructions from UK-based (unregulated) providers. So if you hold EU-based investments, your planning options may be significantly limited with a UK adviser. 

Post-Brexit financial planning for France
Even if the financial services issue does not affect you, there are other key benefits to thinking more local for your finances. 

Still holding on to UK savings and investments? Now that UK assets are no longer EU/EEA assets, they could potentially attract a higher tax bill within the EU. ISAs are also taxable in France for non-UK residents. Own UK property? Remember: EU residents are still in the firing line for UK stamp duty and capital gains tax.

Meanwhile, French residents have access to opportunities that can offer better tax-efficiency and other potential benefits, so make sure you review your options.

What about UK pensions? This is not so straightforward. You may be better off leaving them in the UK and drawing income as needed in France. However, while Brexit does not affect the ability to receive UK pension income into an EU account, it will always be paid in sterling, so the value could be adversely affected by exchange rates and conversion costs. Explore whether it may be more beneficial for you to transfer funds out of the UK into a tax-efficient structure for France. Doing so could also unlock currency flexibility and estate planning benefits, but be sure to take specialist, regulated advice to do what’s right for you.

With Brexit bringing such a seismic shift in the landscape, it has never been more important to ensure your financial arrangements are compliant and suitable for your life in France. A specialist, locally-based adviser is best placed to help you take advantage of suitable opportunities here and secure financial peace of mind for you and your family.

Blevins Franks is fully authorised to provide advice in France.  Our financial advisers live and work locally and have in-depth knowledge of the local tax and succession regimes and common issues faced by UK expatriates. Contact us to discuss how we can help you with your investments, pensions and cross-border tax and estate planning.

By Rob Kay, Senior Partner, Blevins Franks

Blevins Franks accepts no liability for any loss resulting from any action or inaction or omission as a result of reading this article, which is general in nature and not specific to your circumstances.

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

Planning for Retirement - It Is Never Too Early To Start Thinking About How You Will Finance Your Golden Years

Whether you are nearing retirement or it is several years away, it is never too early to start thinking about how you will finance your golden years. Even if you are already retired, you should regularly review your arrangements to ensure you continue meeting your retirement goals. It might be that you enjoy spending time in France or Monaco and would like to retire in the sun, now or a few years down the line. Or maybe you are already living here and are unsure what your options are. Whatever your situation, what do you need to think about to secure the retirement of your choice?

Why retirement planning matters at any age 
By Rob Kay, Senior Partner, Blevins Franks

Approaching retirement

Even if retirement is a way off, there are certain things you need to consider – the earlier the better – to make sure you are on the right track financially. There may be steps you can take today to help make your dream retirement a reality.

Questions you should ask include: 

·      Will I be able to afford to retire when I want to?

·      What is the best strategy for withdrawing from my business or employment?

·      What options do I have for my pensions? Are they likely to change?

·      Will I be able to retain my existing wealth and assets?

·      Do I want to spend some or all of my retirement abroad?

Let’s say that you plan to retire within the next five years and move permanently to France. You may have concerns about whether you can afford your preferred lifestyle without having to sell existing assets. You may not want to have to downsize your home, for instance, as you would like this to eventually pass on to your family. Perhaps you have a business to sell and are unsure how best to convert your years of hard work into a retirement nest egg. Then there are the complex residence and tax implications of living in a different country.

Here, professional financial advice can prove invaluable. An adviser can take a holistic view of what you have– your savings, investments, assets, pensions – together with what you want – your timeline, income requirements, legacy wishes – and an objective assessment of who you are – your circumstances, goals, risk appetite – to design a personalised retirement plan for you. 

Already retired

If you have already reached retirement age or stopped working, that doesn’t mean you should forget about retirement planning. After all, you could be retired for thirty years or more! 

Regular reviews allow you to adapt your strategy to suit your changing circumstances and goals, such as incorporating new family members, addressing health issues or relocating. It also enables you to keep up with the ever-changing tax and pensions landscape, including new opportunities that could work in your favour.  

Your pension options

Pensions are usually the foundations of retirement, so deciding what to do here may be one of life’s most important financial decisions. Pensions are complex anyway, but with greater freedom and choice than ever – and an increase in sophisticated pension scams – you must take extreme care.

You might benefit from consolidating several UK pensions into one to provide a coherent, more cost-effective investment platform for your retirement income. However, this may not be the most tax-efficient approach if you live in France. By receiving pension income in sterling, you would also be exposed to conversion costs and exchange rate risk.

Britons resident abroad have the option of transferring UK pensions to a Qualifying Overseas Pension Scheme (QROPS). Doing so can unlock advantages you do not always get with UK pensions, such as flexibility to take income in euros and more freedom to pass benefits to chosen heirs. Transferred funds would also be protected from UK lifetime allowance charges and future UK pension rules that may adversely affect you – an increasing possibility after Brexit.

If you transfer UK pensions to an EU-based QROPS as an EU resident, you can currently do so tax-free, but transfers outside the EU/EEA invite a 25% UK tax penalty. Once outside the bloc, the UK government could potentially widen this taxation net to capture EU-based QROPS in the future. 

Transferring is by no means a one-size-fits-all solution and the benefits of a QROPS can vary greatly between providers and jurisdictions. Be sure to take regulated, specialist advice before making any significant pension decision to protect your benefits and establish the most suitable option for you.

Retiring abroad

If moving permanently to France is on the cards, it is especially important to review your retirement strategy early. Not only will you need to consider your residence status and cross-border tax implications in a post-Brexit world, you will need to adapt your estate planning to suit the very different local succession rules. 

In any case, careful planning is the key to minimising taxation and maximising the available opportunities so that you can enjoy the retirement you want for as long as you need. For the best results, take specialist, cross-border advice.

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.

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

Give Your Immune System a Fresh Boost with Platinum Partner Metabolic Balance - French Country Vegetable Soup

Every January, the Metabolic Balance team starts the year with Phase 1 of their nutrition plan. After all, it is now more important than ever to do something for the immune system. Will you join us? Diet in conjunction with our nutrition program can significantly increase vitality and quality of life. The immune system gets a welcoming and fresh boost and, incidentally, unloved pounds melt away. That’s how we start the new year at full throttle, so why not join us!

French Country Vegetable Soup
Makes 3 litres ( can be frozen and reheated)
Vegetable stock - pre-prepare by simmering one carrot, one leek, one garlic clove, one onion, bunch parsley, ten black peppercorns and half a glass of white wine in 1 litre boiling water for three hours. Simmer down to 200mls, drain off vegetables, retain stock.

Ingredients
75 gms finely chopped garlic
450 gms finely copped white onion
300 gms celery, chopped finely
600 gms cabbage, shredded
200 gms green beans
100 gms spring onions
300 gms carrot, cubed
300 gms turnip, cubed
300 gms fresh tomatoes
2 litres *vegetable stock
4 pcs bayleaf
100 gms chopped fresh parsley

Method : In a soup kettle, gently heat half a cup of the vegetable stock and add garlic, onion and celery. Cook until soft. Add cabbage and cook until also soft. Add turnip and carrot and cook on low heat to steam and soften the vegetables. Add chopped tomatoes, spring onions, vegetable stock, bayleaf, salt and pepper. Bring to the boil, the simmer for thirty minutes. Finally, add parsley. Serve piping hot. Et voila!

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St Tropez House and Cap Villas Feature - How COVID-19 Changed Affluent Travel in the South of France & Beyond

High-net-worth and ultra-high-net-worth travellers have been more willing to make plans despite Coronavirus restrictions, showing a heightened resilience thanks to their affluence and heightened experience of travelling. Insight from global travel network Virtuoso shows that wealthy travellers are more comfortable with booking holidays as normal and simply waiting to see whether they can go.

This perhaps explains why St Tropez holiday rental agency St Tropez House noticed a 28% growth in rentals from 2019 to 2020, despite COVID-19 meaning that travel and holiday rental was out of the question for a significant part of the year.

Let’s compare this to the occupation rate in 4 and 5 star hotels in France, which experienced a 26.1% drop when comparing from October 2019 and October 2020, according to data from specialist firm MKG. This is likely due to the close proximity that people are in while staying in a hotel, when compared to a private villa with plenty of its own land.

How businesses enticed clients
Both St Tropez House and French Riviera holiday let agency Cap Villas report that in order to encourage bookings and allow clients to view accommodation in a safe way, luxury travel businesses all over the world had to rethink their marketing strategies to make them COVID-proof.

This has seen the introduction of 360° videos to better display features and entice clients, social media Ask Me Anything sessions replacing client lunches, and digital tours replacing physical ones, to name just a few changes.

Length of stay
The average length of stay at St Tropez House’s rental properties has grown compared to last year. In 2019, the average stay was two weeks, while in 2020 the average stay was 3.5 weeks, likely indicating people wanting to make the most of their holiday in a time when many of us didn't know when our next chance to escape would be. St Tropez House also noticed something it had never experienced before: certain clients who had already booked extending their stay, on average by 25% compared to the original length of their stay.

This correlates with information from Virtuoso, which says that HNW holidayers have been booking short stays for working vacations with their families and then extending as restrictions change and they perhaps realise there is no point rushing back, with the extra financial cost being no problem.

Cancellations
The uncertainty of 2020 has led to a change in the contracts of many businesses in the luxury travel industry working with HNW and UHNWIs. Companies such as yacht charter agencies, villa let businesses and hotels have felt pressure to modify their contracts to allow clients to rebook or cancel their holidays as needed in the light of the pandemic.

Both Cap Villas and St Tropez House updated their policies on cancellation, and an investigation by Elite Traveller shows that the vast majority of luxury hotel groups also updated their cancellation rules during the COVID-19 crisis, in order to ensure guests did not lose out financially.

St Tropez House witnessed an increase in cancellations in 2020, rising from one in ten in 2019 to three in ten last year. Out of these, 70% of St Tropez House’s holiday rental clients were moved to 2021 and 30% were simply refunded. The vast majority of cancellations came from the UK, where the situation seemed to be most volatile due to ever-changing restrictions.

Transport
Some 35% of St Tropez House clients came by private jet during COVID times - a significant increase from 15% in 2019, driven by the wish to travel safely and avoid being in the same space as other travellers

This aligns with data from private jet firms such as VistaJet, which charters private jets through a membership program and reported that July 2020 saw a 320% increase in new memberships compared to July 2019. Fractional jet ownership business NetJets also reported that between January and October 2020 they saw three times as many new customers as the same period in 2019.

VILLA LAS BRISAS

VILLA LAS BRISAS

VILLA LAS BRISAS

VILLA LAS BRISAS

VILLA AMA

VILLA AMA

VILLA AMA

Nationality of HNW travellers
St Tropez House noticed that no clients from the USA, Russia, Middle East, South America - nationalities who do typically book its holiday lets in the South of France - booked to stay in 2020.

Instead, St Tropez House saw an influx of more local clients, likely because it was easier to make the journey due to proximity and travel corridors. For example, the number of clients coming from nearby Monaco rose by 250%, while there was an 80% rise in those coming from Switzerland.

This correlates with a wider uptick in staycations in the luxury market, with many feeling their way back into travelling through more local holidays (according to Hong Kong Tatler).

New priorities
When looking for villas, both Cap Villas and St Tropez House clients in 2020 prioritised privacy and a larger land. Many were essentially looking for a ‘quarantine villa’ - somewhere they could hunker down with their bubble and enjoy a bigger space and change of scene. As such, Cap Villas and St Tropez House spotted new trends in demands for online shopping and private chefs, avoiding the need for clients to ever leave their holiday property.

Rumble Romagnoli, president of luxury digital agency Relevance, which specialises in targeting UHNW clients, confirms that demands for these convenient enjoy-at-home services is something he has seen across multiple clients in the travel and hospitality industry. This can be compared to previous years, where priorities from St Tropez House and Cap Villas guests have included a close proximity to the town centre, restaurants and boutiques.

Cosette Cutrara, Client Relations Manager at Cap Villas, says:
“In the midst of COVID 19 we have witnessed some unprecedented shifts in villa rentals along the French Riviera. Not only has our client demographic changed dramatically to be mostly European but also their criteria has changed, for example fully staffed villas have become more sought after than ever before.”

Emilia Jedamska, Booking Manager at St Tropez House, says:
“My high-net worth clients are moving further and further away from hotels and requesting villas for longer periods of time and with more spacious land, creating their own private oasis separated from the outside world.”

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Photography ©Tom Claeren

New Platinum Partner Glam Yachting Offers Excellence in Global Logistics And Management Driven by the Passion of the Ocean

Glam Yachting - Global Logistics And Management - was established in early 2018in Italy and then branched out to France & Montenegro putting the needs of the client & crew at the helm. The brand was founded by ex-captains and personal assistants creating the perfect bond driven from a passion for the oceans and VIP international travels and services. The result is an interesting mixture of knowledge, passion & experience able to surprise you in “Making the impossible possible”! 

In the past two years we have made great strides which have enabled us as a strong Team and a business to confidently ask for your consideration.

OLD SCHOOL VALUES + DECADES OF EXPERIENCE + DYNAMIC STAFF

At GLAM Yachting we use our existing experience, exceptional ability to communicate and passion to provide services at a fair price. Our CORE VALUES, as integrative part of the business, are: Transparency, Honesty, Passion and Integrity.

HOW DO WE OPERATE?
WE KEEP IT SIMPLE! - OLD SCHOOL VALUES WITH A MODERN OUTLOOK!

“We find out what your requirements are!
We then offer a solution that meets your requirements!”

In most cases our multi-lingual management team will oversee a dedicated representative whose only responsibility is to look after your needs.

Chiara Moschella
Personal Yachting Consultant
GLAM Yachting Founder
Glam Yachting SAS | Global logistics and Management

+33 617379155
+39 3394242227
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Montenegro | France | Italy