French wealth tax

[Camille]

I am a non-EU citizen with a second home in France that I can presently use only for vacation. I've got 14 years of savings in a retirement plan through my employer, and a minimum of 15 years before I can begin to think about moving to France on a semi-permanent or permanent basis and yet another 12 years or so before I can finally "retire." Thankfully (or not?), I'm not approaching the point of wealth tax being applicable, but presumably in 15 years when I anticipate changing residency there might be enough (between the home, assuming French use future-value or "then-current" value as opposed to what I paid, and my retirement account balance). I'm concerned about wealth tax eventually kicking in (12 years before I am eligible to draw on the funds -- in fact, I'd incur early withdrawal penalties], and basically preventing any necessary growth of the retirement account, possibly eating into principal, or forcing me to use what meager income I might have at that point just to service taxes on this sort of phantom wealth, and leaving me no monies to actually live on during that 12 year period, or, worse, forcing me to liquidate and incur substantial penalties. It seems harsh. Has anybody successfully put their retirement account into a trust, which then pays you an annual sum (on which you just pay the typical French tax on that income and, if applicable, wealth tax on any non-retirement oriented assets). I don't have an issue with paying taxes, but it does seem a bit of an unfair burden (at such relatively low thresholds, as opposed to truly wealthy individuals) to be expected to pay extra on top of income tax out of retirement savings that are in effect the only means of sustenance, except if/when I die early and they can help themselves to the whole bit as far as I'm concerned. (Lest anyone think I'm a Scrooge, I don't have a hubby or children so nobody's gonna be missing out). I don't anticipate having much social security benefit despite having paid into my system, and I rather doubt that I'd get anything out of the French system though I would not object to paying into it (and probably will pay one way or another anyway).

Thanks for sharing any anecdotes and/or insights.

[A_Redman]

I believe that retirment funds which have been used to buy an annuity ( an investment which pays a higher rate of interest for your life time in return for having all rights to the capital when you die ) do not form part of your assets under French wealth tax rules.