Case studies needed ?

[Liffy99]

Well, here we are, house hunting in Aquitaine. But that seems to be the easy bit !

Things were complex enough before Macron, Brexit etc. but I get the feeling noone knows where things will go from here.

I think I understand the buying process, and once bought, I would sort payment of taxes fonciere, d’habitation and water and energy bills etc. But is it worth it ? What is best to do with current assets and income in the UK and where would I be domiciled / resident .

Sure, we all have individual circumstances but, before rushing off to find a financial adviser, a few case studies would be SO helpful (and not the usual - moved here 10 years ago, set up a donkey sanctuary, raised 7 children and lived on a vegan diet happily ever after sort of thing).

For example, whats best to do with;

ISAs (cash and shates)

State pensions

Work pensions (local gov. And NHS - does the latter count as public sector ?).

Personal pensions (SIPP)

Bank savings and accounts

Peer to peer investments

The UK house

We have all of these (not rich, mostly modest amounts in many pies) and it starts to feel like it may be best to liquidate everything we can and then just transfer cash to France. Although pensions may be more beneficially treated.

What taxation are we likely to face on pension income, interest income, investment growth etc.

Guess I am looking for some initially free financial advice before plunging in with an IFA, just to get a feeling if its all worth it.

Cheers

[suein56]

Liffy99 wrote : But is it worth it ?

If you are looking for a personally tax-efficient/tax-saving country to live in perhaps France is not for you.

People come here for many reasons but high on the list is because they love France and/or the French way of life.

Our just-in-case we ever have to return to the UK strategy has been to keep ISAs, premium bonds etc but it costs us .. as all the income, winnings have to be declared here as they are not regarded as tax-free in this country's tax regime and all your worldwide income has to be declared here.

[Mac]

We kept our UK property-it's rented out and provides a bit more income. Rent us declared in UK(it has to be) and on our French tax form. We've been lucky we have great tenants (only 2 lots in the 7 years we've been here-one set for 4 years. The second 3 and counting) We were advised to sell and invest the money but I'm glad we didn't. We have friends who have had to return to the UK who-having sold everything-found it very difficult to afford a house in the area they wanted. As for pensions-we only have company ones st present. OH gets his OAP in 2 months. They ard paid into UK bank accounts and transferred as and when needed. OAP will be paid direct to French account. For us I think tax is lower here than in the UK-but it depends on income if course.

[alittlebitfrench]

I think before you start liquidating assets Liffy, you first need to decide if you like living in France.

I see you are doing the Aquitaine thing like thousands of Brits before you. Will you be buying a house off another Brit ? LOL. They are not all missing the grand children. France is a very difficult and VERY expensive country to live in.

Serious point thought, most don't survive France so I would keep your pies (LOL) in the UK. Certainly don't get rid of your house.

In 5-10 years time when you are sure you like living in France, go and see your French bank and get free advice.

BTW...Invest in stones !!!! in France. But not in Aquitaine. Well, a flat in Bordeaux perhaps and rent it out. If you do it wisely you will get tax relief. Wink Wink.

Please don't tell me you are doing the idyllic rural stoney cottage thing. That is not a good investment.

[nomoss]

Don't close your UK bank account(s), but check with the bank(s) that you can still keep the same account(s) once you have a French address.

Some, apparently, will close accounts which no longer have a UK address.

However, I believe UK banks now have to offer accounts with minimum services for non-residents.

This may all change after Brexit, as may other things you plan now.

[Judith]

Nomoss got there first - do NOT, I repeat, NOT close your UK bank accounts.

We did not keep any UK property (we would have moved from it anyway when we retired if still in the UK), but we did as it were, liquidise our ISA's, premium bonds etc.  However, all my pensions but my OAP pension in my case are paid into my UK bank account (it us useful to keep them active by having some transactions at least every 1-2 years, or they make them dormant), all my husband's pensions are converted at a good rate and come to his French account. It's your choice, but mine were due to cost of conversion taking too much of the pension, so I didn't. There are ways to keep your account active in other ways.  For example I have my different bits of pension paid into different bank accounts and I don't transfer sterling unless necessary - I use a UK credit card here (with no EU loading) and pay the bill direct from the UK account.

I would also agree with ALBF (though I often don't, but in this case I do), do not go the country place route unless you are absolutely sure this is what you want, they can take years to re-sell if you need to sell for whatever reason. I speak from experience - 6 years to sell ours.

Like you, I was doing this type of research, at about the same age as you, and I came here aged 59 (and one week!).  So I could use the S1 system immediately in my own name, as a temporary cover, and convert it to a full one when I got my OAP pension at 60 (one of the lucky last ladies to be able to do that!).  If you intend to retire here, even in spite of Brexit, and you might want to put that very much into your calculations, because we really do not know what will happen as permanent residents here after it happens (though we all hope it won't!).

And yes, rent before buying, and look at property in a town where you have a larger market to sell to if needed.

Moving to another country to live permanently needs far more thought and preparation than many give it, and putting Brexit into the mixture should really make everyone pause for thought longer than they might otherwise do.

And whatever you think when you come over, life has a habit of changing when you were not watching.  There are also more reasons for returning to the UK than missing the grandchildren - I don't have any by the way - but I am already giving serious thought as to where I want to be when I die.  Age, infirmity, and many other problems can hit you without warning the older you get.  Personally, now, at this stage of my life, and given the current political climate, I would have made different decisions from those I made 10-15 years ago.

And as my former driving instructor once said - if in doubt, anchors out.  Think long and hard, and close nothing you don't have to, even if you have to pay tax on it, until you know for sure that a life in France is for you.

[Cathar Tours]

The advice my father always gave was don't buy but rent for at least a year. If you rent out our UK property the income will get you something quite nice in France and pay many of your bills as well because renting is cheaper outside big cities and towns in France. How true that is now I don't know.

Last week the EU27 council of ministers met in Brussels and on the agenda was how UK Expats would be treated after the UK has left the EU. Ten countries, including Germany, said they would be treated the same as now. 15 countries said they would mirror whatever the UK did to EU Expats and two countries, Spain and France, said they had not decided yet. Strange how only three countries were named!

The group (whose name escapes me) representing Expats was quite happy with this but it should be remembered that this group is primarily driven by Expats that live and WORK in the EU and not by retirees and that most of its members are in Germany (to my mind this does not represent the whole of UK Expats in the EU but there you go).

Two key months are coming, June when the EU leaders discuss and either accept or reject the Brexit deal and October, should they accept it in June, when they report back from their own countries having discussed and voted on it in their own parliaments. Then it has to be voted for by the MEP's. According to Barnier if the June deadline is missed by the UK or at either meeting the deal is rejected then the UK leaves on March 29th 2019 with nothing, not even the extra two years transition period they have asked for.

So this means that renting anywhere in the EU for a year minimum is by far currently the best idea until at least after March 2019 if your looking to retire here. If the UK deal gets excepted then I would carry on renting till after the transition period.

The thing is for retirees especially nobody knows and it is purely guess work. The only real information you can work on is what non EU citizens in your country need to do currently to reside there as that is what you will become after Brexit.

For people who have come to another EU country to work they will be able to apply for a "Blue Card" via their employer which is like the American "Green Card". Some employers , like Ford, are already doing this for their employees. That will give them EU citizen rights while they hold it. As to those retirees it seems there is a grey area and certainly the UK government has not been very helpful.

My personal advice at the moment for retirees would really be don't do it, it's a risk to far or as Judith said "anchors out".

[BritinBretagne]

France is neither difficult nor expensive. It is however a bit different and the way that you face those differences can make a huge difference.

[EuroTrash]

"....just to get a feeling if its all worth it."

I think this is the key part of your post, and you say it twice so clearly you think so too. But the answer to your question depends entirely on your reasons for wanting to live in France - which oddly you don't mention at all. For some people, moving to live in France is worth almost any amount of hassle and financial sacrifice, for others it definitely isn't.

Some of the things you list, it's not a case of "what's best to do with" because you have no choice, eg how various types of pensions are treated is decided by the tax treaties not by you. Other things obviously you do have a choice over. But I would agree with other posters - don't close UK bank accounts, don't dispose of your UK property until you are very sure France is for you, and if possible rent for a while before you buy.

[Liffy99]

Thanks for all of your replies and I hope I can clarify a few points.

Reason for moving to France include a better climate (but not too much summer heat), a chance to explore beautiful countryside (we like cycling, walking, want a dog), the chance to buy a larger home we would not afford in the UK and above all, to have an adventure, learn a new language, be part of a different culture etc. Why France and not, say, Spain ? Just a comfort zone thing really - our grasp of the language (though still poor) is better, weve been over many times before and not had good experiences in Spain.

Certainly not trying to avoid taxation, but need to know what the potential financial impact might be as it would partly determine whether we could retire to France or not. Nor do we expect to try and ‘change’ the French system (who could ?) but it seems so incredibly complex its all but impossible to quantify liabilities in the same way I could much more easily do in the UK.

As an ‘early retiree several years away from a state pension, how do i get affordable access to healthcare (pre existing conditions would make a mutuelle very expensive) .

As far as i know I would no longer qualify for an S1, nor can i piggy back on my state pension aged wife. Would running a very small B&B business qualify me to get in by way of being a.

Micro entrepreneur .?

What social charges or income tax might we face on total NHS and local gov. Pensions of £30k ? What may change when we add state pensions of half that again ? What charges might apply on residual assets in the UK ( house if rented out, savings and investment interest etc).

I fel I should be able to work all this out but my technical French is nowhere near good enough and it looks like a minefield anyway.

As I started, some real life case studies would be so helpful (ie with figures) although I guess that might be similar to asking people how much they earn !

[EuroTrash]

"Reason for moving to France include a better climate (but not too much summer heat), a chance to explore beautiful countryside (we like cycling, walking, want a dog), the chance to buy a larger home we would not afford in the UK and above all, to have an adventure, learn a new language, be part of a different culture etc."

Thanks for explaining, and those are very fair reasons, but they are also very similar reasons to why you would choose a holiday destination. So I would repeat - don't cut your UK ties, in case it does in fact turn out to be a long holiday and never becomes "home".

"As an ‘early retiree several years away from a state pension, how do i get affordable access to healthcare"

You fill in an application form for the national healthcare service, which is called PUMA. Provided your household income is above the threshold for legal residence in France for inactifs, which at 30k it is well above, you will be accepted. You will then be charged annual contributions based on your income (not sure of the exact calculation but I think it's around 8% of income over around 10k).

You can find full details of PUMA costs and the French tax system online so you can work it out near enough to the euro, there are even simulators that will work it out for you, but as a very general rule the level of income tax people pay is similar to the UK and often lower. Social charges however are higher.

NB Rental income derived in the UK is taxable in the UK, as are most government and local authority pensions, and the DTA is applied. UK age retirement pensions are taxable in France.

NB2 Mutuelles do not take pre-existing conditions into account. Premiums are generally based on age, sex, occupation, place of residence, and of course level of cover. By law they are not allowed to ask for your medical history.

Hope this has clarified a few points.

[alittlebitfrench]

The reasons you have stated for wanting to move to France are a bit......ummm.......unrealistic.

I live in France because I want to live in France. If I had to, I would prefer to live in a small apartment than a big house in the UK. The reason being, I like France.

So, size of house is not really a factor. On that point, I live in a relatively big house. But come retirement (30 years time) I will live in a small (plan pied) house or probably an apartment. Houses are far to expensive to maintain and heat and then there also tax. Also, maintaining a garden can be a chore especially because of the weather. I want to enjoy life !!!

Most people in France live in small houses and apartments. People want live in small houses because large houses are tooooo expensive to run. If you look closely, small houses are relatively more expensive than large houses !!!! More demand. Large house, forget it in older age. Well in France.

The weather !!! for the last few years the weather in France consists of 9 months cold wet weather followed by 3 months of extreme unbearable heat. Remember, you can't do an awful lot in 30-40 degrees heat. Today it is cold an miserable. On the weekend it is forecasted to be 30 degrees. In our cour, that will be near 35-40 degrees. That change of temperature on the body is demanding.

Due to climate change, I think that will be the trend now in France.

So to be honest, the UK climate is better !!!! The heat is less intense.

I get the adventure bit, but that will wear off. Learning language !!! that takes years and years and years.

So before do your financial planning, get to grips with what 'non holiday' France is like. Is it for you.

Lastly, France is a big place. All Brits tend to move to SW France. Trouble is they don't know why. That is why they end up miserable watching Sky all day.

Think about other places live. There are places in France that will suit you but not others. Everyone is not the same.

[EuroTrash]

Well since Smeg has said it, I'll repeat it. Don't fall into the trap of getting carried away by the sheer amount of land and property you can get for your money. So many Brits do, which I suppose is natural because the UK is a bit obsessed with property and property prices and owning a big house is seen as aspirational. But having a big house and a lot of land to maintain can easily turn into an albatross round your neck as you get older, especially if it's in the middle of nowhere.

Rent first if possible, and when you're sure you have found the right place to make your home, buy a house that is the right size for you with the right amount of land that you will be able to manage.

[Liffy99]

I think the renting first approach would be sensible. By the way we do not want lots of land and a huge house, just something better than the UK - about 1500m plot probably.

Wife insists on growing veggies as we have an allotment in UK.

I will need to work out what is classed as income though for tax purposes.

But 8% towards health care (and I believe that would only cover 70% of costs) seems steep after having paid NI contributions for 40 years and no longer pay NI in the UK. Has all the agreement about reciprocal cover between France and UK gone ? Would anything change when I reach 66 (state retirement age ) ?

Perhaps a holiday home would end up being better and we spend less than 6 months en France.

As for other areas - sure. We really like the Vosges, but not its cold wet winters. What about east - Jura perhaps. We have been there in spring but assume winters are cold.

As for current weather, it has been up to 30 when we arrived over a week ag and down to 16 with thunderstorms. Always felt comfortable in any of this. Just how cold does Acquitaine get in the winter (i assume winter season is shorter in any case).

Thanks

[suein56]

EuroTrash wrote : But having a big house and a lot of land to maintain can easily turn into an albatross round your neck as you get older, especially if it's in the middle of nowhere.

Plus if you need to sell it that can take some time as, in the main, French people prefer to live not far from their work so you might be limiting your market to UK expats or similar hence the years necessary to sell it.

Not for everyone I know but OH and I have a saleable, modern house close to the sea .. so in case OH loses his love of gardening and we need to sell it should be snapped up on location alone.

Or we could make a profit by selling on half of the garden as a building plot .. as in general the French prefer to have their houses built to suit them.

[alittlebitfrench]

Sue wrote:

"Plus if you need to sell it that can take some time as, in the main, French people prefer to live not far from their work so you might be limiting your market to UK expats or similar hence the years necessary to sell it"

My father in law lives in a big house in a very sort after area of Nantes. Well, just outside Nantes. The house is too big for them.

The thing is, the house will be very difficult to sell because people don't want large houses. So what will happen is, the house will get sold to a developer who will then demolish it. They will then build as many tiny houses on the land as they can.

All the little houses will sell like hot cakes.

In terms of the Vosges, that would be my choice. Certainly for a B&B. But yes, it gets cold in the winter. Also, people from the Vosges are a bit unique.

Half my family are from the Vosges. LOL.

Play safe OP, go banliue of a large city. Yes you can grow veggies. Depending on your budget it will be a smaller house, but it will keep its value.

But in terms of weather, France is pretty much the same everywhere. Cold and miserable in the winter, and very hot in the summer. A couple of degrees here and there does not change much.

[EuroTrash]

"Wife insists on growing veggies as we have an allotment in UK. I will need to work out what is classed as income though for tax purposes."

All earned income is classed as income for tax purposes and also for social security purposes. If you're thinking of marketing your produce, be very wary. If you make an income from the land you would need to register with the MSA as a farmer/producer, which normally involves paying solidarity contributions - I'm sure you're aware of how unionised and militant the French farming sector is, and if you farm even on a very small scale you can't opt out.

"But 8% towards health care (and I believe that would only cover 70% of costs) seems steep after having paid NI contributions for 40 years and no longer pay NI in the UK. Has all the agreement about reciprocal cover between France and UK gone ? Would anything change when I reach 66 (state retirement age )?"

Brits grow up with the mindset that their healthcare is the state's responsibility, but healthcare has never been free at the point of delivery in France so people don't expect it to be, they accept it as a personal responsibility. Everyone has their own priorities of course but most people consider their health more important than eg a new car/TV/world cruise/etc. (For info, social security contributions for employed and self employed people are around 40% to 50% of their earnings, and most of that is for healthcare, so 8% is actually not a lot.)

The fact that you have paid NICs in the UK is neither here nor there if France is providing your healthcare. As you said yourself earlier, under EU regulations reciprocal cover doesn't apply to early retirees/inactifs. Possibly the UK might give you an S1 when you start collecting your UK state pension and then you would no longer have to make PUMA contributions yourself, but that would depend on various factors such as Brexit, and whether you had worked in France since leaving the UK.

If you're serious about moving you need to accept that the two countries have different economies and different mindsets. Houses are expensive in the UK and cheap in France, you're not objecting to that. By the same token it's no good objecting to healthcare being expensive in France and cheap in the UK. Things are what they are. Overall the cost of living probably works out around the same, it's just that your money goes on different things.

Sometimes it's only after people have moved abroad that they realise the value of some of the things they always took for granted in the UK, and they wish they hadn't given them up, which is rather sad. I believe the UK is the only country in Europe where healthcare is "free" to residents, so if you want to keep the NHS safety blanket then as you say, perhaps a holiday home in France is the answer. As someone said, either Suein56 or Smeg I think, holidaying in a country is one thing but moving there to live is quite another and needs a lot more hard thought.

[alittlebitfrench]

Another thing you have to remember is that the cost of setting up a B&B will probably cost more than paying private medical insurance.

Two things I picked up on. You want to explore France and your French is lacking.

In that respect, region centre is your best bet. Also, the weather is OK.

Have a look at Amboise. You can get by with little French. People are very gentle....which is important.....and if you want to go the B&B route, it is not such a bad place because there are a lot of tourists.

More importantly for me, because it is central in France you can go everywhere you like in a relatively short time. If you are stuck in Aquitaine you can't really explore France.

[YCCMB]

If, OP, you had joined this forum 10 or more years ago, and asked similar questions, anyone replying and expressing hesitancy about your plans would have been set upon by what we (back then) jokingly called the "rose tinted glasses brigade"

Back then, the received wisdom was to sieze the opportunity, move to France if you had an inclination to do so, and enjoy the experience.

How times change. Now, people sensibly recommend renting, advise against rash decisions and generally advocate caution and deep research. And nobody disagrees with them or calls them names.

In fact, a lot of people who moved complete with rose tinted glasses are no longer in France, and indeed some who are may wish they weren't. Back then, the exchange rate was touching €1.50: £1. Add inflation to the current exchange rate, whatever it is, and you get a stark example of why nobody, case studies or not, can tell you what's best to do with your money or your plans.

Add a layer of Brexit to your very sensible questions about investments, tax and healthcare and it quickly becomes apparent that people can only advise you about the status quo now, as nobody knows what might happen by 2020.

I've lived in the Vosges. For about 9 months of the year, the weather is mostly similar to Manchester. That's one of the reasons it was one of the main cotton processing areas of France.

[alittlebitfrench]

I was very late joining the forum party. Shame really, I could have helped so many people.

Now, there is an excellent response to a similar thread on another forum (not the 'what colour socks are you wearing today forum'...for bored Brits living in France) but a lesser known one.

It is by Chefsteve. It is worth reading and should be made a sticky on every French forum. It is perfect advice.

https://britishexpats.com/forum/france-76/moving-france-advice-911866/

Now, I got banned from that forum a few years back by telling someone that moving to France is a rich mans sport.

I still stand by that comment.

How times have changed !!

[EuroTrash]

"Another thing you have to remember is that the cost of setting up a B&B will probably cost more than paying private medical insurance."

Auto entrepreneur used to be seen as a cheap way into the healthcare system because you could turn over say 1k a year, pay cotisations on that which would amount to around 250€ or 170€ depending which category you are registered in, and that was your healthcare paid for. This changed in 2016 when PUMA was introduced, because under PUMA, if your business income (ie profit not turnover for self-employed) is below a certain level, any cotisations you have paid on that are disregarded and you are assessed for cotisations on your other income. The idea of these "cotisations subsidiaires" is to make it fairer so that everybody contributes according to their ability to pay.

So if you have an unearned income of around 30k, then unless your B&B brings in a good profit, you will simply end up paying a little extra in cotisations on top of what you pay in any case on your unearned income. So by all means run a B&B if you like the idea of meeting people, but don't do it just to obtain healthcare.

[Cathar Tours]

"But 8% towards health care (and I believe that would only cover 70% of costs) seems steep after having paid NI contributions for 40 years and no longer pay NI in the UK. Has all the agreement about reciprocal cover between France and UK gone ? Would anything change when I reach 66 (state retirement age ) ?"

Firstly the 8% for 70% cover is pretty cheap compared to the UK, if you did the math it would work out at 9.8% for 70% cover (based on a C1 contribution of 14%) there.

By reciprocal healthcare one has to assume your talking EHIC which is for holidays and your get charged the 30% and sometimes the whole amount then reclaim it back when you return to the UK.

What you have paid as NI in the UK over the last 40 years is for the UK only except for the pension bit ends when you leave.

Think yourself lucky in Germany you pay 9.3% for your pension, 7.3% for healthcare and 1.5% for unemployment. that's a total of just over 18%, 4% more than the UK. You employer pays around the same. You percentage can also go up depending on your normal standard of health and you can find you may pay 50% of hospital costs out of your own pocket unless you have a good private health insurance.

On the other hand in Spain you pay a percentage much like NI in the UK and the majority of healthcare, like with the NHS, is free but then you don't want to live in Spain.

As to SW France my dad lives there and used to run a B&B with my mum till she died. You don't get 300 days of sunshine per year as advertised on "A Place in the Sun" that's for sure. Two out of every three Brits that move there (so it is said) leave after five years. First reason is the weather like others have described and the second reason is family I.e. grand children etc. and friends (although once you move down there you find many acquaintances become "friends" looking for cheap holidays). To get better weather you need to be south of the Pyrenees and then of course the better the weather the more you pay for your property.

[Judith]

"Reason for moving to France include a better climate (but not too much

summer heat), a chance to explore beautiful countryside (we like

cycling, walking, want a dog), the chance to buy a larger home we would

not afford in the UK and above all, to have an adventure, learn a new

language, be part of a different culture etc."

Probably why we moved, if I am really honest.

Current analysis (taking on board and totally agree with Betty), things have changed, now, and pinch of salt and hope is not always enough.

You are becoming aware of some of the problems, which is good, and I hoep thqt will help you decide what to do.  Going the holiday home route might work best for you, know knows, but you'd still have the selling problem if you decided to leave.

And what is right for someone at 50-60 years of age is not necessarily correct when they arrive at 70-80, and suddenly find that life is more difficult once doing things gets harder.

I came with reasonably good French (A' level plus) but even I still struggle to understand and speak it and grasp what is needed to the point of irritation sometimes.

Just saying it is something else to be aware of, and learning a new language (plenty of posts on here about that), is not easier the older you  get, not necessarily acquired by assimilation.

[suein56]

"Reason for moving to France include ... the chance to buy a larger home we would not afford in the UK and above all, to have an adventure ..."

LOL ... the adventure part is right .. OH and I have had a great time finding out about living in France - the ups and downs, the bureaucracy, the politeness, the shrug of the shoulders.

But as to buying a larger home .. gosh that so depends where you want to live in France. I had 150K€ in mind when we moved here from our v large, modern house in the Wolds of Lincolnshire with views to die for but only 20 mins from Lincoln etc.

What an awakening I had .. our present modest home is about 40% the size of the house we had, the garden is much smaller at 900m2 and it cost exactly the same as we got for our desirable house in the UK, so way more than double what I expected to pay.

But we are v close to the sea in an area of outstanding natural beauty - as before in the UK - and we love that - so I expect we have paid the same price here as we would have for the equivalent in the uk.

[alittlebitfrench]

150 k will get you a horrible 2 bed flat to renovate where I live. It will buy less in more popular mainstream areas of France.

I have often said, houses prices are the same in France as the UK !!!

I am right. As usual.