Retiring to France - tax issues

[Mutts]

I've been reading some of the posts here and decided it's time to read my Charles Parkinson Taxation in France 2004.

The chapter on creating a tax holiday : to organise the taxpayers estate so that it attracts the least amount of capital tax; off-shore trusts etc. Am I right in thinking this applies only to those who have an amount to invest from which they will not need the income?

After selling our UK home, we'll have a capital sum to invest, but need the income to fund our retirement. Capital gains shouldn't apply as our UK home is our principle residence. We're also looking at making a discretionary will-trust for pre-retirement to France (retirement planned for approx summer 2006) and post(?).

It's tempting to seek professional advice, but from what I've seen so far, the costs are immense and are probably only cost-effective for those with 7-digit savings. If anyone knows of good, sound advice on tax planning for a French retirement, which won't cost more than it saves, I'd be very interested.

Regards

Linda

[LesLauriers]

There are serious advantages to be had by planning your finances and investing prior to arriving in France.

Inheritance tax can be substantially reduced if not completely avoided, and your liability to income tax and social charges can also be reduced by taking action prior to leaving the UK.

In the strongest possible terms I would advise you to seek professional advice tailored to your situation.

[Will]

You may also have to consider the French wealth tax.

[Mutts]

Thank you both for your replies. A hasty look at the chapter on wealth tax reveals "wealth tax is paid by individuals who have taxable wealth in excess of the current nil-rate band of 720,000 euros". Thus suggesting each individual has a nil-rate band of 720,000, but the typical wealth tax computation is based on a married couple giving them only one nil-rate allowance. It also (strangely) suggests liabilities can include outstanding credit card balances which seems to allow manipulation of the system.

The last thing I want to do in my retirement is spend time trying to understand French tax law so provided I can find a reasonable quote I'll seek professional qualified advice.

Thanks again for your help.

Linda