Last week we focused on the positive tax changes afoot in Portugal that are likely to encourage a resurgence in interest in this stunning European nation as a potential place to retire. However, the Portuguese government aren’t the only ones aware of the fact that they need to do something in order to encourage an inflow of new residents and new capital.
France, an evergreen destination in terms of its huge popularity with Britons as a place to holiday, invest, relocate and retire, has also decided to embark on some significant changes to its taxation systems in a bid to attract new and wealthy residents.
As reported in this week’s The Sunday Times, the French president has come up with a canny way to attract the wealthiest foreign expatriates with a proposed abolishment of wealth tax. So, if you’re an entrepreneur looking for a safer haven to live in (financially speaking), or you’re seeking a more attractively taxed destination for your retirement, read on to discover how this change to France’s tax system could positively affect you.
As we reported last week, the Portuguese government has introduced a 10-year, back dated income tax exemption for foreign residents to benefit from if they move to live in Portugal permanently, and now the French government are also looking at ways to improve their tax system in a bid to attract new residents and their wealth to France.
Although it’s probably a very controversial thing to say, countries like Australia, Canada and New Zealand are very careful to vet the majority of those they allow in on residential visas according to how much they will financially contribute to society. Obviously those they attract under their investor visas have to financially commit to the nation, but even those who enter under skilled worker criteria have to be of ‘value’ to the nation to be accepted.
Countries like France and Portugal are not in the same position however, as they are in the EU and there is a cross-border agreement on the movement of those within the EU. In other words, anyone with a European Union passport can pretty much live where they want, so in order to improve financial revenues in a country within the EU, it has to offer something of appeal to the affluent.
In Portugal’s case it’s reducing the income tax burden for ‘ordinary’ citizens in a bid to encourage them to relocate to the nation permanently, and perhaps spend on a property and on day-to-day living expenses and thereby boost the economy. In France’s case it’s all about attracting the wealthier citizens.
France is proposing an abolishment of its wealth tax, which sees a tax charge of between 0.55% and 1.8% on net assets worth over 790,000 euros (which is about £675,000) annually. Therefore, this is a tax change of interest to expatriate entrepreneurs, high net worth individuals and retirees with a substantial retirement pot with which they want to buy a retirement property abroad for example.
Relatively speaking, France was always considered a higher tax country than the UK – that all changed when Britain introduced it’s 50% rate of income tax, and it has been compounded now that VAT is about to rise as well. What’s more, at the same time France has been taking measures to appeal more to the wealthy and actively affluent – such as offering up to a 30% income tax reduction on money earned in France for the likes of entrepreneurs.
You can add all of these positive measures to the fact that France is a fantastic nation with a diverse range of climate conditions across its many regions, it’s a country with fabulous and well priced property, and it’s a place where we Britons can really make a home from home abroad, and you can come up with a very good case in France’s favour as an ideal place to retire or relocate to.