BREXIT - What will it mean for French Property buyers and ex-pats in France?

Alliance partners and overseas tax and wealth management specialist, Blevins Franks, gave a presentation last month at the French Property Exhibition at Olympia, London, outlining the current knowledge we have on Brexit and the position ex-pats and owners could find themselves in post the transitional period.

In this article we extract and present the key points from the presentation:

The Facts

• 29th March 2019 – UK’s formal withdrawal date
• 31 December 2020 – EU’s preference for end of transitional period/’specified date’
• Approximately 2.2 million Britons live in other EU countries.
• 3 Million EU citizens live in the UK

Property in Provence

Current Rules

Any EU Citizen can move to and remain in another EU country for up to three months.

Longer than three months – the economically inactive (retired) must have:

1. Comprehensive sickness insurance
2. Financial resources to support themselves

New Rules

Joint Report from the Negotiatiors of the EU and the UK Government – 8 December 2017

• New residence/permanent residence procedure to similar to current EU rules
• Periods prior to specified date are qualifying
• Those with permanent residence by the withdrawal date – issued a new document for free
• Application process to be simple, transparent, smooth and streamlined
• Up to two years for citizens to submit their applications
• Either free of charge, or not exceeding similar cost

More than three months

• All EU Citizens have the right of residence for a period of longer than three months if they have sufficient resources, comprehensive sickness insurance, etc
• Will need to provide proof of income, capital, etc.
• Cannot set a fixed amount for ‘Sufficient resources’
• Amount shall not be
  • More than the domestic threshold to become eligible for social assistance or
  • More than minimum domestic social security pension

Worst Case Scenario

• More than three months – apply for a standard long-stay visa, or “carte de sejour temporaire”, valid for one year on a renewable basis
• Obtain a visa from French Consulate in home country
• Provide documentation, including health insurance, evidence of financial resources, non-bankruptcy, non-criminal convictions in preceding ten years, proof of your accomodation arrangements, etc.
• After 5 years – can apply for a 10-year, renewable long term EC card OR French citizenship

Briancon, Hautes-Alpes

Current Position

• 2016: New French healthcare system for foreigners 2016
• ‘Protection Universelle  Maladie’ (PUMA)
• Permanent residents are entitled to state health insurance if they have lived in France after first three months
• 70% of doctors’ fees, 80% of hospital costs reimbursed
• Some major or long term illness – 100% covered
• Remainder paid by patent or via supplementary private health insurance
• Most people have top-up health insurance or l’assurance complémentaire santé’ from a mutual society or insurer

8th December 2017

Communication for the European Commission to the European Council (Article 50) Brussels

“Citizens will maintain their right to healthcare, pensions and other social security benefits… previous periods of insurance, work or residence in the EU or UK will be taken into account”

Healthcare Entitlement therefore if:

• you are paying French or UK social Security contributions (employed or self-employed in France)
• you hold Form S1/A1 (In recipet of UK state pension/still working and paying NI in the UK)
• you are paying PUMA contributions
  • Resident in France for 3 + month and make payments on taxable income
  • Make payments based on taxable income (usually 8%)
  • Minimum income threshold €9,807 a year
  • Not pensions but could be liable for social charges (9.1%)

Curemonte in Corrèze 

Current Position

• UK State Pensions are paid to residents abroad
• Escalation (annual Increases)
• EU Countries + Gibraltar, Switerland, Barbados, Bermuda, Bosnia-Herzegovina, Jersey, Guernsey, the Isle of Man, Israel, Jamica, Kosovo, Macedonia, Mauritius, Montenegro, Philippines, Serbia, Turkey, USA

Joint Report from the Negotiators of the EU and the UK Government – 8 December 2017

• Will follow EU ” Social Security Coordination ” rules
• UK national resident in France will have their contributions from before and after the specified date in the EU and UK taken into account

The UK’s Exit form the EU: Safeguarding the Position of EU Citizens Living in the UK and UK Nationals Living in the EU 

HM Government – June 2017

“…annual increases to the UK state pension (known as ‘uprating’ to anyone living in the EU are payable because of EU law. The UK intends to continue to export and uprate the UK State Pension within the EU…”

• Personal taxes are decidedly domestically, by each States ruling government
• Arrangements between State’s is determined by the Double Tax Treaty in place
• The UK-France Double Tax Treaty came into force on 18 December 2009
• Little should change with the UK leaving the EU

Averyon Midi-Pyrenees

• Withdrawal date at the end of the transitional period – 31 December 2020
• But the UK could drop out of the EU on formal exit date on 29th March 2019 if no agreement by October 2018

Only certainty is if you are resident in France by 29 March 2019, you will qualify for :

• Simplified residence and permanent residence rules which include pre-Brexit periods of French residence
• You will qualify under current EU Healthcare rules, and retain your right to an index-linked UK State Pension, even if you have not yet retired.

Top Three Places For Retirees to Live in France

Our thanks to Blevins Franks for sharing this presentation with us

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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 should take personalised advice. All figures quoted in this presentation are for illustration purposes only.

Blevins Franks Financial Management Limited (BFFM) is authorised and regulated by the Financial Conduct Authority in UK, reference number 179731. Where advice is provided outside the UK, via Insurance Mediation Directive from Malta, the regulatory system differs in some respects from that of UK. Blevins Franks Trustees Limited is authorised and regulated by the Malta Financial Services Authority for the administration of trusts and companies. Blevins Franks France SASU (BFF), is registered with ORIAS, register number 07 027 475, and “ authorised as “ Conseil en Investissement Financiers” and “Courtiers d’Assurance” Category B (register can be consulted on www.orias.fr). BFF’s registered office: Parc Innolin  3 Rue du Golf, CS 60073, 33701  Mérignac – RCS BX 498 800 465.  Blevins Franks Tax Limited provides taxation advice; its advisers are fully qualified tax specialists. This promotion has been approved and issued by BFFM and issued by BFFM tax specialists. This promotion has been approved and issued by BFFM.