Finance – Bordeaux Expats

Expat Finance with Tony

Mike Foster — Tue, 11 Nov 2014 13:55:00 +0000

Tony Delvalle is an Expat and an Independent Financial Adviser that has been living in France for many years.

Here are some of the bullet points Tony has taken from the OECD Brief dated 29th October 2014 which when read in conjunction with France’s new crackdown on Tax Evasion and proposed penalties makes it today even more important than ever that your affaires are structured correctly. Certainly as an Expat we have more reason to make sure that our assets are in the most tax efficient homes and do not fall foul of ever changing tax rulings.

Please contact Tony to discuss if this is of concern to you.

tony.delvalle@spectrum-ifa.com

Previous event hosted by Tony.

Automatic Exchange of Financial Account Information INFORMATION BRIEF Updated: 29 October 2014

AUTOMATIC EXCHANGE OF INFORMATION
Vast amounts of money are kept abroad and go untaxed to the extent that taxpayers fail to comply with tax obligations in their home jurisdictions. Jurisdictions around the world, small and large, developing and developed, OECD and non-OECD, stand united in calling for further action to address the issues of international tax avoidance and evasion. Co-operation between tax administrations is critical in the fight against tax evasion and a key aspect of that co-operation is exchange of information.

A major breakthrough towards more tax transparency was accomplished in 2009 with information exchange upon request becoming the international standard and the restructured Global Forum on Exchange of Information and Transparency for Tax Purposes starting to monitor the implementation of the standard through in-depth peer reviews.

Now, there has been another step change in international tax transparency. On 9 April 2013, the Finance Ministers of France, Germany, Italy, Spain and the UK (the countries that developed the FATCA intergovernmental agreements with the United States) announced their intention to exchange FATCA-type information amongst themselves in addition to exchanging information with the United States. By September 2014, nearly 50 jurisdictions had joined this group and committed to the early adoption of the standard developed by OECD, including a specific and ambitious timetable for doing so.

Following the commitment to establish automatic exchange as the new global standard made by G8 Leaders inJune 2013, the G20 Leaders at their Summit in September 2013 fully endorsed the OECD proposal for a truly global model of automatic exchange and invited the OECD working with G20 countries to present such a new single standard for automatic exchange of information in time for the G20 February 2014 meeting. In February 2014, the G20 Finance Ministers and Central Bank Governors endorsed the global standard for automatic exchange of tax information.

Following approval of the Standard for Automatic Exchange of Financial Information in Tax Matters by the OECD Council on 15 July 2014, the full Standard was endorsed by the G20 Finance Ministers at their meeting in Cairns in September 2014. See the Annex for G8 and G20 statements providing support for the work.3

Furthermore, on 14 October 2014 the 28 Member States of the European Union reached a political agreement on an amended Directive that will implement the new Standard in the EU.

On 29 October 2014, 51 jurisdictions, 38 of which were represented at ministerial level, signed the first ever multilateral competent authority agreement to automatically exchange information under the Standard, based on Article 6 of the Multilateral Convention. The significance of this event was demonstrated by the participation of 38 ministers* in the signing ceremony, the largest gathering of ministers to take joint action to address tax evasion.

The signatories were: Albania, Anguilla, Argentina, Aruba, Austria, Belgium, Bermuda, British Virgin Islands, Cayman Islands, Colombia, Croatia, Curaçao, Cyprus, Czech Republic, Denmark, Estonia, Faroe Islands, Finland, France, Germany, Gibraltar, Greece, Guernsey, Hungary, Iceland, Ireland, Isle of Man, Italy, Jersey, Korea, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Mauritius, Mexico, Montserrat, Netherlands, Norway, Poland, Portugal, Romania, San Marino, Slovak Republic, Slovenia, South Africa, Spain, Sweden, Turks and Caicos Islands, and the United Kingdom.

The Global Forum on Transparency and Exchange of Information for Tax Purposes, which brings together more than 120 countries and jurisdictions, has also collected commitments from its members to implement the new Standard. Through this process over 80 jurisdictions have expressed their commitment to implementing the Standard to specific timetables.

A single global standard for automatic exchange of financial account information

The financial information to be reported with respect to reportable accounts includes all types of investment income (including interest, dividends, income from certain insurance contracts and other similar types of income) but also account balances and sales proceeds from financial assets.
The financial institutions that are required to report under the CRS do not only include banks and custodiansbut also other financial institutions such as brokers, certain collective investment vehicles and certain insurance companies.

Reportable accounts include accounts held by individuals and entities (which includes trusts and foundations), and the standard includes a requirement to look through passive entities to report on the individuals that ultimately control these entities.

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Wills for Expats in France

Mike Foster — Sat, 03 Mar 2018 12:24:00 +0000

Planning in advance is a must when you have a family, more so when being in an international setting. Here is a great break down of what to look at for planning for the future.

If you have been reading the news recently you will know that a legal battle is about to start between the wife of the much beloved deceased French Rock Star Johnny Hallyday and his two children from his previous relationships, Laura Smet and David Hallyday.

Johnny Hallyday’s children will reportedly contest the decision in his will to leave all his property and artistic rights to his widow Laeticia and their two adopted daughters. Whilst many of us do not have the same level of wealth as Johnny Hallyday, this case does highlight the issues around proper legal wills and more especially in situations where one has assets in more than one country.

Why is it important to have a will?

No one is legally required to have a will; however, most people want to be able to leave instructions on how their assets should be handled in the event of their death. A will is a legal document allowing you to communicate what you would like to happen to your personal possessions after you die. When you purchase a high value, physical asset, such as a house, it becomes even more important to be able to decide who would receive such assets should something happen to you.

If you are resident in France and do not have a valid will in place, then your property would be shared out according to the French rules of intestacy, granting automatic inheritance rights to any children you may have had, your surviving spouse, or to other relatives in the absence of a surviving spouse or child. If you do not have children and are not married or in a civil partnership, your assets would go to your nearest relative.

Do I need to re-do my English will now that I have bought a property in France?

If you have bought a property in France and have not updated your UK will, it would be advisable to speak to a UK cross border specialist who would be able to advise on whether your existing English will is suitable, or whether it may need replacing or updating in any way.

An English will – if properly drafted and executed in accordance with the UK Wills act of 1837 – would be recognised in France. France has signed the 1961 Hague Convention concerning wills and therefore recognises wills that are valid under UK law. Your French assets could therefore be dealt with together with your English assets under a carefully drafted English will, however this is not recommended in every case and you should seek proper legal advice to ensure that this would be the best solution in your personal circumstances.

When drafting a new will, it is important to inform your lawyer or notaire of the existence of any previous wills in any other country, to avoid revoking a will you have already made in the other country. They would be able to assist you in drafting a new will which takes into consideration any other wills specifically dealing with property in another country.

Do I need to do a French will?

This will depend on your individual circumstances and you should always seek professional advice from a properly qualified lawyer experienced in dealing with cross-border matters. “The inheritance and tax laws of the two countries are very different and each case needs to be examined individually before making a decision” says Matthew Cameron, Partner at Ashtons Legal, specialist in French law and cross-border legal issues. For example, whilst trusts are used very frequently in UK wills, they can cause all kinds of additional administrative and filing obligations in French law. A UK testator usually appoints executors to administer his/her estate after death and distribute the assets to the beneficiaries. In French law the notary is responsible for distributing the estate and assets can be held “jointly” or in “indivision” until the estate is wound up.

You should also note that under French law you cannot leave your estate to whomever you wish. The children have priority over the estate and the surviving spouse is only entitled to a fraction of the whole amount. So whilst you can, in a French will, give certain assets to friends and relatives, you cannot override French inheritance laws in the terms of your will.

I have heard that I can have English law apply to my French will is this true?

The European Succession Regulation 650/2012, also known as ‘Brussels IV’, which came into force on 17 August 2015, allows one law to apply to the whole of the deceased’s estate regardless of the location of the asset. International private law states that French law applies to immovable real estate assets situated in France and English law applies to real estate assets situated in England. Under this Regulation the laws of the country in which a person is habitually resident at their death will apply to them unless they have made a declaration during their lifetime. This means that if you wish to elect for the law of your nationality to apply to the disposal of your estate, and for it to be recognised in France, it must be written into your will. However, the inverse cannot apply as the UK opted out of this EU regulation, so only English law can apply to an English estate. As Caroline Jeanson, notaire in Bordeaux who worked for over 12 years with English speaking clients in the Duras area, said “I have never yet, since the Regulation was enacted, advised a British national resident in France to opt for English law in their French will”. Whilst in theory you can choose which law will govern how you leave your assets, this will not avoid French inheritance tax. Under French tax law, if you leave your assets to someone who is not a direct blood relative, there can be substantial tax consequences. That beautiful chateau you own would probably have to be sold to settle the tax liability.

Do I need to do a will with a French notaire?

Strictly speaking you do not need to go to a French notary to write your will. You can do a hand written will called a “Testament Olographe” (holographic will) which is perfectly valid under French law. There is no legal requirement for it to be in the French language, it does not need to be witnessed nor does it have to be registered anywhere, however it is advisable to have it registered with the Central Wills Registry (Fichier Central des Dispositions de Dernières Volontés) which would enable any notary to access it. In any case it is best to seek the advice of a French notary before drafting a will. The first consultation is free and once the notary fully understands your specific situation they would be able to advise you on how best to draft the terms of your will.

Anyone who has ever lost someone will tell you that not only is it difficult to manage emotionally, but just at this very difficult time, there are a whole range of administrative matters that have to be dealt with. If the person did not make provisions in their will it is left to their friends or loved ones to deal with their assets, causing further upset and difficulty. To avoid this and to fully understand your personal situation it is best to seek professional advice from an independent financial adviser specialised in French tax matters, a UK solicitor specialised in French law or a French notary with several years’ experience advising English speaking clients.

For any questions or to make an appointment, please do not hesitate to contact us.

Katriona Murray-Platon

katey.murray@spectrum-ifa.com
www.spectrum-ifa.com
Tel: 09 53 28 88 22
Mob: 06 81 61 78 44

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Pensions in France

Mike Foster — Tue, 27 Mar 2018 08:27:00 +0000

If you are working or have worked in France then you are contributing or have contributed to a pension (subject to minimum earnings/salary).

Author: Katriona Murray

There are many different pension organisations which manage the pensions for different types of workers and self-employed workers depending on their specific business.

Irrespective of whether you are self-employed or a salaried worker, you will have been contributing to your basic social security pension and your additional complementary pension (complémentaire).

In order to qualify for the basic pension, you need to:

Have attained the minimum pension age (currently between 60 and 62)
Have stopped working (although, under certain conditions, once you have started to receive your pension, you are allowed to do a small amount of paid work)
Have contributed the required amount of quarters or trimestres

The age at which you are able to retire and the amount of trimestres required in order to receive a “full” pension, will depend on the year you were born.

At best, a “full” pension will roughly equate to about half of the average of your best 25 years of earnings, provided that you have contributed the required amount of trimestres.

The additional complementary pension works on a points basis. So, for each year you earn or contribute you will receive a certain amount of points. Upon retirement, the complementary pension will be equal to the number of points earned over the years multiplied by the annual value of the point. This will provide you with an additional pension payment.

As well as contributing to your state and additional pension, you can make voluntary contributions to a private pension called a PERP (Plan d’Epargne retraite populaire). Please note however that whilst there may be tax advantages to contributing to such a scheme, the money paid in is essentially locked away until retirement and you can only take a lump sum of 20%.

Another, very tax efficient, alternative to regulated pension arrangements are assurance vies. I won’t go into too much detail here but suffice to say there are many good reasons why millions of French people use the assurance vie as their standard form of saving and investment.

If you work for a large private company, you may be a member of a collective retirement savings scheme such as a PERCO (plan d’épargne pour la retraite collective) or a PERE (plan d’épargne retraite entreprise). These would provide you with additional income on top of any other standard pension schemes.

If you have contributed to the state pension scheme of more than one EU country you may be entitled to a pension according to the rules of the country concerned and a pro rata share of the “EU pension”. This will take into the fact that you have worked in different countries in the EU and will aggregate all the periods of work in order to determine the “theoretical” amount of the full pension in the country doing the calculation. So, if you have worked in the UK and France the pension will be calculated as if you have worked the required number of years in the country from which you are claiming the pension.

No matter how long you have contributed, you will be entitled to a pension if it is even only a small amount.

If you have never worked or if you have a very small pension income upon retirement, depending on your level of income, you may be entitled to claim ASPA (allocation de solidarité aux personnes âgéesI). If you have a disability you may also be able to claim a benefit called ASI (allocation supplémentaire d’invalidité).

In any case, whether you are nearing retirement or still many years away, it is best to understand what your situation will be and start planning as early as you can. It is never too late to start putting aside whatever you can. Life expectancy is increasing and you want to be able to continue to live a good quality of life for as long as possible.

Please note that pensions are rather complex and this article is only intended to give a very basic overview. For any further questions or for a full review of your personal situation, please do not hesitate to contact me.

Whether you want to register for our newsletter, attend one of our road shows or speak to me directly, please call or email me on the contact details below and I will be glad to help you. The Spectrum IFA Group advisers do not charge for our reviews, reports or recommendations.

Katriona Murray-Platon

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BORDEAUX BECOMES THE NATIONAL LEADER IN JOB CREATION

Mike Foster — Thu, 24 Jan 2019 09:45:07 +0000

Bordeaux is at the top of the list for the most dynamic French cities in regards to job creation.

This is according to a study carried out by private employment website HelloWork.

Bordeaux is projected to be the metropolitan region with the most jobs created, with a 34% increase in offers in 2018. This business dynamic even places the city above Paris in the pecking order!

With four online recruitment platforms, HelloWork is well placed to observe the goings-on within the French labour market. The company boasts over 110 million visits and 14 million job seekers/recruiters. They carry out a yearly study that ranks French regions and cities in accordance to their recruitment dynamics.

The region of Nouvelle Aquitaine sits high in the national classifications, with a 31% increase on job offers from the previous year. Nonetheless, the Île-de-France remains the most job-rich region with 20% of the national average.

Among the most affected Bordelaise sectors, we find industrial engineering at 31%, computing/IT at 30% and finance / accounting at 27%.

Last year was a good year for permanent contracts (CDI), which accounted for 66% of job creation in 2017. This has been increased to 71% in 2018.

A reason for the stark increase in the regions ranking maybe due to the launch of the LGV train line. Bordeaux in now connected to Paris in only 2 hours.

What does this mean for Expats / International profiles?

Well, this all depends on what you’re bringing to the game. As always, when arriving in France you must expect to be in direct competition with the locals when going for a job. This means that you must have a great level of French and in some cases assure that your qualifications are certified or are the equivalent of French degrees within your domain.

Simply said: speak French, go hard with CV in hand, don’t take ‘non’ for an answer.

Got other suggestions or opinions? Leave them in the comments below…

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NO-DEAL BREXIT IN THE SOUTH WEST

Mike Foster — Fri, 08 Feb 2019 12:33:40 +0000

The CCI International Nouvelle Aquitaine held a presentation on the 7th February regarding BREXIT and the impact in France.

Caroline Moreau, from First Start in Bordeaux, attended the event and provided us with her own account of the meeting.

It was a meeting essentially for companies in the South West who import, export or have dealings with the UK and who subsequently need to prepare themselves for BREXIT and notably the possibility of a no-deal BREXIT.

A ‘no-deal’ Brexit means that the UK and the EU have been unable to reach a withdrawal agreement. It is now very unlikely given the short deadline of the 29th March for a deal to be met thus the CCI is advising all businesses to prepare for the scenario of a no-deal BREXIT. With a no-deal BREXIT there will be no 21 month transition period.

Consequently consumers, businesses and public bodies have to respond immediately to changes as result of the UK leaving the EU.

All companies in France need to prepare themselves by firstly evaluating how BREXIT will impact them and make changes as soon as possible if they haven’t already done so. All of the standards which aren’t controlled by World Trade Organisation rules may be modified, thus there is a lot to take into account. There is an enormous amount of uncertainty as numerous questions still haven’t been answered for example on how VAT and customs duty will be applied by the UK, which standards will the UK recognise?

For sure there will be additional costs for companies and customs procedures will be longer. Businesses need to be prepared but it’s extremely difficult given the context…

The French authorities have been preparing themselves as 700 new customs officers have been recruited in France to deal with all the new formalities and red tape !

For more information take a look at the government website.

About the author:
Caroline is a native Londoner who settled in Bordeaux more than 15 years ago. First Start in Bordeaux is a relocation agency that aims to assist people who face resettlement issues when moving to the South of France.

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