France has long been a top retirement destination for British nationals, accessible within a short travel time and yet offering a distinct contrast in lifestyle, climate and culture. Roughly 150,000 UK expats live in France, comprising approximately 0.2% of the population, with vibrant and welcoming expat communities throughout the country.
Whether you are looking forward to a peaceful retirement in the warmth of the Côte d’Azur, aspire to relocate to the eclectic, modern cities of Marseilles, Paris or Lyon, or would like to purchase a retirement property close to the Alpine borders with Switzerland and Italy, there is much to consider.
Here the Chase Buchanan team in Bordeaux explains some of the essential information you should know before you retire in France, covering pension income, tax obligations, retirement visas and healthcare coverage.
Choosing a Retirement Location in France
The first step for many UK nationals planning a French retirement is to think about where they would like to live. This element is important since living costs and average property prices may vary considerably between more rural regions, major cities and the popular Mediterranean coast.
Much depends on your budget and priorities, but many UK citizens retiring to France choose to live in the western region around the Dordogne or retire to southern France in areas such as the Languedoc province.
As an indication, the table below compares the average cost of living in some of the most in-demand locations to show how expenditures vary based on where you choose to live:
|Central Property Purchase Price Per Square Metre
|Restaurant Meal for Two People
Applying for a French Retirement Visa
France is a full member of the European Union, meaning that British citizens will require a long-stay visa or residence permit to live there. There are two primary visa categories most UK retirees decide to apply for:
- The VLS-TS is a long-stay visa that functions as a residence permit. This visa allows holders to reside in France for up to one year, although it is renewable annually.
- The Temporary Long-Stay Visa, or VLS-T, allows expats to live in France for four to 12 months and is not renewable. However, if you intend to apply for a subsequent residence visa or wish to remain in France for the short term, perhaps when searching for a property, this visa may be suitable.
Retirees who receive a State Pension, are above the standard retirement age and do not intend to work in France will need to provide several pieces of information and documentation to demonstrate their eligibility for a long-stay visa.
These include proof that you meet the minimum income requirements based on the French minimum wage at the time of your application. Savings can be used towards this financial means requirement. The current income threshold is at least €1,747 (£1,512) gross a month or an annual income of €20,964 (£18,141) or above per person.
You will also be asked to provide evidence of a valid passport to show your legal status, details of your intended accommodation within France, proof of medical insurance, and an attestation letter which verifies that you do not plan to work. Most British retirees will initially apply for the VLS-TS visa and then apply for a full residency permit once settled.
Securing Permanent Residency Status as a UK Retiree in France
Expats who have secured a long-stay visa and have relocated to France can apply for a Carte de Sejour, or residency permit, provided there are at least two months remaining on their current visa. Otherwise, they will normally need to renew their visa before applying or leave France and re-enter to resume the process.
New residents must renew their residency permit annually for the first three years. They can then apply for a different Carte de Sejour category intended for tax residents who are retired or otherwise considered ‘economically inactive’. This residency card can be issued for between five and ten years.
Third-country nationals who have lived in France for five years or more are normally eligible for permanent residency.
Healthcare Insurance Requirements
The French healthcare system is considered of a high standard, and long-term residents may be eligible to opt into the universal health insurance scheme, which covers roughly 70% of the costs of medical treatments.
Expats who are not existing residents will need to provide evidence of private health insurance as part of the visa application process, which is a mandatory requirement. There are several options which may include:
- Taking out private healthcare coverage through a UK or French provider.
- Purchasing French state insurance coverage through the Protection Universelle Maladie or PUMa scheme.
- Applying for a Carte Vitale medical card through the French universal healthcare system depending on your eligibility.
- Applying for an S1 or S2 certification from HMRC which provides reciprocal healthcare coverage, available to UK State Pension recipients.
Many UK nationals who retire to France also purchase a supplementary health insurance plan, referred to as a Mutuelle, which provides additional coverage against the costs of treatments such as buying medicines from a pharmacy or accessing dental care.
Understanding the Tax Implications of Retiring to France from the UK
There is a distinction between residency and tax residency, and this is an area where many expats require professional advice to ensure they have sufficient income to achieve their expected lifestyle without unnecessary tax obligations.
Tax residency effectively means that you live within France most of the time and are a resident for tax purposes. Expats within this category are subject to taxation on their worldwide income, including overseas incomes and assets such as property held within their home countries. They may be more likely to be exposed to wealth tax since all international assets are taxable within France.
You will usually be deemed a tax resident if you have lived in France for 182 consecutive days or more or registered for a residency permit. You must then begin submitting tax returns and paying the arising tax liabilities.
One of the complexities is that many expats find they are required to submit tax returns in both the UK and France. Double tax treaties between the two countries mean you won’t need to pay duplicate taxes on the same income or event but will be liable for any difference.
We strongly recommend you consult an experienced financial adviser to assess your tax residency position since this may impact your income tax and capital gains tax obligations. It is also wise to consider your inheritance tax planning since a British domicile with worldwide assets, such as UK-based properties, may be subject to UK inheritance tax regardless of where they live.
Contrasts Between the French and British Tax Regimes
UK retirees generally find that taxes in France are lower, but they must account for higher social security contributions. France has no personal tax allowance, but a similar deduction applies before social charges become payable. You may need to budget for:
- Personal income tax rates, which range from 0% to 45% depending on your income and whether you are married. An additional 3% surcharge is payable on incomes over €250,000 (£216,000) for an individual or €500,000 (£432,000) for a married couple. Single taxpayers with an income above €500,000 and married couples with annual earnings over €1 million (£864,000) pay an additional 4%.
- Social surcharges of up to 17.2% on employment, interest, rental income and capital gains.
- Property taxes – the Taxe Foncière, an ownership tax, is levied by the local municipality based on the nominal valuation of the residence.
- Wealth tax, or IFI, is payable against wealth of €1.3 million (£1.12 million) or above, calculated against assets from €800,000 (£691,000) and incorporating global property assets for tax residents.
Finally, your pension income may be subject to income tax, including UK State Pension and private pension earnings. While the State Pension is not taxable in the UK, it may be taxable in France.
Pensions are taxable at the standard income tax rates after an initial deduction based on a 10% allowance of up to €4,123 (£3,560) per household. Social security contributions can extend up to 9.1% on pension earnings, which is reduced to 7.4% for low pension incomes.
Should you hold more than one private pension or receive personal UK pension income in addition to the State Pension, the total benefits will be added to arrive at the chargeable tax rate.
Planning for Retirement in France
As we have seen, there are multiple considerations around where you live in France, how you factor in tax exposures, and the type of retirement visa you may be eligible for.
We advise working with an experienced financial adviser with in-depth knowledge of the French and UK tax systems to ensure you make confident, informed decisions about your retirement plans.
For more information about retiring to France from the UK, financial advice or to arrange a convenient time to speak with one of the Chase Buchanan wealth managers based at our French offices in Bordeaux, please get in touch.
*Information correct as at January 2024