"Expatiating to France: taxation, wealth management, and pitfalls to avoid"

Whether you are French or foreign, retired or still professionally active, if you currently reside outside France but wish to settle in France, this article is for you.

We will mainly cover financial topics to support you in managing your wealth and anticipating major issues: investments, retirement, succession, taxes…

Tax Residence and Income Tax Return

In France, you are considered a tax resident if your household, your economic interests, or your primary residence are in France (even if you spend less than 183 days a year in France).

Your tax residence determines the taxation of your worldwide income (salaries, rents, dividends, capital gains…), which you must therefore declare to the French tax authorities.

On this point, check whether France has signed a tax treaty with the country where you used to reside: there is a high probability that this is the case, as France has signed tax treaties with more than 120 countries. This will prevent double taxation on your foreign-source income.

In addition, you must declare bank accounts opened, used, or closed abroad (via Form 3916), failing which you may face penalties (up to 5% of the undeclared balance). This obligation also applies to trusts and other foreign structures (Form 2181).

Familiarizing Yourself with French Taxation

• Your income will be taxed according to a progressive scale (up to 45% for the highest brackets in 2026). In addition to this tax, investment income (dividends, capital gains, rents, etc.) is subject to 18.6% in social security contributions.

• Real Estate Wealth Tax (IFI): If your net real estate assets exceed €1.3 million, you will be liable for the IFI. Property located abroad is also affected… unless a tax treaty prevents it.

• Property and Housing Taxes: If you own real estate in France, budget for these local taxes (the housing tax—taxe d'habitation—has been abolished for primary residences but remains for secondary residences).

Organize/Reorganize Your Financial Investments

Regarding your investments abroad: generally speaking, the gains generated by your investments become taxable in France as soon as you become a tax resident. Consequently, it can be very advantageous to sell these investments before becoming a French tax resident to benefit from a more favorable tax system. For example, capital gains on securities in the UK are taxed at rates of 10% and 20% (depending on the amounts), compared to 31.4% in France.

Life insurance policies (assurance-vie) taken out abroad can be tax-advantageous, but their taxation in France depends on their seniority and location. Find out about the applicable surrender and tax rules. Similarly, be careful if you hold certain foreign contracts (e.g., SIPP, QROPS), as these are often less tax-advantageous in France than French contracts (e.g., a French assurance-vie after 8 years).

Furthermore, as a French resident, you will have the opportunity to open other accounts, such as the PEA (equity savings plan), the PER (retirement savings plan), or various savings accounts.