Relocating to France can be an exciting shift in lifestyle, culture and priorities, but the financial implications are often far more complex than many expect.
From the way UK investments are treated to decisions about moving money, pensions and planning for short, medium or long term stays, the French financial landscape can feel unfamiliar without clear guidance.
This article explains the essential financial considerations for people moving from the UK to France, helping you navigate tax residency issues, investment options, banking choices and long term planning.
Disclaimer
This article is intended to provide general information only and should not be considered personal financial advice. French and UK tax rules are complex and change frequently. You should seek independent advice before making any decisions.
Understanding French residency and why it matters
French tax residency is determined by clear criteria. You may become tax resident in France if any of these apply:
- Your main home is in France
- Your professional activity is carried out in France unless it is incidental
- France is the centre of your economic interests which is a key element if you ever wish to apply for French citizenship
- You spend more than 183 days in France in a calendar year
Once you meet the criteria, you will generally be liable to French tax on your worldwide income and gains. This is the point at which your UK investments, pensions and bank accounts become relevant to the French tax authorities.
In addition, arrival mid-year can create split-year complexities, impacting how income must be reported in both France and the UK.
How UK investments are taxed in France
Taxation of ISAs
ISAs do not receive any special tax treatment in France like they do in the UK.
Once tax resident in France, income and gains from ISAs become taxable in France just like any other investment. You must declare income generated within the ISA even though it is tax-free in the UK.
General investment accounts (shares, funds, bonds)
French tax rules distinguish between income (dividends, interest) and gains. The default system is the flat tax of 30 percent, known as the Prélèvement Forfaitaire Unique (PFU). This comprises:
- 8% income tax
- 2% social contributions
This 30% PFU rate is under review currently and could potentially be raised to 36%.
It is possible to opt for progressive income tax rates, but this is a formal choice and can have wider implications. In order to make the right decision, you have to look at your marginal tax rate and compare it to the 12.8% income tax rate.
Where UK investments hold non-EU funds, you may face additional scrutiny. It is important to review fund structures before relocation, as France can apply higher tax treatment to certain fund types.
Capital gains on UK property
After becoming resident in France, the sale of a UK property may trigger French capital gains tax and social contributions, in addition to any UK CGT liability. Reliefs exist for main residences but only if it is your main residence in France at the time of the sale. Reporting in both jurisdictions is often required.
French investment options and how they compare to UK options
France has several investment structures that may be unfamiliar to people used to UK products.
Assurance Vie
Assurance Vie is France’s most common, flexible and tax-efficient long term savings structure. Benefits include:
- Tax deferral on gains until withdrawals
- Lower taxation on withdrawals after eight years
- Estate planning advantages with a significant advantage on inheritance taxation
- Broad choice of investment funds, including EU-compliant funds
It can be used for income generation, wealth preservation and long term financial planning.
Plan d’Épargne en Actions (PEA)
The PEA is one of France’s core investment wrappers designed to encourage long-term equity investment within the European market. It is often compared to the UK’s stocks and shares ISA, but the rules, restrictions and tax treatment differ significantly.
A PEA is available to French tax residents and allows you to invest in European shares and qualifying funds. While contributions are limited, the structure provides attractive tax benefits once the plan has been held for at least five years.
Key features include:
- Tax deferral: Gains, dividends and income generated within the PEA are not subject to income tax while they remain inside the plan.
- Favourable taxation after five years: After the five-year period, withdrawals become exempt from income tax. Only social contributions (currently 17.2 percent) still apply.
- Investment restrictions: Investments must be in eligible European companies or funds that meet specific criteria. You cannot freely select global equities or non-qualifying funds as you might in a general investment account.
- Contribution limits: Standard PEAs have a contribution cap, and PEA-PME (a version designed for small and medium-sized enterprises) has its own separate limit. Only one PEA and one PEA-PME per person allowed, with a maximum total investment of 225 000 euros.
- Liquidity rules: Withdrawals before five years trigger closure of the plan and can result in tax liabilities on accumulated gains. After five years, partial withdrawals are permitted without closing the account.
The PEA is generally suitable for people with a medium or long-term horizon, who are comfortable with equity market risk and want to benefit from favourable French tax treatment.
It is not suitable for short stays or for investors who prioritise international diversification outside the EU.
Livret de Développement Durable et Solidaire
Livret A and LDDS are regulated French savings accounts that offer simplicity, liquidity and guaranteed capital protection. They are popular for holding emergency funds or short-term cash but are not investment vehicles in the traditional sense.
Their returns are modest because the French government controls the interest rate and caps how much you can deposit. However, they remain useful for day-to-day banking needs, especially when first settling in France.
Key characteristics include:
- Tax-free interest: Interest earned is completely exempt from French income tax and social contributions, making them attractive for short-term savings.
- Guaranteed capital: Deposits are guaranteed by the French state, providing a very low-risk place to hold cash.
- Limited returns: The regulated interest rate is adjusted periodically and is often below inflation. These accounts should not be used for long-term growth.
- Deposit limits: Each account has strict deposit ceilings. Once these are reached, additional funds must be placed elsewhere.
- Immediate liquidity: Funds can be withdrawn at any time without penalty, making them ideal for emergency reserves or temporary cash parking.
For people relocating from the UK, Livret A and LDDS accounts are often useful in the early months when you need a secure and accessible place to hold euros while organising your finances.
However, they have no role in long-term investment planning and should not replace structured investment solutions.
Managing pensions when moving to France
UK workplace or private pensions
Payments from UK pensions are taxable in France once you are tax resident. The UK–France tax treaty means that the taxation right lies with France, not the UK.
Flexi-access drawdown income is treated as pension income, not capital. Lump sums are generally taxable. Before moving, it is sensible to review:
- How withdrawals will be taxed in France
- Currency conversion risks
- Long term sustainability of drawdown
Transferring pensions out of the UK
Pension transfers are often misunderstood and are not automatically beneficial for people moving to France. A transfer changes the structure, protections and future taxation of your pension, and should only be considered after a thorough review of your long-term plans.
The key points to understand are:
- ROPS/QROPS limitations: France does not host QROPS. Any transfer would need to go to another jurisdiction such as Malta or Gibraltar, adding cost as it will likely attract the Overseas Transfer Charge of 25%.
- No guaranteed tax advantage: A transfer does not create tax benefits in France. Withdrawals are still taxed there, often in the same way as UK pensions.
- Lifetime Allowance removal: One of the original reasons for transferring (avoiding the Lifetime Allowance) has disappeared, meaning the case for transfers is weaker.
- Currency considerations remain: Transferring does not eliminate sterling–euro risk. It may simply change how that risk shows up.
- Reduced protections: UK pensions are strongly regulated and protected. Moving them abroad can weaken consumer protection and increase costs.
For most people relocating to France, keeping their pension in the UK and planning withdrawals effectively is usually more sensible. This may involve timing conversions, using currency tools and integrating withdrawals with French tax planning.
Given the cost and potential irreversibility of a transfer, professional advice is essential before taking any action.
UK State Pension
You can claim your UK State Pension in France and it is index-linked while you live in the EU. It will be taxable in France under the UK–France tax treaty.
Moving money from the UK to France
Opening a French bank account early helps avoid administrative delays and enables you to receive salary, benefits or rental income in France. When moving larger sums of money, especially for property purchases or investment transfers, you should consider:
- Currency fluctuation risks
- French banking fees
- Exchange rate spreads
- The benefits of using a specialist foreign exchange provider
A specialist currency service can help lock in favourable rates, manage timing and avoid unnecessary fees, especially for high-value transfers.
Opening and managing bank accounts in France
Opening a French bank account early in your relocation helps avoid administrative delays and makes everyday life far easier. Direct debits, rent payments, mobile contracts and utilities usually require a French account, and some landlords will not proceed without one. Account opening can take longer than in the UK, so beginning the process in advance is advisable.
Most people hold a local current account for daily spending and combine it with savings or investment products that support their longer-term plans. Cross-border transfers are common, and using your UK bank for large movements of money can be expensive due to exchange rate margins and international transfer fees. For property purchases, investment funding or moving savings, a specialist currency provider may offer a better rate and guidance on the timing of transfers.
When choosing how to manage banking across both countries, consider:
- whether you need a multi-currency account to hold sterling and euros
- typical fees for international transfers and card use
- how you will manage ongoing currency exposure if income is paid in sterling
- whether your banking needs are short or long term, particularly if planning to stay in France permanently
If you’re unsure about which bank accounts are best for expats, check out our list detailed the best expat bank accounts available.
Short, medium and long term: why timing matters
Short term stays (one to three years)
Short term relocations expose you to immediate exchange-rate fluctuations because your financial life is unlikely to be fully aligned with France.
If your income remains in sterling while your everyday spending is in euros, your budget can shift dramatically month-to-month based purely on currency movement.
Short stays also leave little time to reorganise investments before French tax residency applies, and decisions made under time pressure often increase risk.
Key considerations include:
- Exposure to GBP/EUR volatility affecting daily affordability
- Concentrated risk if most assets remain sterling-based
- Timing issues if selling UK investments after residency is established
- Potential benefit of forward contracts for larger one-off transfers
Medium term stays (three to seven years)
Medium term moves are where currency exposure becomes structural rather than temporary. You may find yourself in a long period of earning, saving or holding pensions in one currency while living and spending in another.
Over several years, this imbalance can erode stability and complicate long-term planning.
UK investment wrappers also become tax-inefficient from a French perspective, prompting questions about whether to restructure holdings.
Important elements to review include:
- Sustained GBP/EUR exposure affecting income security
- Loss of ISA and UK investment tax advantages
- Market and timing risk when restructuring portfolios
- Exchange-rate impact if planning a French property purchase
Long term or permanent relocation
Long-term moves require aligning your financial life with a euro-based future. Over decades, currency movements compound, creating significant long-term risk if most of your wealth remains tied to sterling.
This is the point where diversification, euro-denominated investments and French structures such as Assurance Vie become central to planning. Long-term residency also brings succession laws, pension sustainability and inflation differences into sharper focus.
Long-term planning should account for:
- Gradual rebalancing towards euro-denominated assets
- Currency risk affecting pension drawdown and retirement income
- Succession law implications on cross-border estates
- Inflation and purchasing power differences over time
Quick checklist for organising your finances in France
- Confirm when French tax residency applies and how the UK–France treaty affects you.
- Review UK investments for French tax efficiency and consider whether restructuring is needed.
- Assess French options such as Assurance Vie and PEA for longer-term planning.
- Map income in sterling versus spending in euros and plan major transfers carefully.
- Understand taxation of your UK State Pension and private pensions in France.
- Open a French bank account early and use specialist FX for larger transfers.
- Review the impact of selling or keeping UK property, including French CGT exposure.
- Ensure insurance, health cover and estate planning align with French rules.
- Prepare for French annual tax reporting and keep documentation organised.
When to seek independent advice
You should seek specialist advice when:
- You will become French tax resident and hold investments in the UK
- You have UK property to sell after moving
- You plan to draw from UK pensions
- You are unsure whether UK tax or French tax applies to a specific type of income
- You want to use French investment structures but do not understand how they work
- You are planning short-term or long-term residency and need to structure your finances accordingly
We can introduce you to a trusted French tax or financial specialist for personalised guidance.
