France is often seen as a high tax country but many groups of people, such as pensioners, semi-retired and those living off a combination of capital and pension will find they are actually better off living there than in the UK. These days it is not easy to keep track of the fluctuating world economy and interest rates and it is absolutely vital to have proper guidance from a tax expert when you are thinking of moving to France or buying a second home there.

Firstly, if you are planning to live in France, you should ask the Inland Revenue in the UK for form P85 which will finalise your English tax affairs.  Next, contact the Department of Work and Pensions in Newcastle to find out about your entitlement to a state pension, bearing in mind that anyone retiring after 2010 will find the qualification for a maximum pension is reduced from 40 years’ National Insurance contributions to 30 years which is good news.

If you are going to be resident in France then any tax benefits from shares or ISAs will not be available so it may be wise to realise any gains before moving, safe in the knowledge that you there are plenty of deposit and savings accounts available for French residents.

It is your responsibility to declare the fact that you are a French resident to the local tax authorities. When it comes to French inheritance tax, this may not be as bad as you imagine and there are ways of reducing any liability to French inheritance tax being passed on to your children.

Regarding income tax, the main difference is that in France the tax is applied to the whole household and this means a retired couple or those with children should be better off than in the UK. If you have sold up in the UK and plan to live on capital then you will be entitled to large amounts of income and pay very little tax.

Do note that the French government has changed the Capital gains tax rules on second homes.  They have extended the period of full relief from 15 years to 30 years with taper relief as the years go by. The legislation will not be finalised however until February 1st 2012.

It is important to note that if you own property and other assets in France and you are not a French resident, they will still be subject to French succession tax when you die as well as being part of your estate for UK inheritance tax.

The whole question of taxation is something which many people find something of a burden, not only to pay but to understand! We highly recommend seeking the advice of a qualified tax expert, ideally who is regulated by the Financial Services Authority in the UK and also totally familiar with taxation in France. The UK-based law firm, Ashton Graham (www.ashtongraham.co.uk) will be able to help you.

It is so important to take advantage of everything you can so that you are living in a tax efficient manner. Taxation issues can be extremely complex and, of course, are subject to change so advice taken at the beginning will stand you in good stead for your future life in France.