Taxation for US and UK Expats Moving to France: What You Need to Know

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Moving to France offers an attractive lifestyle, but for US and UK expatriates, tax obligations can become complex due to differences between national tax systems and international reporting rules. Understanding how French taxation interacts with US and UK tax laws is essential before relocating.

1. Determining Your Tax Residency in France

France taxes individuals primarily based on tax residency, not citizenship.

You are considered a French tax resident if any of the following apply:

  • Your main home is located in France

  • You spend more than 183 days per year in France

  • Your primary professional activity is carried out in France

  • Your main economic interests are in France

Once classified as a tax resident, France generally taxes you on your worldwide income.

Non-residents are taxed only on French-source income.

2. Key Differences for US and UK Expats

US Expats: Citizenship-Based Taxation

US citizens are subject to US taxation regardless of where they live. This means that even after becoming a French tax resident, US expats must:

  • File annual US federal tax returns

  • Report worldwide income

  • Declare foreign bank accounts and assets (FBAR, FATCA)

Double taxation is typically reduced through the France–US tax treaty, foreign tax credits, and income exclusions.

UK Expats: Residency-Based Taxation

UK nationals are taxed based on residency, not citizenship. Once you become a French tax resident:

  • UK tax obligations usually decrease or end

  • UK-source income (such as pensions or rental income) may remain taxable in the UK

  • The France–UK tax treaty determines taxing rights

The UK statutory residence test plays a key role during the year of departure.

3. Income Tax in France for US and UK Expats

French income tax is calculated using a progressive scale applied at the household level. Income categories include:

  • Employment income

  • Self-employment or freelance income

  • Investment income

  • Rental income

  • Pension income

France uses a withholding-at-source system, but all residents must still file an annual tax return.

4. Social Contributions: An Important Distinction

French social contributions (CSG and CRDS) often surprise new expats.

  • Employment and self-employment income may be subject to French social security contributions

  • Investment income may attract social charges of up to 17.2%

US expats may rely on the France–US Totalization Agreement to avoid double social security contributions.
UK expats may also benefit from post-Brexit coordination rules in specific cases.

5. Taxation of US and UK Pensions in France

Pension taxation is one of the most sensitive areas for expats.

  • UK state and private pensions are generally taxable in France once residency is established

  • US pensions (including 401(k) and IRA distributions) may be taxable in France, depending on treaty interpretation

  • Government and public-sector pensions often follow special treaty rules

Careful classification of pension income is essential to avoid incorrect taxation.

6. Foreign Assets and Reporting Obligations

French tax residents must declare:

  • Foreign bank accounts

  • Investment and savings accounts

  • Trusts and certain insurance products

US expats must comply with additional US reporting (FBAR, FATCA), even after moving to France. Penalties for non-compliance can be significant in both countries.

7. Capital Gains and Investments

US and UK expats in France may be taxed on:

  • Capital gains from securities

  • Sale of real estate (including foreign property)

  • Cryptocurrency gains

France applies a flat tax or progressive rates depending on the income type. Certain exemptions apply, particularly for a main residence.

8. Property Ownership and Wealth Tax

Real Estate Wealth Tax (IFI)

French tax residents may be subject to the IFI if their net real estate assets exceed the applicable threshold. Non-residents are taxed only on French real estate.

Local Property Taxes

Property owners may be liable for:

  • Taxe foncière (ownership tax)

  • Taxe d’habitation (still applicable in specific situations)

9. Common Pitfalls for US and UK Expats

  • Confusing citizenship with tax residency

  • Overlooking social contributions

  • Misreporting pensions or investment income

  • Failing to declare foreign accounts

  • Not planning the year of arrival correctly

10. Preparing Before Moving to France

Before relocating, US and UK expats should:

  • Review tax treaty provisions

  • Assess pension and investment structures

  • Plan the timing of their move

  • Seek advice from professionals familiar with both systems

Conclusion

For US and UK expats, moving to France requires careful tax planning. While France offers a structured and predictable tax system, differences in residency rules, social charges, and reporting obligations can create complexity. Understanding these rules in advance helps ensure compliance and avoid costly mistakes.

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