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What changes for Brits in France in 2022?

Brits living in France have faced big changes since the UK left the EU, and things change again in 2022. Here's what you need to know.

Published: 20 September 2021 15:02 CEST
Updated: 28 December 2021 14:42 CET

What changes for Brits in France in 2022?

Photo: Sebastian Bozon/AFP

January 1st 2022

This is the deadline for all Brits who were resident in France before December 31st 2020 to be in possession of a carte de séjour residency card.

This does not apply to people who moved after that date – they come under the new regime of visas – but does cover all UK nationals who lived in France before then, even those who have been here a long time, are married to a French national or who previously held a European carte de séjour.

Brits in France were given an extension on the deadline to have applied for their new card – it was pushed back from June 30th to September 30th to allow late applications. January 1st 2022 is the deadline to be in possession of the card.

What happens from January 1st?

This is the date from which certain official functions cannot be performed without providing proof of your legal residency status – which is the rule already in place for all other non-EU citizens.

From this date you can legally be asked for the card in situations including;

Employers wanting to verify your right to work in France
Landlords of property you are renting
CAF offices if you are in receipt of any type of benefits
CPAM offices to confirm your right to healthcare in France
Police in any situation – French police can legally stop anyone on the street and request ID and, if applicable, proof of legal residency
Border officials if you are entering or leaving France

If you are unable to produce your card you can be denied non-emergency healthcare, work, benefits and accommodation and can legally be served with notice to leave France.

How strict is enforcement of this likely to be?

This is technically entering new territory, so no-one really knows how strictly France is likely to enforce the requirement for everyone to have their cards.

Spot checks and deportations of unregistered Brits seem unlikely, but what is very likely is that the next time you need to access any kind of official function you will be asked for the card, in the same way that Americans and Canadians already are for routine administrative tasks.

If you cannot provide the card it is likely that your request – whether it’s for work, benefits, a place to live or healthcare – will not be processed.

You are also likely to encounter difficulties with international travel, and if you cannot prove your right of residence when you enter or leave France, you are likely to be subject to the 90-day rule.

Are there any exceptions?

This applies to the vast majority of UK nationals who were living in France before December 31st 2020. Those who moved here after that date will need a visa and a carte de séjour. Brits who are visiting for less than 90 days in every 180 do not need either a visa or a residency card.

There are a couple of exceptions however, the main one is people who hold dual nationality with either France or another EU country (eg Ireland). These people do not have to apply for the carte de séjour, although they may if they want to.

Posted workers in certain circumstances and people in certain diplomatic roles are also exempt, while under-18s do not need a carte de séjour.

What else?

It can be hard to keep up with all the changes, so here’s a quick round-up of what else has changed and any actions you may need to take.

Driving – if you’re driving in France on a UK licence, you probably don’t need to swap that for a French one just yet. A deal finally concluded between the British and French governments earlier this year allowed people whose licences had been issued before January 1st 2021 to keep driving on them until either the photocard or the licence expired.

For most people, this means making a note of when the photocard/licence expires, and applying to swap for a French one once you get within six months of the expiry date. If your card has been lost or stolen, or you have a medical condition, or have committed a traffic offence, you may need to swap earlier – find the full details HERE.

Healthcare – most people living in France before 2020 had already registered in the French healthcare system and received their carte vitale. If you have not already done this, here’s how to go about it.

If you previously used an EHIC when travelling abroad, you will need to request the French equivalent CEAM (carte européenne d’assurance maladie) to cover any medical expenses when you are travelling in Europe. You can request this via your online Ameli account.

Taxes – Brits who were resident in France should always have been making an annual tax declaration and Brexit has not changed this. However many people – especially those whose income comes entirely from the UK – were not previously aware of this. You can check HERE whether you need to fill in the annual declaration form.

Travel – If you are travelling between France and the UK you need to be aware of lots of changes covering everything from car stickers to sandwiches for the journey.

Passports – British passports are now only valid for travel within the EU if they have up to six months left before they expire, and that includes the passports of Brits who live in France. If you are travelling to the UK with a French partner, family member or friend, they need to remember that they can no longer travel on an ID card, a passport will be necessary. And it’s not just people, rules on Pet Passports have also changed, although Brits who are resident in France can still secure an EU passport for their dog, cat or ferret from a French vet.

Member comments

Anonymous - 21 September 2021 at 14:48 CEST

I’m surprised that it’s only ‘several hundred people’ who are still waiting for their card. This whole system depended on one’s local préfecture not procrastinating. Because we followed advice to apply early, we waited nearly 3 years for our card to finally turn up – and that only happened finally because the Ministry in Paris came up with a nation-wide scheme that largely clipped the various time-wasting préfectures’ wings.

Ironically, the autonomy of each department’s préfet was one of the things that first attracted us to France but this whole Residence Card fiasco has demonstrated only too clearly that nation-wide issues should always be dealt with directly from Paris and not left up to the individual whims of local government.
1. Anonymous - 27 December 2021 at 12:43 CET
  
  Our experience in Finistere and the prefecture at Quimper was exactly the opposite. The staff were sympathetic, friendly and they got both the original card and its replacement done with no delay at all.
  1. Anonymous - 28 December 2021 at 18:13 CET
    
    Same at the SP in Draguignan (83), the whole process took less than 3 months from start to finish.
2. Anonymous - 28 December 2021 at 18:02 CET
  
  We originally applied using the pre Brexit website and were transferred to the new site almost 2 years ago. Our application was transferred from the Prefecture to the Sous Prefecture in Beziers at the same time. I have regularly emailed and received responses that usually say the same thing which is that the application is in process. In May this year they stopped responding and I am not allowed to go to the SP without an appointment so how to I get one? I have recently sent a registered letter and I am hoping for a response to that. One thing is clear and that is that it will not be sorted out by 1 January.
Anonymous - 28 September 2021 at 06:39 CEST

Tried again !! for a CEAM card but system not available…
Anonymous - 28 December 2021 at 18:36 CET

Prefecture de Police de Paris – marvellous. Application on 6 November, 2020, card issued early February, 2021. Immensely polite (and my French language is notoriously diabolical).
Generally, us Brits, a large number of whom did not have the right to vote in 2016 (remind anyone of the reason for the American War of Independence, taxation without representation?), have been treated very well.
Tomorrow I will face “Border Force” (whatever that means) at Gard du Nord. Anything like last time I hope not. Then they emulated Australian and American Immigration Officials; officious. Never had that with the Frogs.
Anonymous - 29 December 2021 at 01:15 CET

Here is a question that the local could pick up and find out the answer to
as the portal is now closed, how do under 18 get an article 50 card when they reach 18?
how do people who only got a short term residency card renew it?
Anonymous - 29 December 2021 at 12:39 CET

EHIC your information above is not fully correct CPAM still does not supply retired Brits with an EHIC card however the UK Government is duty bound under the BREXIT AGREEMENT to supply an EHIC (GHIC) card (New design features in it to show the difference from the old card) It definitely is valid in the EU for all retired UK people who are officially registered as EU residents. I know this for a fact – I, my wife and friends have such a card we applied and got it in 2021.
Anonymous - 18 January 2022 at 09:13 CET

I would suggest that organisations like the Local gather a list of all their contributors who have still not received their cards and pass the list to the French Minister for post-brexit Brits and the UK rep – ask them to encourage the Gouvt. to enforce all prefectures to finalise all cards in their process. I know it’s not as simple as that but someone needs to get some pressure on to it as it would seem many of us have had our cards very easily and quickly (Toulouse – no problem, so why Beziers?). Time to kick some rear end or to coin a Boris-ism: “Let’s get this done!” 🙂

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Explained: How are foreign pensions taxed in France?

France is a popular destination for people to retire to, and in most cases the retirees’ main or only income will be a pension paid from their home country.

So is this pension income taxed in France?

First steps

To determine whether you need to declare and pay tax on your foreign pension in France, the first question is whether or not you are a tax resident here (you can look through our guide).

If you are a tax resident of France, then you are required to declare all worldwide income – including foreign pensions – when you make your annual income tax declaration. Declarations are now open – find full details on how to fill it in HERE.

The next step is figuring out whether you will owe tax in France, and this will depend on several things;

the type of pension you receive (state pension, government employees’ pension, private pension)
where your pension is paid
how you draw your pension (lump sum or monthly payments)
the tax treaty between France and the country your pension is paid in.

This article is intended to give an overview of the situation for English-speaking foreigners living in France. It is highly recommended to get help from an expert financial advisor. You may also want to start by consulting our guide on pensions, if you have pensions from both France and either a non-EU country or an EU one.

Pension country

When it comes to taxation on foreign pensions, it all depends on the tax treaty between France and the country that is paying your pension, which is why the situation is significantly different depending on where that pension is paid.

In this scenario, your nationality usually isn’t important – the key thing is where the pension is being paid and the fact that you are now a tax resident in France. For most people, their nationality and the country that pays their pension will be the same (eg Brits receiving a UK pension) but not always, as some people may have worked in multiple countries before retiring to France.

This article is aimed at people who have worked in another country and then retired to France – the situation can be different for people who have worked in France and then retired.

US pensions

American retirees living in France benefit from a generous US-France tax treaty to avoid double taxation on all pension income, including private pensions.

To better explain the situation, The Local spoke with tax expert, Jonathan Hadida from HadTax.

“The reason we call France the bees’ knees for American retirees is because US-sourced pension income is only taxed in America. That means when you take money out of your 401(K) or IRA, those are taxable at your tax bracket in the United States.

“You have to report it on the US-side and pay US taxes at your marginal rate” Hadida explained.

“On the French side, US-sourced pension income is reportable in France for rate-purposes but benefits from a deemed credit.

“This means you put it on your French tax form, and you calculate the tax and you get a deemed credit equal to that. Ultimately, you wind up paying no French taxes on your US-sourced pension thanks to Article 18 of the US-France tax treaty”.

How do I report US-sourced pension income to French authorities?

Although you won’t end up paying French taxes on your US pension, you do need to tell the French taxman about it. The annual French income tax declaration requires you to declare all global income, including pensions.

International Financial Advisor, Bryan Dunhill with Dunhill Financial explained: “You fill it in within box 1AL or 1BL on form 20-42 on the French tax return, then you claim it in on the 8TK of the 20-47 to say it is US-based pension income, and then you will get a tax credit from the French.

“It goes in and it goes out on the French side. Being a US retiree in France is fantastic”, Dunhill said.

For both 401(K)s and IRAs, Americans in France should still keep in mind that early withdrawal (prior to the age of 59 and a half) can still lead to a 10 percent early distribution penalty. There are certain exemptions, such as first time homebuyers and higher education, but you should meet with a tax adviser to determine if you qualify.

What about social charges?

In addition to taxes (impôts), France also requires people to pay social charges (prélèvements sociaux) on income. However, only specific types of income can be considered for social charges, such as the CSM charge (PUMa) for healthcare.

The general rule is that pensioners and their spouses do not have to pay the CSM charge, but France specifically exempts people who have a pension from France, the EU, the EEA and the UK (people with S1 forms).

There is some debate over whether common types of American private pensions such as a 401(K) or IRA are treated as a pension (and therefore exempt from CSM) or as investment income (which can attract CSM charges).

Hadida told The Local: “Under the principle of equality amongst taxpayers, URSAAF has treated most US pensions/IRA distributions/401(k) distributions akin to a French/Swiss/European pension and have therefore exempted Americans with pension income.”

“I have called URSSAF, and I was told by the representative that they should be paying for PUMa. But in practice, I have not seen many American pensioners charged for it.

Canadian pensions

In Canada, the pensions system includes multiple tiers of public and private schemes, but luckily the double tax treaty between Canada and France is explicit about where pensions are taxed.

The Local spoke with Isaac Barchichat, a registered CPA in France, Canada and the USA to understand the situation for Canadians in France. He is a managing partner at Monceau CPA, an international accounting firm based in Paris with offices in the US and Canada.

He told The Local: “Tax treaties usually follow the OECD model, which means that Article 18 is usually focused on pensions.

“Article 18 for the Canada-France treaty is very similar to the USA-France treaty. This means that pensions are taxed in the country that they are issued in,” he said.

As a result, any Canada-based pension – whether that is the Old Age Security plan, the CPP (Canada Pension Plan) or QPP (Quebec Pension Plan), or a private personal or employer plan (such as Registered Retirement Savings Plans, or RRSPs) – would be taxed in Canada, not France.

Barchichat explained that Canadians in France should still declare their pension income in France. Like Americans, they will receive a tax credit from France attesting that they have already paid tax in Canada on their pension.

“People should still maintain proof that the pension was already subject to tax, in case of an audit,” he added.

Barchichat also recommended that Canadians resident in France can make use of the ‘mention expresse’ section in their French tax declaration.

“Sometimes French local tax authorities fail to assess foreign income properly. Using the ‘mention expresse’ allows you to specify to French tax authorities Article 18 from the tax treaty to ensure that they process your documents properly,” he advised.

What about social charges?

Similar to the situation for Americans (described above), the exemption for social charges specifies French, EU, EEA and UK pensions, not Canadian ones.

That being said, as Hadida mentioned above, French tax authorities often apply the same exemption normally intended for EU pensions to non-EU ones.

Barchichat, who is licenced in both the US and Canada, said that in his opinion neither American nor Canadian pensioners should be charged for prélèvements sociaux.

“If this happens, it is a mistake by tax authorities”, he added. You can learn more about contesting a CSM charge here.

UK pensions

Brits – or anyone else receiving a UK pension – have a very different situation to Americans and Canadians.

As per the UK-France dual tax agreement (PDF), whether you will be taxed in France or the UK depends on the type of pension – government/civil service pension or a private pension.

If you have a UK government or civil service pension (eg a state school teachers’ pension), then this will remain taxable only in the UK. Some old NHS pensions were considered ‘government pensions’, but modern ones might not be. You can check if your pension is classified as ‘government’ here.

You still have to declare this income to the French tax authorities, but you will not be subject to tax in France on it, although it does count towards your household income which can push you into a higher tax bracket.

The same is not true of private pensions: these are generally taxed in France, not the UK, as soon as you become a tax resident here. Confusingly, the UK state pension is also considered a private pension, even though it is paid by the government.

Normally private pensions are taxed upon distribution in the UK. Once you move to France, in order to avoid paying tax twice on the same income, most people fill out an NT form and sending it to HMRC (who will communicate to your pension company) to receive your British private pension in gross.

You can find a more in-detail look at the situation for UK pensioners HERE.

How do French taxes work?

If you have a private pension you will need to work out how it will be taxed in France, but this too is complicated as it depends on the exact pension type and whether you take the money as a lump sum or as regular payments.

If your pension is paid as a regular income, then when doing your yearly French tax declaration, you will add up your pension income for that year and you will be taxed at the normal marginal rates for income (the barème). These rates go up to 45 percent (for the highest earners only) plus social charges if they apply (more on this below).

Pension income can also benefit from a 10 percent tax deduction, as long as it does not exceed €4,123 or fall below €422 per household.

Lump sums are more complicated and depend on several factors including the pension type and how you take them – when deciding on this it’s highly recommended to get individual financial advice.

The Local spoke with financial adviser Maeve Hoffman, from Spectrum IFA Group, who said: “Figuring out what to do with your pension should be part of your wider financial plans for your life. This may be your most important asset, besides your home, and the best answer for what to do with your pension is highly individual. There are no sweeping generalisations when it comes to advice on private pensions. Everyone’s situation is different.

“You will want to start by considering whether you plan on being in France in the long-term. Some options could have serious consequences if you return to the UK shortly after.”

What about social charges?

People who have never worked in France and who retire to France once they reach the UK state pension age are entitled to as S1 – this status ensures that the UK continues to pay your healthcare costs are not charged prélèvements sociaux. Non-working spouses of an S1 holder can also benefit.

Those who take early retirement and move to France before they reach the UK state pension age may have to pay social charges until they are able to apply for the S1. However, there are several exemptions to social charges, so even if you expect a bill, you may not end up being charged. More information in our guide.

Australian pensions

The situation for Australians can be particularly confusing, largely due to the fact that Australia and France do not have a bilateral social security agreement (though there is an income tax treaty).

Let’s start off with the simple answer – if you receive a civil service pension from the government of Australia – meaning you were a federal or state public worker, then that pension is only taxed in Australia and it will not be taxable in France, though you will have to declare it along with all global income.

As for all other pensions – these are considered taxable in France.

There is another catch for Australians – the lack of a social security agreement means that Australians living in France may not be able to claim their Age Pension (assuming they qualify based on income constraints).

While you can be an Australian living in Austria, Belgium, Chile, Croatia, the Czech Republic, Spain or Estonia, among others, and still claim your Age Pension, this is not the case in France.

What’s crucial here is when you move – if you start receiving your old-age pension and then you move to France, then you may be able to continue claiming the pension. If, however, you move to France before you reach pension age, then you will not be able to claim it unless you move back.

A spokesperson for the Australian government told The Local in a previous interview: “To be eligible for Age Pension, a person must generally be an Australian resident and be in Australia at the time the claim is lodged, or in a country with which there is an International Social Security Agreement in place.”

There is no such agreement with France. And, despite the efforts of some of the thousands of Australians living in France to get politicians in both countries to act, there appears to be little urgency to change the situation, which means it could be some time yet before we are able to give you any good news on the pension front.

There are groups pushing for a social security agreement, such as the Facebook group ‘Australian Pensions in France’, which can also be a helpful place to connect with other Australians navigating tax complexities between the two countries.

What about superannuation plans?

The next complex area is the ‘superannuation’. While withdrawals from a ‘super’ can be accessed after becoming a resident in France, there are tax implications to be aware of.

The Local spoke with Martine Joly, chartered accountant and tax agent from Bilateral Solutions, who has experience working in both the Australian and French tax systems.

Joly explained that the challenge is that “the two systems are totally opposite. In Australia, pensions are done by capitalisation, with your employer paying into the superannuation.”

In Australia, the contributions were taxed when being deposited, so they are meant to be tax-free upon distribution.

However, France does not recognise this, so ‘super’ withdrawals are subject to tax here, even though in theory they have already been taxed in Australia.

To make matters more complicated, there are several different ways superannuation plans can be organised, but for the most part French fiscal authorities treat them as trusts.

This means that you may have additional reporting requirements each year, in addition to your annual French tax declaration, such as the “FORMULAIRE N°2181-TRUST2” which asks for the market value, as well as any accrued income, of the trust as of January 1st of that year.

If you are required to do this, then you will also have to name other people listed in the trust – whether they are ‘moral’ or ‘physical’ people. You will be required to give extensive information, including their dates of birth and addresses.

On top of that, you would also have to fill out an additional “event” declaration if a trust is created, modified or terminated. This must be done within one month of the event. This tax form is also available on the government tax site: FORMULAIRE N°2181-TRUST1.

How much can I expect to pay?

You will begin to be taxed when you start withdrawing from your super, and the way you are taxed will depend on whether you take payments in the form of an ‘income stream’ (periodic payments) or as a lump-sum.

If you take your super as an income stream, even though it is meant to be tax-free in Australia, you will still owe tax in France once it begins to be distributed. You would be charged at the progressive marginal (barème) rate for income tax, going all the way up to 45 percent (for the highest earners only).

If you try to avoid paying, be aware that “Australia will inform France”, as Joly explained.

“They communicate well and it will not be lost. So the French will realise if you have not paid any tax, because it is fully taxable in France. You have to declare this pension income,” she said.

As for lump-sum payments, whether or not you will owe tax in France depends on when you placed the super into your bank account.

“If you convert the super into a bank account prior to leaving Australia and becoming a tax resident in France, then this is not an income, it is a saving,” Joly said.

As such, you would not owe income tax on it, but you would still need to declare the foreign bank account to French tax authorities.

If you take your lump-sum super after moving to France and becoming a tax resident, then you would owe tax here upon distribution. As with UK pensions, lump sums are complex and you should get financial advice before making this decision.

Technically, French tax authorities may allow a return of once off pension capital to be taxed at a flat rate of 7.5 percent.

But in reality, anyone seeking to do this would need the express, written confirmation from French tax authorities that this rate will be applied. Similarly, you should be aware that this likely will not be possible if you have already begun drawing from your ‘super’, as the flat rate is often only available if the full amount is taken at once. Again, individual professional advice is highly recommended.

You can also find more information at the French tax website Impots.Gouv.Fr.

Joly pointed out a few other things Australians in France should be aware of – including the possibility you may owe the IFI (Impôt sur la fortune, or wealth tax) which considers whether you have property valued at €1.3 million or above.

“Due to high real estate prices in Australia, people just owning a small apartment in Sydney may not realise they would owe tax on this in France later on,” she said.

You should also keep in mind that Australia’s tax year runs on a different calendar year. France considers the period from January 1st to December 31st, while Australia looks at July 1st to June 30th.

This may make a difference when considering your tax residency.

What about social charges?

Australians have reported receiving social charges, in addition to taxes, for their superannuation income. That being said, there are several exemptions to social charges.

For example, if you are not working and your spouse is a recipient of an EU/EEA/UK pension (with an S1 form), then both of you would be exempt from paying the CSM health charge.

As the situation for Australians can be more complicated than nationals of other countries, it is highly recommended to seek expert assistance, particularly from someone who has qualifications in both countries and understands the tax treaty.

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