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What are the changes to the 2024 French tax declaration?

A new section has been added to the 2024 French tax declaration, the finance ministry has announced, with declarations now open.

Published: 5 April 2024 10:20 CEST
Updated: 15 April 2024 09:31 CEST

What are the changes to the 2024 French tax declaration?

This year's French tax declaration will look slightly different. Photo by PHILIPPE HUGUEN / AFP

The annual task of completing the French tax declaration will be slightly different this year, with a new section added to the form.

The annual déclaration des revenus (income tax declaration) must be completed by almost everyone living in France – even those who have no income here – as well as some other groups including people living outside France who have some source of French income.

Explained: Who has to do a tax declaration in France

Declarations are now open and the deadline for filing is May or June, depending on where you live – full details HERE.

Once you have done your first online declaration the form remembers your previous answers, so for most people the annual task is a case of verifying that previous details are correct, and adding in anything that has changed over the past year.

READ ALSO The bumper 2024 tax guide

However this year there is a slight change of format, with an extra questionnaire added.

The tax office explained: “To remind property owners of their obligation to declare changes to the occupancy status of their property, a compulsory questionnaire has been inserted at the end of the online declaration process.

“Users who are property owners will be asked to indicate whether there have been any changes to the occupancy of their property. If so, they will automatically be directed to Gérer mes biens immobiliers (manage my properties).”

What does this mean?

This refers to a new requirement that was added last year – a form called the déclaration d’occupation that must be completed by everyone who owns property in France.

The declaration required people to update details of their property so that the tax office had the most up to date information, and then state whether their property was used as a main residence, a second home or rented out. This information was then used to calculate property tax bills.

The déclaration d’occupation is a separate process to the annual income tax declaration, and it seems that the new questionnaire has been added to the income tax declaration to ‘remind’ any property owners who have not done their declaration, or not updated it.

The questionnaire refers only to property that you own in France, property owned in another country does not need to be declared in France (although if it brings in any income such as rental income you do need to declare that).

In a slight change of format to the online declaration, the form begins by flagging up which sections you may need to fill in – based on your previous answers.

Tick boxes include having income in France, having income from overseas, having foreign bank accounts and owning property in France – if you have declared online before these will be already ticked based on last year’s declaration, so you only need to alter them if something has changed.

If you don’t own property in France – if you are living in rented accommodation in France, last year’s property tax declaration probably passed you by. The good news is that you still don’t need to worry about it – just make sure that there is no tick next to the question of whether you own property in France and that should be the end of the matter.

If you do own property in France – if you do own French property, an extra questionnaire has been added toward the end of the declaration, which will ask you whether anything has changed since you completed the property tax declaration. If you tick ‘no’ then that should be the end of the matter.

Changes that would need to be reported include a change in the use of the property – eg what was a second home is now your main residence, or you have rented out your second home on a long-term lease.

You also need to declare any significant changes that you have made to the property – eg building an extension, installing a swimming pool or adding another room. This is because property tax bills are calculated based on the rentable value of your property.

The property tax declaration itself is a one-off task, not an annual one like the income tax declaration, but you do need to update the declaration if anything has changed in the past year. You don’t need to wait for the income tax declaration to do this, you can do it at any time by logging in to your account at impots.gouv.fr and heading for the ‘bien immobiliers‘ section.

If you didn’t do a property tax declaration last year – the declaration was a new requirement last year and the deadline to have completed it was the end of August (albeit with several extensions). You may not have done one if you have bought property within the last year, if you had declared your property ‘uninhabitable’ to the tax office or if you simply didn’t realise that you had to.

If this is the case, it seems likely that your best option is to complete the property tax declaration first, before doing the income tax declaration – both forms can be found on the tax website at impots.gouv.fr – full details on how to complete the property tax declaration HERE.

The property tax declaration refers to the situation on January 1st 2024. So if you have bought property since then, you don’t need to complete the declaration until next year. Neither do you need to click yes to ‘owning property in France’, since the income tax declaration is concerned with the 2023 tax year.

Other changes

There are two other small changes to the income tax declaration this year, the tax office has announced.

Adult children – the first is if you have adult children who are still included in your household declaration – for example over-18s who still live you, including those who are away at university but still live with you during the holidays. A new requirement this year is that their main address must be included, if it is different to yours.

Tax app – the online tax service has an app as well as a desktop website and this year declarations can be done via the app. The tax office said this is limited to ‘simple’ situations.

They say: “You will be able to make certain changes to your tax return, such as removing/adding dependants, changing/adding a bank details details form and changing the amounts shown.”

Basically it seems like this one is – for now – limited to people who already declare online, have a simple tax situation with no overseas income and for whom nothing significant has changed this year. Others might be better off sticking with the website.

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6 pension questions British people should ask before retiring to France

Retiring to France is a dream for many, but before turning that dream into reality there are some serious financial questions that you need to ask yourself to ensure that your retirement is a financially comfortable one.

For most retirees, their main or only income will be a UK pension, so it’s important that you understand how your pension will work once you make the move.

There are some specific rules and restrictions on taking pensions out of the UK, while there is also the question of how UK pensions interact with the French tax system.

Financial adviser, Maeve Hoffman, from Spectrum IFA Group, emphasised that people should not take these decisions lightly, telling The Local: “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,” she said.

This article is intended as an overview of how the system works for UK pensioners and is not intended as a substitute for individual financial advice. The article is aimed at people who have worked most or all of their career in the UK and then intend to retire in France – the situation is slightly different for people who work in France and then retire here.

You can find an overview on French tax rules for pensions HERE.

Long-term or short-term

The first thing you need to carefully consider is whether or not your move to France will be for the long-term or short-term.

When it comes to your UK pension, there are some options that may be advantageous for French residents looking to stay here permanently, but they could make your life very complicated if you end up returning to the UK in the future.

Do not be afraid to ask yourself the tough questions – is there any chance you will have grandchildren in the future that you will want to be geographically close to? Have you ever spent a significant time in France, aside from short holidays? Do you have roots in France, such as friends, family or a home? If your health deteriorates, will you want to be cared for in France or the UK?

If are unsure about the answers to these questions, then take some time to really think about them. There are alternatives to permanently moving to France if you are unsure – for example, you could spend a few months a year here on a short-term visitor’s visa.

Understanding the different tax rules

British retirees should be aware that the UK and France have very different tax systems.

Once you become a tax resident in France, you have to file a yearly declaration, including your global income. The country that gets to tax that income is determined based on the tax treaty between the UK and France, which seeks to eliminate double-taxation.

As for your UK-based pension, the treaty states that 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. That being said, it will count towards your total household income, and could end up pushing you into a higher tax bracket which is something you should carefully consider, particularly if you want to take a large sum at once.

The same is not true of private pensions: these are 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.

You can find a complete guide to how UK pensions are taxed in France HERE.

As a result, you will want to think about whether your previous plans for your private pension were only advantageous to you as a UK resident. Once you become a French tax resident, they could have unforeseen implications.

You can find more information about tax rates in our tax guide.

Get reliable, expert financial advice before doing anything

If you have decided you want to be in France permanently, then you will need some expert tax and pension advice – but you need to be careful who you take advice from, this is a highly specialist area and it’s unlikely that high street financial advisers will have the knowledge that you need.

Brexit has also made getting financial advice more complicated, with fewer experts available.

Maeve told us: “Because of Brexit, you cannot use a UK-based financial adviser anymore – you have to use an EU-registered one. This has made things more complicated. When picking an adviser, seek out someone who has expertise on the local taxation rules in France. They should also be regulated with the financial regulator where you live and where they work.”

It can be especially complicated to parse out who you can and cannot take advice from – for example, some UK-based advisers have continued to give advice to EU-based clients, even though this can be particularly risky if the investments they recommend do not follow EU regulations.

There are also expat-oriented financial advice services that are located outside of France, but seek to offer tax advice to people in France.

She added: “Be smart and sensible. If you choose an adviser in Dubai or Spain for example, you will now be adding another regulatory organisation into the mix, plus another language.

“There are free, government-based services in the UK that can help you understand your private pension – Pension Wise and Money Helper. Before doing anything, you should consult the free services. Any financial adviser worth their salt would recommend this too.

“These services have begun to have longer wait times, so be sure to book well in advance of when you plan to draw from your pension.”

Deciding whether to transfer your pension

Another question that is important for Brits to think about is whether or not to transfer their pension into either a UK-based SIPP for non-residents, or a QROPS (Qualifying Recognised Overseas Pension Schemes).

The SIPP will keep your pension in the UK, while the QROPS moves it out of the UK, to Malta specifically.

These options can be helpful for French residents, but you need to familiarise yourself with their benefits and drawbacks.

“The QROPS is not for someone who is unsure of their future in France, as if you return to the UK within five years of the pension transfer HMRC will seek their tax back as if it was a full encashment,” Maeve said.

In France, a QROPS is considered a trust, you may also have additional reporting requirements to fill out along with your annual declaration (more info here).

You should beware of scams on this subject, as the post-Brexit period saw many scammers seeking to persuade Brits that it was now mandatory to transfer their UK pension – always be wary of any cold-calling or unsolicited financial advice.

Determining how you will want to draw from your pension

The next question is how you want to receive your pension – either as regular income or as a lump sum. The option that you chose will have tax implications in France.

If you receive it as a regular income, 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. Technically, French tax authorities would allow a return of once off pension capital to be taxed at a flat rate of 7.5 percent.

But in reality, Hoffman explained that anyone seeking to do this would need the express, written confirmation from French tax authorities that this rate will be applied.

She also explained that the type of private pension matters when seeking to get the lump-sum flat rate.

“There are plenty of different types of private pensions in the UK, but the old ‘defined benefit schemes’ have been the gold-plated standard. These are the types of pensions that give you a portion of your salary for the rest of your life.

“In principle, you should be able to take out lump-sum of 25 percent of your ‘defined benefit scheme’ pension and be taxed at the 7.5 percent flat-rate. That being said, some people get refused, so you cannot make any assumptions and you need clarification from the French tax office.

“As for all of the other types of private pensions in the UK, like the money purchase or personal pension schemes, these are considered to be ‘funds’. If you want to benefit from the lump-sum then you would have to take out the entire pension. You would not be able to just take out 25 percent and get the lump-sum rate.

“For anyone considering taking their whole pension and seeking to use the 7.5 percent rate there are conditions to be met, so I advise people to write to their French tax office and explain their own situation in detail. Be sure to clarify the tax rate you are seeking to have applied and ask what documents they would need from your UK pension company to confirm that the contributions to this pension have been tax deductible.”

Healthcare and social charges

Deductions in France come in two types – impôts (income taxes) and prélèvements sociaux (social charges).

People who retire to France (and have never worked in France) and have already reached the state pension age can apply for the S1 – this means that the UK continues to pay for their healthcare costs and they would not be charged prélèvements sociaux. Non-working spouses of an S1 holder can also benefit from this.

People who take early retirement and make the move before they reach state pension age may have to pay social charges in addition to taxes until they reach the state pension age and can apply for their 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.

Social charges help pay for a lot of services from the French government, including access to healthcare. In France, you can access the state healthcare system (and get a carte vitale) after three months of residency.

READ MORE: Why you might get an unexpected French health bill

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