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DEALING WITH BREXIT

EXPLAINED: What Brits with EU partners need to know about returning to live in UK

While many of the 1.2 million Brits living in the EU have no immediate plans to return to the UK, circumstances can change. For those who have non-British partners heading home on a long-term basis could be more difficult than they imagined. We explain why.

Published: 25 August 2021 14:54 CEST

EXPLAINED: What Brits with EU partners need to know about returning to live in UK

Photo: Martin Bureau/AFP

Since Brexit, the UK has a strict immigration policy in place for EU nationals moving to the country and contrary to popular belief, even if they are married to a British national it does not exempt them from those requirements.

So whether you’re planning a move back to the UK with your non-British partner in the near future or whether you just want to keep your options open, here’s what you need to know.

Moving before March 29th 2022

If your moving plans are imminent, you should be able to meet the deadline of March 29th 2022, which is an important cut-off point.

Thanks to campaigning groups like British in Europe, the UK government agreed to a grace period for Brits living in the EU to move back and bring their non-British spouses with them.

The March 29th date relates to the UK’s original exit date from the EU, and British in Europe is campaigning for an extension to reflect the several delays before the UK actually left.

This means the process is easier – but it’s still not simple.

First you must apply to the Home Office in the UK for an EU Settled Status Family Permit. This must be done before the move and the EU partner should not enter the UK until they have the permit.

Processing time for these permits vary, some people have reported it has taken several months, while others have had their application rejected and had to begin the lengthy appeals process.

Once you have the permit you can then make the move, and once in the UK the EU partner needs to apply for EU pre-settled status.

This application must be made before March 29th 2022 in order to benefit from the Settled Status system, which is now closed to all other new arrivals from the EU.

The advantage of this system is that the EU partner does not have to satisfy immigration criteria such as financial thresholds.

Moving after March 2022

If you move back to the UK with a non-British partner after March 2022, or you don’t get the application submitted in time, you fall under the new immigration regime.

This means that the EU partner will need a visa to enter the country, and in most cases this needs to be applied for before the move.

Some people think that being married to a Brit means more or less unlimited entry to the UK, but in fact this is not the case and the couple must comply with strict rules including minimum income levels. For people in low-earning professions, or those who are not able to work in the UK, this could effectively bar the non-EU partner from entering the country.

There are essentially two routes – the non-EU partner can apply for a visa in their own right, or the British partner can sponsor their partner for a visa

Own visa

The points-based system that now applies to EU citizens is the same as the system in place for non-EU nationals and essentially requires applications to gain a required level of points by things like earning enough money, having sufficient language skills or having certain skills or qualifications that the UK has a shortage of.

Find our more here.

Sponsored visa

There is also an option for the British partner to sponsor their EU spouse’s visa, but this too has a minimum income requirement.

The Citizens Advice Bureau in the UK lays out the following income thresholds British partners must earn in order to sponsor their EU national spouse.

Partner only – minimum of £18,600 a year
Partner and children – minimum of £18,600 a year plus £3,800 for the first child and an extra £2,400 for each child after that. The extra income for children only applies if the children do not hold British citizenship or have residence rights in the UK.

Income can come from savings, pensions, rental income or earnings – but only earnings in the UK are taken into account, so if you have a salary from the EU country where you have been living, this would not be taken into account.

This could also rule out – for example – someone returning to the UK in order to take care of elderly or ill family members, who may not be able to work while taking on caring responsibilities.

If you do not meet the income requirements you can make up the amount through savings, if you have a sufficient amount. This needs to be £16,000 plus an extra £2.50 for every £1 below the income threshold you fall. The savings must have been in your name for six months or more.

If you’re British and don’t have a foreign partner (or you’re willing to dump your partner for the pleasure of living in a country of drizzle and chunky chips) then you can move back at any time without the need for a visa.

Visits

Short visits back to the UK to visit friends or family are allowed, although the non-British partner will need to be aware of new travel rules since the end of the Brexit transition period, including the end of using national ID cards for immigration purposes – only passports are now permitted. The same applies to children.

But longer visits should be approached with caution to ensure that the non-Brit does not exceed their maximum allowed number of days in the country. The 90-day rule applies to EU nationals visiting the UK, but the UK rules allow 180 days together, they don’t need to be divided into two sets of 90 like in the EU.

There are also reports of EU arrivals being grilled by immigration officials on arrival and some people who said they intended to, for example, help with childcare for their family were treated as unauthorised job-seekers and detained, so be sure you are very clear that you do not intend to work while in the UK.

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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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