Abolition of the wealth tax for financial investments, taxation of financial income at 30% flat rate, the French tax climate on wealth has improved so much since the last presidential election that many taxpayers who left France during the last twenty years are beginning to consider their home country differently.
Some even question the interest of crossing back the Quiévrain, the Channel or the Vosges as Caesar crossed the Rubicon. Because in the meantime the competitive advantages of our neighbors have been reduced to a trickle: the 15-year limitation of the British regime applicable to « non-dom », the disappearance of the French-Swiss tax treaty on inheritance tax, the rise of the cost of Swiss tax packages for foreigners, attempts to tax private capital gains and taxation of securities accounts in Belgium, etc. And if Portugal and Italy offer interesting tax regimes to the wealthy taxpayers who settle there, who wants to live in a country he does not master the language? Countries that have also not showed exemplary management of their public finances…
So, why not France? Without being a tax haven, it is clear that our country is one of the few where a taxpayer consuming his wealth while housing his income (deriving from his assets or his business) in non-transparent structures (life insurance, company subject to corporation tax, etc.) will not be taxable on their capitalized income. Thanks to the cap on the Real Estate Wealth Tax, a taxpayer with significant assets, even in real estate, can avoid to pay any personal tax. With the guarantee that this will not change since the principle of the taxation of the only realized incomes (as opposed to deemed ones) has constitutional value since the decision n° 2012-662 DC.
There is however a big black hole: on the day of his arrival in France, the worldwide heritage of the taxpayer who wants to settle there will raise French inheritance tax, whose top marginal rate is 45% beyond € 1,805,677 per heir, which is very high compared to our neighbors. And once settled in France, the possible optimizations are difficult to implement for taxpayers with this profile: very often being retirees, the « Dutreil » law and its deduction of 75% on business assets seems out of reach. Remains the woods and forests, but one will easily agree on the difficulty of recommending this solution, except to a passionate hunter and still…
This major disadvantage can however disappear with an appropriate planning done BEFORE the return to France. Our firm has developed a strong expertise in this field and is at the disposal of individuals who wish to come – or come back – to settle in France but do not want the small tax haven they can build here to become big fiscal nightmare for their children.