French Tax Changes 2017
As always, the French parliament was very busy during December with its annual round of tax changes, although compared to previous years, there are only a small number of personal tax changes.
The income tax bands have been revised in line with inflation and so will only make a small difference to the resulting income tax. However, with the weakness in Sterling throughout 2016, taxpayers receiving UK pensions should see a reduction in their tax bill, as a reflection of lower levels of income in Euro terms. The benefit of this should not be underestimated, as in certain situations, this can also lead to reductions in French property taxes. An added benefit this year is that some households will be granted a 20% tax reduction.
From 1st January 2018, France will change to a more modern system of collection of income tax, by taxing income as it arises. Transitional arrangements have been introduced, which will effectively result in some elements of 2017 income not actually being taxed!
There are no changes to wealth tax rates or to the capital gains tax rules for financial assets and real estate. Social charges also remain at 15.5% for investment income and capital gains.
This year also sees the first exchange of information between tax authorities under the OECD Common Reporting Standard. Hence, now more than ever, it is essential that French tax residents report all information about foreign bank accounts and life assurance policies
A more detailed summary of the tax changes can be found on our website at http://www.spectrum-ifa.com/french-tax-changes-2017/
In addition to the French tax changes, this month also sees the inauguration of Donald Trump as US President. Other important political events in 2017 include several presidential and parliamentary election throughout the EU, including France and Germany.
However, much closer to our hearts, the UK Supreme Court is expected to deliver its decision this month on the government’s appeal against the High Court’s Article 50 ruling on Brexit. This is not about overturning the result of the Referendum, but about whether or not the government has prerogative powers to invoke Article 50 to start the Brexit process.
There are also the general economic prospects for the year ahead to consider. For example, what will happen with interest rates? How will investment markets react to the political changes on the horizon and of course, the Brexit saga?
Clearly, we have an ‘interesting’ year ahead and so as we go forward into 2017 and face the challenges that it presents, I would like to wish everyone a Happy New Year.
If you would like to discuss how the French tax changes may affect you, or you would like to have a confidential review of your financial situation, please contact me by e-mail at firstname.lastname@example.org or by telephone on 04 68 20 30 17.
The Spectrum IFA Group advisers do not charge any fees directly to clients for their time or for advice given, as can be seen from our Client Charter at
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