What are pension options when moving to France?

When relocating to France, it is wise to weigh up the different options available to you and to look into whether you will benefit from moving your pension into another scheme.

If you are moving to France for good, you may well benefit from moving your pension into another scheme – such as a self-invested personal pension (SIPP) or Qualifying Recognised Overseas Pension Scheme (QROPS). Conditions always apply, but different types of pension scheme can, under the right circumstances, provide greater control over your pension and reduce your tax bill.

Self-Invested Personal Pension

An SIPP is a UK government-approved personal pension scheme which allows the investor to make their own decisions on a range of investments, such as:

• Overseas property
• Stocks and shares on a recognised exchange
• Futures and options traded on recognised future exchanges
• Authorised UK unit trusts
• Unlisted shares
• Investment trusts, subject to Financial Conduct Authority (FCA) regulation
• Commercial property
• Ground rents
• Residential property
• Gold bullion
• Tangible moveable property with a market value of less than £6,000
• Exotic assets like vintage cars, wine, stamps and art

Please note: some of these may be subject to tax charges.

When moving to France, you may benefit from moving your pension into a SIPP or QROPS.

There are four different types of SIPP:

• Deferred: A Personal Pension Plan where most/all assets are held in insured pension funds. Self-investment withdrawal is delayed/deferred until a later date.
• Hybrid: Some assets must be held in conventional insured pension funds, but the rest can be ‘self-invested’.
• Pure/Full: Offers unrestricted access to many acceptable investment asset classes.
• SIPP Lite/Single Investment: This is much more recent trend, and involves placing all funds in one main asset with much lower fees.

Qualifying Recognised Overseas Pension Scheme

A QROPS is an overseas pension scheme that meets the criteria set by Her Majesty’s Revenue and Customs (HMRC). You can transfer your UK Pension benefits into the scheme without incurring any unauthorised payments or paying additional charges.

You need to ensure you continue to make the best of your pension after your move to France

In addition to offering currency and investment flexibility, a QROPS is generally popular with British expats due to the tax advantages (taxation is reduced, and UK taxation can be avoided as long as they remain tax resident outside the UK), and because they can be transferred to a beneficiary of choice in the event of their death. During 2015, there have been some changes to the scheme affecting the countries involved, and the qualifying criteria. This should not have an effect on those transferring their pensions for living in France, but it will still be a good idea to speak to a Tax Advisor about this scheme and what you need to do to qualify. It is important to remember that the UK authorities will only allow you to transfer a pension abroad if the scheme meets certain criteria: you need to be living, or going to live, abroad, and you must remain living abroad. You should be aware that it will take around ten years of being a non-resident and moving the pension to a QROPS to show real benefits, making it really important to consider your options now rather than later. We can put you in touch with an authorised tax and financial advisory firm, who could advise you on financial planning and taxation when you move to France or own property there or why not call the Resource Team on 020 7898 0549.

If you continue to withdraw from your existing pension, it is important to look into using a currency exchange specialist who can make the best of your transfers.

Transfer your existing UK pension

If you will be relying on a UK-based pension/income from investments, it is very important to understand that currency exchange can pose a problem, as the exchange rates fluctuate on the live market. This means that the amount of euros you receive for your pension pounds will also fluctuate every month. In more recent times, expats living in France have seen their income rise due to the value of the euro weakening against sterling. This is where speaking to a currency exchange specialist such as Smart Currency Exchange can help you to plan ahead, stay on top of the markets and be able to budget more effectively.