Portfolio and tax management for expats in France

Today’s investors have clear, well-informed opinions regarding their own specific investment objectives. They do not want to limit themselves to the internal funds offered by traditional investment providers. They prefer to build their own portfolio with the expertise of Blenheim Global Assets as their appointed investment adviser. Blenheim Global Assets manages portfolios that been designed for such investors, as it allows control and flexibility over the underlying assets in a portfolio, which may be subject to favourable tax benefits.

This article summarises the tax treatment of a French compliant Unit Linked Insurance policy, known as an Assurance Vie, and explains how an Assurance Vie can potentially help a policyholder with financial planning. At Blenheim Global Assets it is our understanding that the Assurance Vie will be treated as outlined in this document under French tax regulations.

The Assurance Vie provides a straightforward and effective way to bring together a wide choice of assets into one contract. It is designed to provide the flexibility and diversity required to enable you and Blenheim Global Assets to construct an investment portfolio that meets your specific needs with a wide range of assets – it is simple to establish and easy to operate.

Blenheim Global Assets allows you to select the assets in which you want to invest. You may select from any investment which Blenheim Global Assets considers to be sufficiently liquid and readily capable of valuation and which conforms to the laws and regulations applicable to your contract.

In general, any securities quoted on recognised exchanges such as stocks, shares and bonds are in principle eligible as well as Undertakings of Collective Investments in Transferable Securities (UCITS), Sociétés d’investissement à capital variable (SICAV) and other mutual funds.

Blenheim Global Assets’ experienced staff will take care of your investment administration through regular and comprehensive valuations.

French tax treatment
For residents of France, taxation is based upon worldwide income on a self-assessment basis regardless of the policyholder’s nationality. The family is taxed as a unit and returns are made for the unit.

Persons are deemed to be resident in France for tax purposes if any of the below applies:

  • their principal home is in France;
  • their main place of abode is in France;
  • they carry on a professional activity in France, salaried or not, unless they can prove that it is a secondary activity;
  • the centre of their economic interests and activities are in France.

French life insurance tax regime
The main elements of the French tax system applicable to individuals holding a life insurance contract denominated in account Units include the following:

Individual Income Tax

Social Security Contributions

Wealth Tax

Inheritance Tax

There are no time constraints on the duration of investment in the Assurance Vie. The contract can have multiple lives assured and in this case it will remain in force until the death of the relevant life assured.

You may access your capital in whole or in part at any time, although early encashment charges may apply in the early years of your investment. Payments of encashments are subject to receipt of sales proceeds from the underlying assets. It can be denominated in Euro, Sterling or US Dollar.

Regular Valuations
At each quarter end, Blenheim Global Assets will produce a valuation report detailing the value and number of the holdings within your contract. We will also provide an analysis of the asset split within your portfolio and of any transactions occurring on the underlying assets to which your portfolio policy is linked.

We believe the above information is accurate, however tax rates and rules can change, and we are NOT tax experts. Therefore, please do not rely exclusively on the information to determine your liability for tax.

Speak to a local tax expert for personalised advice, or consult an international taxation consultancy.

If you’d like our help to source someone to assist you, please get in touch and we will do all we can to help.

Whilst every care has been taken in the preparation of this article, Blenheim Global Assets cannot accept responsibility for its interpretation or any subsequent changes in taxation.

We recommend that investors seek advice from a local tax expert for personalised advice, or consult an international taxation consultancy regarding their own personal circumstances.

Also, please note that the tax rates presented above are expected to apply for 2017 and are subject to change.