Advice to property purchasers from Blevins Franks
Posted on 1 March 2020
Blevins Franks, our show sponsor and leading international tax and wealth management specialists, offers the following advice to prospective property purchasers during this uncertain Brexit period.
Understand as much as you can about your position under the different potential best and worst case scenarios in the areas of main importance to you – legal residency, subsidised healthcare qualification and impact on pensions.
Almost all scenarios for leaving the EU means UK nationals spending more than 3 months a year in France will be required to apply for a temporary (annual) residency card, which can be renewed each year, and after 5 years replaced with a permanent residency card (valid for 10 years). Under Theresa May’s and Boris Johnson’s deal, the requirements, both administratively (paperwork) and financially (income required per annum so as not be a burden on the French social security system) are lower than if the UK was a regular “third state”, like South Africa or similar. A no-deal scenario might reflect these more onerous rules.
From a healthcare cost perspective, a deal would currently allow the continuation of the S1 system, whilst a no-deal would not. The new rules around PUMA (protection maladie universelle –French health care), minimum income levels and social charge payments on investment income might mean the cost of qualifying for French subsidised healthcare through this route rather than S1 are not that costly, but it is something that needs to be considered and costed out.
With regard to pensions, under the current deal the UK state pension would still benefit from “triple-lock” when received by a UK national living in France. Under a no-deal, the UK State Pension would become frozen at the amount you receive in the year you leave the UK. With regard to private pensions, at the end of the transitional period, or if the UK leaves on a no-deal, the UK may well choose to extend the 25% exit charge to people who move to the EU (as currently occurs for those who move to non-EU countries), and choose to transfer their qualifying UK pensions to a QROPS (qualifying recognised overseas pension scheme).
Overall, Blevins Franks advice is that if you are choosing to move to France during this period, be aware of the various different scenarios you could be in under whichever Brexit outcome could eventually transpire, but where this is within your control, moving during the transitional period may well be the most beneficial time.
On this basis:
- You can move to France in advance of applying for a residency card
- You can then apply in France for a residency card (rather than in the UK, which would be the requirement if we were a “third state”)
- You can do this then at your leisure over the remainder of the transitional period, and up to 6 months after this period has concluded (rather than having to do this either before you move, or within three months of moving)
- The terms under which a residency card and subsidised healthcare will be approved are far more lenient than they are likely to be under a “third state” situation or the rules to be negotiated for post-Brexit arrivals
- A residency card issued under the current terms will be exchanged for a new-style card once the new rules have been introduced
- Once residency has been confirmed pre-transitional period end, all benefits under these rules are ring-fenced and grandfathered
Meet the team from Blevins Franks, the show sponsor, at The French Property Exhibition at Olympia London on 25-26 January and don’t miss their informative daily seminar “A New Beginning – What might change for UK expats moving to France?”