When preparing to move your life to France, you may be thinking about all the advantages of the French way of life. Mediterranean weather, local wines and vast swathes of green countryside and golden beaches. You probably aren’t thinking of one key tax benefit you’ll leave behind in the UK. 

However, if you pay into an ISA (Individual Savings Account) and don’t protect your money, your move could cost you. Many British buyers don’t realise that selling UK assets after becoming a French resident can lead to unexpected tax bills and mountains of paperwork. Failing to prepare could mean paying far more than necessary. 

Failing to prepare your finances can cost you significantly

Tax-free to tax-filled

“The biggest mistake is not selling your ISAs and premium bonds,” Holborn Assets tax adviser Jean Pierre Çarçabal told us in a French tax tips webinar.  

In the UK, your ISA (Individual Savings Account) is a tax-free account that encourages you to save up to £20,000 a year. However, it’s not available in France. 

“In France, ISAs are deemed as being equities and they’re not tax free,” Çarçabal says. “So, if you’ve had a stocks and shares ISA running for 20 years the French tax man will want a return in euros.” 

Most investment income in France is taxed at a flat rate of 30%, significantly eating into any gains earned from your ISA.  

You are also no longer allowed to contribute to an ISA once you become a resident of another country, so the amount in your account will remain fixed until you move back to the UK. 

Perhaps even worse is the paperwork. 

You will need to document every ISA transaction since opening your account

Paperwork is hell: sell, sell, sell

“You’ll have to fill in a 20-year history spreadsheet,” Çarçabal says. “It’s a nightmare. Sell the ISAs. Put it into an interest savings account [in France] for six months, one year. But sell the ISAs and premium bonds. That’s the main thing.” 

There are exceptions you may want to consider. You may want to keep the ISA open if you plan to return to the UK within five years. This saves you from starting your ISA again from scratch. But, even then, you should consult an expert because the tax on your savings may significantly diminish the account’s earnings. 

Also, if you work for the UK government, you’re allowed to invest in your ISA while abroad. This exception extends to your spouse, too. 

Anyone planning to move to France should carefully consider the timing of their financial decisions—particularly when it comes to selling UK assets and managing investments. A good way to explore what steps you should take is booking a free consultation with Çarçabal’s firm, Holborn assets.