How Taxes Work When You Move to France

Tax is the topic that causes the most anxiety among people planning a move to France — and the most confusion. The system is manageable, but it is different, and the consequences of getting it wrong can be significant. This post explains the essentials for both US and UK movers. It is not a substitute for professional advice, and for both audiences, taking that advice before you move is genuinely important.

When Do You Become a French Tax Resident?

France uses several tests to determine tax residency, and meeting any one of them is sufficient. You are considered a French tax resident if:

• France is your main place of residence (your 'foyer') — where you and your family live.

• France is your main place of activity (where you work, even remotely).

• France is the country from which you derive the majority of your income.

The common misconception is the 183-day rule — the idea that if you spend fewer than 183 days per year in France, you avoid French tax residency. This is not reliably true. The foyer test, in particular, can apply even without 183 days of physical presence.

Important:  Determining your tax residency status is one of the most important steps to take before moving. Consult a cross-border tax specialist — not just a general accountant.

French Income Tax: The Basics

France operates a progressive income tax system with rates ranging from 0% to 45% on taxable income. Tax is filed annually, typically in May to June, for the preceding year. The system taxes household income jointly — a concept (the quotient familial) that can produce very different effective rates than filing individually.

Key income tax rates for 2025 (approximate):

• 0% on income up to €11,294

• 11% on €11,294 to €28,797

• 30% on €28,797 to €82,341

• 41% on €82,341 to €177,106

• 45% on income above €177,106

Social Charges (Prélèvements Sociaux)

On top of income tax, France levies social charges — currently 17.2% — on investment income, rental income, and capital gains. These can be partially or fully waived for non-EU residents who pay into social security in another country, but the rules are complex.

For US Residents: The Double-Filing Reality

The United States is one of only two countries in the world that taxes its citizens on worldwide income regardless of residency. Moving to France does not end your US tax obligations — you must still file a federal return every year as a US citizen living abroad.

The US-France tax treaty provides significant protections against double taxation. For most American retirees with no earned income, the treaty means:

• Capital gains, Social Security, pensions, 401(k)/IRA withdrawals, and US rental income are taxed only in the US — but must be declared on your French return.

• France grants a tax credit (avoir fiscal) that offsets French tax on income already taxed in the US.

• Earned income (salary, freelance) is taxable in France.

US Note:  You must also file FBAR (FinCEN 114) if your French bank account balance exceeds $10,000 at any point in the year. And FATCA Form 8938 may apply. These are not optional.

For UK Residents: Post-Brexit Tax Position

UK nationals moving to France must consider their tax residency carefully, particularly in the year of the move. The UK-France double tax treaty provides similar protections to the US-France treaty, covering pension income, rental income from UK property, and capital gains.

Key UK considerations:

• UK pension income (state and private) is generally taxable in France once you are French tax resident.

• Income from UK property rentals must be declared in France (though you may only pay tax in the UK on it, depending on the treaty interpretation and your situation).

• You should formally notify HMRC of your departure from the UK and complete a P85 form.

UK Note:  The UK-France tax treaty was negotiated before Brexit and remains in force. Your entitlements under it depend on your specific income sources and residency status — professional advice from a cross-border specialist is strongly recommended.

Wealth Tax (IFI)

France levies an annual wealth tax — the Impôt sur la Fortune Immobilière (IFI) — on net real estate assets held in France above €1.3 million. Financial assets (shares, bonds, pensions) are excluded. If you're planning to purchase high-value property, factor IFI into your calculations.

Inheritance Tax

French inheritance tax (droits de succession) can be significant, particularly for non-married partners and distant relatives. Spouses and civil partners pay no inheritance tax. Children receive a €100,000 allowance each. Planning your estate structure before moving is advisable.