International taxation

You have a client base waiting in France, a French partner, or simply the wish to build your business from Paris, Lyon or Bordeaux. Starting a company in France is not complicated in itself: registration is now online and there is no minimum capital for the most common company forms. The difficulty lies elsewhere. The legal form you choose decides how you will be taxed, how you can pay yourself and which social security regime you belong to. And because you come from abroad, your home country’s tax rules and the applicable tax treaty also come into play. This guide sets out what you need to know before starting a company in France.

Can a foreigner start a company in France?

Yes. French law does not reserve company formation to French nationals or residents. The rules depend on your nationality and on where you will actually work^[3]:

• nationals of the European Union, the European Economic Area and Switzerland may settle in France and set up a company under the same conditions as French nationals, with no residence permit required;
• other nationals may set up a company in France without living there; however, if they wish to settle in France or actually carry on their activity there, they need a residence permit authorising that activity, such as the « entrepreneur/profession libérale » card or the « talent – porteur de projet » card for project leaders^[3].

If you are moving to France with your business, your personal tax position changes too. Our guides to French tax residency rules and to the French impatriate tax regime explain when you become taxable in France and which relief may be available to newcomers.

Setting up a business in France: which legal form to choose?

Foreign entrepreneurs usually hesitate between a French company of their own (SAS or SARL, or their single-shareholder versions) and an extension of their existing foreign company (a branch or a subsidiary). Each option has different consequences for liability, tax and the status of the person running it.

SAS and SASU: the flexible company form

The société par actions simplifiée (SAS) is the form most often chosen by foreign founders and investors. It can have one shareholder (it is then called a SASU) or several, individuals or companies. Shareholders are liable only up to the amount of their contributions, and the articles of association can be drafted very freely: governance, share transfer clauses, investor rights. The company is subject to corporate income tax, with an option for personal income tax available under conditions^[1]. Its president has the status of an « assimilated employee », covered by the general social security scheme^[1].

SARL and EURL: the more framed alternative

The société à responsabilité limitée (SARL) has between 2 and 100 partners; with a single partner, it becomes an EURL. Its operation is more closely framed by law, which reassures some founders but leaves less room for tailored governance. It is subject to corporate income tax by default, with an option for personal income tax in certain cases, such as family SARLs^[2]. The status of its manager (gérant) depends on the shareholding: a majority manager is self-employed, while a minority or equal manager is treated as an assimilated employee^[2].

Branch or subsidiary of a foreign company

If you already run a company abroad, you can extend it to France in two ways. A subsidiary is a French company (usually an SAS) owned by your foreign company: it has its own legal personality, its own liability and is taxed in France like any French company^[9]. A branch (succursale) has no legal personality of its own: it is a French establishment of the foreign company, which remains directly liable for its debts. Its profits are nonetheless subject to French corporate income tax, because France taxes the profits of businesses operated in France^[9].

A branch is simpler to set up, but it has a tax feature that is often overlooked: the profits made in France by a foreign company are deemed distributed each year to shareholders outside France, which triggers a withholding tax under Article 115 quinquies of the French General Tax Code (CGI). Companies with their registered office in the EU or the EEA and subject to corporate tax there are exempt^[10]. Outside that case, each tax treaty decides whether the charge applies in full, is limited or is excluded^[15]. The France-US treaty expressly preserves it, at a rate capped at 5%, and removes it for US companies that meet the treaty’s tests for parent companies holding at least 80% of a subsidiary^[16]. The France-UK treaty contains no clause excluding or limiting it, and a French administrative court of appeal has held that its dividend article does not prevent the withholding from applying to the French branch of a UK company^[17]. In every case, the company can obtain a refund to the extent that its actual distributions are lower than the profits taxed, or are paid to French residents^[10].

How much capital do you need to open a company in France?

There is no legal minimum share capital for an SAS or a SARL: the shareholders set it freely, from 1 euro^[1][2]. Cash contributions do not all have to be paid on day one:

• in an SAS, at least half of the cash contributions must be paid up on incorporation, and the balance within five years^[1];
• in a SARL, at least one fifth must be paid up on incorporation, and the balance within five years of registration^[2].

A symbolic capital is legally possible, but rarely wise: a company whose capital is not fully paid up cannot benefit from the reduced rate of corporate income tax described below^[7].

How to register a company in France: the key steps

Since 1 January 2023, all company formalities go through a single online portal, the guichet unique (formalites.entreprises.gouv.fr), operated by the French National Institute of Industrial Property (INPI)^[4]. The formation itself follows four steps^[5]:

The registration file includes the articles, the identity documents of the directors, proof of the registered office and the certificate of publication of the legal notice^[5]. Documents issued abroad often need to be translated, which is worth anticipating.

Registered office: where to domicile your French company

Every company needs an address in France. Three options exist^[6]: the home of the legal representative, under conditions (it must be his or her main residence, and the lease or co-ownership rules must be checked); dedicated premises, under a commercial lease; or a domiciliation company, which must hold a prefectural approval and provides the address under a contract of at least three months. For a founder who does not yet live in France, a domiciliation company is often the practical solution at the start.

Corporate tax in France: standard rate and reduced rate

The standard rate of French corporate income tax (impôt sur les sociétés) is 25%^[7][8]. Under Article 219 of the CGI, small companies benefit from a reduced rate of 15% on the first 42,500 euros of taxable profit per twelve-month period, provided that^[7]:

• turnover does not exceed 10 million euros;
• the share capital is fully paid up;
• at least 75% of the capital is held continuously by individuals, or by a company that itself meets these conditions.

The last condition matters for foreign groups: a French subsidiary owned by a foreign company qualifies only if that parent company itself meets the conditions. A subsidiary of a large group will therefore usually pay 25% from the first euro.

[…] for taxpayers whose turnover during the financial year or tax period, adjusted where appropriate to twelve months, does not exceed 10 million euros, the rate of tax applicable to taxable profit is set, within the limit of 42,500 euros of taxable profit per twelve-month period, at 25% for financial years beginning in 2001 and at 15% for financial years beginning on or after 1 January 2002.

Article 219, I, b of the French General Tax Code, current version, unofficial translation ^[7]

VAT when starting a business in France

A French company charges VAT (TVA) on its sales in France. The standard rate is 20%, with reduced rates of 10% and 5.5% for certain goods and services and a special rate of 2.1% for, notably, press publications and reimbursed medicines^[8]. Very small businesses may benefit from a VAT exemption scheme (franchise en base): in 2026, the turnover thresholds remain 85,000 euros for sales and accommodation and 37,500 euros for services^[14], but they then cannot recover VAT on their purchases. A company that invests early or sells to businesses is often better off registered for VAT from day one.

Director’s salary or dividends in France: how to pay yourself

As the director of a French company, you can be paid in two ways, and the right balance between them is one of the most important decisions of your first year.

• Remuneration for your role as director is a deductible expense for the company. It bears social security contributions and is subject to personal income tax.
• Dividends are paid out of profit after corporate income tax. For an individual shareholder taxable in France, they are subject in 2026 to the flat tax (prélèvement forfaitaire unique, PFU) of 31.4%: 12.8% income tax and 18.6% social levies. The shareholder can instead opt for the progressive income tax scale, with a 40% allowance on the dividends^[11].

One trap concerns the SARL: for a majority manager, the portion of dividends received by the manager, their spouse or civil partner and their minor children that exceeds 10% of a reference amount is subject to self-employed social contributions. That amount is the share capital held by those persons, share premiums included, plus the sums in their shareholder current accounts^[2][18][19]. In an SAS, dividends are not subject to social security contributions, only to the 18.6% social levies^[1]. If you remain resident abroad, dividends paid by your French company follow different rules, combining French withholding tax and the treaty with your country of residence.

Social security status of the company director

The president of an SAS or SASU, and the minority or equal manager of a SARL, are assimilated employees: they are covered by the general social security scheme, but not by unemployment insurance^[1][2]. The majority manager of a SARL and the sole partner managing an EURL are self-employed and pay contributions calculated on their professional income^[2][12]. According to Urssaf, assimilated employees enjoy the same protection as an employee with executive (cadre) status and owe no contributions while they draw no salary, whereas self-employed managers pay contributions from the start, on a flat-rate basis for their first two years and with minimum contributions even when their income is low or negative^[20]. If you keep working partly in your home country, EU coordination rules or a bilateral social security agreement may determine which country’s scheme applies.

Tax treaties and permanent establishment: doing business in France from abroad

Many foreign entrepreneurs start by serving French clients directly from their home company, without any French structure. This is possible, but it carries a risk: creating a permanent establishment in France without realising it. Tax treaties generally define a permanent establishment as a fixed place of business through which the business of an enterprise is wholly or partly carried on, such as an office or a branch. The 2008 France-UK treaty uses this definition and also covers agents who habitually conclude contracts in France on behalf of the foreign company^[13].

The profits of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein.

Article 7, paragraph 1 of the France-UK Double Taxation Convention of 19 June 2008, official English text ^[13]

Once a permanent establishment exists, the profits attributable to it are taxable in France: French law taxes profits made in businesses operated in France, as well as profits whose taxation a tax treaty allocates to France^[9]. Setting up a French company or registering a branch from the outset is often the cleaner route. The treaty also determines how your home country relieves the French tax, which is precisely where the coordination between two lawyers comes in.

Why your French lawyer and your home-country lawyer should work together

A French company formation is never a purely French matter for a foreign entrepreneur. Your home country will look at the same structure from its own angle: taxation of the dividends you receive, controlled foreign company rules, the residence of the company if it is managed from abroad, your own tax residence and your social security cover. A choice that is optimal in France can be costly at home, and the reverse.

This is why Alexis Germe, as a French tax lawyer, frequently works in tandem with the client’s lawyer or adviser in the home country. The French lawyer secures the French side: legal form, articles, corporate tax, VAT, director’s remuneration, treaty position. The home-country lawyer checks the consequences under local law. Together, they build a structure that works on both sides of the border, rather than two analyses that ignore each other.

Whether you are opening a subsidiary, moving to France with your business or testing the French market, French tax counsel for foreign founders helps you choose the right structure before the first invoice.

Planning to set up your business in France? Book a consultation with Alexis Germe to review your project: legal form, tax and social security position, treaty with your home country, and coordination with your own lawyer.

Sources and legal texts

1. Simplified joint stock company (SAS): what you need to know (entreprendre.service-public.gouv.fr)
2. Limited liability company (SARL): what you need to know (entreprendre.service-public.gouv.fr)
3. Can a foreigner set up a company in France? (entreprendre.service-public.gouv.fr)
4. Company formalities: a one-stop shop on 1 January 2023 (entreprendre.service-public.gouv.fr)
5. How to create a business? (entreprendre.service-public.gouv.fr)
6. Domiciliate a business and its activity (entreprendre.service-public.gouv.fr)
7. Article 219 of the French General Tax Code, current version (Légifrance)
8. Fiscalité des entreprises (impots.gouv.fr)
9. Article 209 of the French General Tax Code, current version (Légifrance)
10. Article 115 quinquies of the French General Tax Code, current version (Légifrance)
11. Taxation of dividends received by shareholders (entreprendre.service-public.gouv.fr)
12. One-person limited liability company (EURL) social contributions: what you need to know (entreprendre.service-public.gouv.fr)
13. 2008 UK and France Double Taxation Convention, in force (gov.uk)
14. VAT franchise en base: thresholds and conditions (entreprendre.service-public.gouv.fr)
15. BOFiP, BOI-RPPM-RCM-30-30-30-20, withholding tax on profits of foreign companies operating in France, effect of tax treaties (published 12/09/2012)
16. BOFiP, BOI-INT-CVB-USA-10-30, France-US tax treaty, paragraph 170 on French permanent establishments of US companies (published 16/09/2013)
17. Administrative Court of Appeal of Marseille, 1 December 2020, no. 19MA01504, Brecklane Limited, France-UK treaty of 19 June 2008, article 11(4) (Légifrance, JADE database)
18. Article L131-6 of the French Social Security Code, contribution base of self-employed workers, current version (Légifrance)
19. Article L136-3 of the French Social Security Code, II, 2°, dividends above 10% of capital, share premiums and current accounts, current version (Légifrance)
20. Choisir votre statut juridique : créer une société, social protection of the manager (urssaf.fr, in French)

You have been offered a senior position in Paris, your group is transferring you to its French subsidiary, or you plan to run a French company. Before you sign, check whether your move qualifies for the French impatriate tax regime. It can exempt a significant part of your salary and half of certain foreign investment income from French income tax until 31 December of the eighth year after the year you start work in France, but its conditions are strict and several must be met before you arrive. This guide explains who qualifies, what the regime is worth and the mistakes to avoid.

What is the French impatriate tax regime?

The French impatriate tax regime (régime des impatriés) is a temporary set of income tax exemptions for employees and certain company executives who come from abroad to work for a business established in France^[1][2]. It is laid down in article 155 B of the CGI, in a version in force since 31 December 2018^[1].

Employees and the persons mentioned in 1°, 2° and 3° of b of article 80 ter who are called from abroad to hold a position in an undertaking established in France for a limited period are not subject to tax on the elements of their remuneration directly linked to that situation or, on option, up to 30% of their remuneration.

Article 155 B, I, 1 of the French General Tax Code, first sentence, unofficial translation ^[1]

It offers three income tax advantages: an exemption for the impatriation premium, an exemption for the part of salary relating to work carried out abroad in the employer’s interest, and a 50% exemption on certain foreign passive income and capital gains^[1][7]. A separate rule of the CGI also protects new residents’ foreign real estate from the French real estate wealth tax (IFI) for five years^[8].

Two further rules concern pensions. First, contributions you keep paying abroad are deductible from your taxable salary: those to your home country’s compulsory social security scheme, where you remain affiliated under EU rules or a social security agreement, and, within limits and until 31 December of the eighth year after the year you take up your position, those to the supplementary pension and provident schemes you belonged to before arriving^[7][12][13]. Second, under article L767-2 of the Social Security Code, an employee called from abroad can ask, jointly with the employer, not to be affiliated to the French basic and complementary state pension schemes, provided they pay a minimum pension contribution elsewhere, set at €20,000 a year, and were not affiliated to a French pension scheme in the previous five calendar years^[7][14][15]. This exemption lasts three years, renewable once, and earns no French pension rights^[14].

Who qualifies for the French impatriate tax regime?

The five-year non-residence condition

You must not have been domiciled in France for tax purposes during the five calendar years preceding the year in which you take up your position, whatever your nationality^[1][3]. French nationals returning after a long period abroad can therefore qualify. The date of taking up the position is the date on which performance of the employment contract or corporate mandate actually begins in France^[3].

Employees recruited abroad or moved within a group

Two routes are possible^[3][7]:

• intra-group mobility: you are called by a foreign company to work for a French company with which it has capital, legal or commercial links, for example a transfer from a foreign parent to its French subsidiary;
• direct recruitment from abroad: a company established in France hires you while you are still living abroad, including when you applied from abroad to a French job offer.

The contract does not need to be fixed-term, nor to state how long you will stay in France^[7]. By contrast, people who come to work in France on their own initiative, or who had already settled in France when they were recruited, cannot benefit from the regime^[3][7]. Keep evidence that your home was still abroad when you were hired^[3].

Company directors, entrepreneurs and the self-employed

Besides employees, the regime covers executives treated as employees for tax purposes: in particular the chair of the board, chief executive officer and deputy chief executive officers of an SA or SAS, members of the management board, and minority or equal managing partners (gérants) of an SARL^[3]. A director may qualify even when holding shares in the company that recruits them, provided the pay is taxed as salary and the director remains taxed at least on the reference remuneration described below^[7].

Self-employed professionals, majority managing partners of an SARL and founders who are not paid under the salary rules fall outside the income tax regime, since article 155 B only covers employees and assimilated executives^[1][3]. Where a foreign company sends someone to France precisely to create the French company, the administration accepts that the host company may not yet legally exist on the date the position is taken up^[3][7]. Our guide to setting up a company in France covers the corporate side of this choice.

How long does the France expat tax regime last?

For anyone who took up their position on or after 6 July 2016, the exemptions apply until 31 December of the eighth calendar year following the year the position was taken up, for each year of French tax domicile within the meaning of article 4 B, 1, a and b^[1][2]. A move in 2026 therefore opens the regime until 31 December 2034^[7].

If your family home is settled in France by the end of the calendar year following the year you started, the salary exemption applies from the start^[3][7]. This tolerance does not extend to the passive income exemption^[3].

The regime survives a change of position within the same company or a move to another company of the same group, without extending its total duration. It ends, however, if you leave the host company or group before the end of the period, even if you remain resident in France^[3][7].

Moving to France tax benefits: the impatriation premium

Actual premium or 30% flat-rate option

The impatriation premium is the extra remuneration, in cash or in kind, directly linked to working in France. In principle it is exempt for its actual amount, which must appear distinctly in the employment contract, the corporate mandate or an amendment drawn up before you take up your position, or be determinable from objective criteria stated in it^[4][7].

Alternatively, you may opt for a flat-rate valuation: the premium is then deemed equal to 30% of your total net remuneration, even if the contract provides for no premium^[1][4]. Originally reserved for direct hires, the option was extended by the 2019 Finance Act to group transfers who took up their position from 16 November 2018, so it is now open to both^[4].

The reference salary rule

The exemption has a floor: the remuneration that remains taxable must be at least equal to the pay for similar functions in the same company or, failing that, in similar companies established in France. If it is lower, the difference is added back to your taxable income^[1][4].

Days worked abroad and the two exemption caps

The part of your salary relating to stays abroad made in the direct and exclusive interest of your employer is also exempt. Failing a contractual allocation, it can be calculated by reference to the number of days of activity abroad over the total days of actual activity, travel time excluded^[4]. Each year, you then choose one of two caps^[1][4]:

• a global cap: the premium and the foreign-work salary together cannot exceed 50% of total remuneration;
• or a cap on the foreign-work part only: limited to 20% of taxable remuneration, net of the exempt premium.

50% exemption on foreign passive income and capital gains

For the same period, the impatriate is exempt from income tax on 50% of: investment income (dividends, interest) paid by a person established outside France; certain intellectual or industrial property income paid from abroad; and gains on the sale of securities where the custodian or, failing that, the company is established abroad^[1][5]. The paying country must have a tax treaty with France containing an administrative assistance clause; the official list includes, for example, the United Kingdom and the United States^[11]. Correspondingly, capital losses on such securities are only recognised for 50% of their amount^[5].

The exemption only benefits the impatriate personally, not their spouse^[5]. French social levies remain due on the full amount, before the 50% exemption^[6]. If you remain affiliated to the social security scheme of another EU or EEA State, Switzerland or the United Kingdom and are not covered by a French compulsory scheme, CSG and CRDS are not due on this investment income: only the 7.5% solidarity levy applies, still on the full amount^[16][17][18]. Finally, all exempt income is still counted in your reference tax income (revenu fiscal de référence)^[6].

IFI relief for impatriates

French residents are normally liable to the real estate wealth tax (IFI) on their real estate worldwide when its net value exceeds €1.3 million^[8][9]. Under article 964 of the CGI, someone who was not domiciled in France during the five previous calendar years is taxed only on their French real estate, until 31 December of the fifth year following the year in which they became domiciled in France^[8].

However, the natural persons mentioned in the first paragraph of this 1° who have not been domiciled in France for tax purposes during the five calendar years preceding the year in which they have their tax domicile in France are only taxable on the assets mentioned in 2°. This provision applies for each year in which the taxpayer retains their tax domicile in France, until 31 December of the fifth year following the year in which the tax domicile was established in France.

Article 964, 1° of the French General Tax Code, unofficial translation ^[8]

Unlike the income tax regime, this IFI rule requires no employment condition, so it also benefits entrepreneurs, investors and retirees^[7]. Our guide to the French wealth tax explains this five-year IFI relief for new residents in more detail.

When does the impatriate regime start? Becoming resident in France

The regime only applies for years in which you are domiciled in France under the first two criteria of article 4 B of the CGI: you must have your home or main place of stay in France and carry on your main professional activity there^[3][10]. Being French resident only because your centre of economic interests is in France is not enough^[3].

Tax treaties also play a role. If a treaty’s tie-breaker rules make you a resident of the other country, the regime does not apply for that year, even if you meet the French domestic criteria^[3]. Our article on the French tax residency tests explains how these criteria are assessed.

How to claim the French impatriate tax regime

No prior approval is required, but several formalities must be completed^[4][7]:

• before arrival: provide for the impatriation premium in the contract or an amendment, or plan to use the 30% option;
• the employer reports the exempt amounts separately in the monthly social declaration (DSN) and determines the reference remuneration;
• each spring, in the income tax return for the previous year, you check the pre-filled taxable salary, report the exempt salary on form 2042 C, and state your options (flat-rate premium, choice of cap) in the « other information » section;
• for certainty, you or your employer may request a formal ruling (rescrit) from the administration.

Common mistakes with the impatriate regime

• Moving before being hired: settling in France and then looking for a job excludes the regime.
• Signing the contract too late: an actual premium written into an amendment after the start date cannot be exempt as such; only the 30% option remains.
• Ignoring the reference salary: an overly generous premium is partly added back to taxable income.
• Undocumented days abroad: without evidence, the foreign-work exemption can be challenged on audit.
• Changing employer outside the group: leaving the host company or group ends the regime.
• Forgetting the treaty: a treaty residence in another country neutralises the regime for that year.

Why take legal advice before moving to France?

The contract, the premium option, your status as employee or director and the coordination with your former country’s tax rules are all decided before or on arrival. Our tax support for executives moving to France covers each condition, models the different options and secures your first French tax return.

About to relocate to France, or already negotiating your contract? Prepare your relocation with Alexis Germe and bring your draft contract or offer letter and a summary of your residence history over the last five years: they are enough to assess your eligibility and options.

Sources and reference texts

1. Article 155 B of the French General Tax Code, version in force (Légifrance)
2. BOFiP, BOI-RSA-GEO-40-10, RSA, impatriate employees, special tax regime (published 21 June 2017)
3. BOFiP, BOI-RSA-GEO-40-10-10, RSA, impatriate employees, scope (published 11 August 2025)
4. BOFiP, BOI-RSA-GEO-40-10-20, RSA, impatriate employees, exemption of remuneration (published 11 August 2025)
5. BOFiP, BOI-RSA-GEO-40-10-30-10, RSA, impatriate employees, exemption of passive income and capital gains (published 16 February 2023)
6. BOFiP, BOI-RSA-GEO-40-10-40, RSA, impatriate employees, consequences of the exemptions (published 21 June 2017)
7. Le régime des impatriés (impots.gouv.fr) (updated 8 April 2026)
8. Article 964 of the French General Tax Code, version in force (Légifrance)
9. BOFiP, BOI-PAT-IFI-10-20, PAT, IFI, taxable persons (published 8 June 2018)
10. Article 4 B of the French General Tax Code, version in force (Légifrance)
11. BOFiP, BOI-ANNX-000508, INT, list of countries with an exchange of information or assistance clause (published 8 October 2025)
12. BOFiP, BOI-RSA-GEO-40-20, RSA, impatriate employees, deduction of contributions to foreign social protection schemes (published 21 June 2017)
13. Article 83 of the French General Tax Code, 1° 0 bis and 2°-0 ter, version in force (Légifrance)
14. Article L767-2 of the French Social Security Code, pension affiliation exemption for employees called from abroad, version in force (Légifrance)
15. Article D767-1 of the French Social Security Code, exemption request and minimum contribution of €20,000 a year, version in force (Légifrance)
16. Article L136-6 of the French Social Security Code, CSG on investment income, I, 4° (income exempt under article 155 B, II) and I ter (persons affiliated in another EEA State or Switzerland), version in force (Légifrance)
17. Article 235 ter of the French General Tax Code, 7.5% solidarity levy, version in force (Légifrance)
18. Brochure pratique impôt sur le revenu 2026, chapter Divers, boxes 8SH and 8SI, note on persons affiliated to the British social security scheme (impots.gouv.fr, in French)

You live in England and let a flat in Bordeaux. Or you have retired to the Dordogne and still receive a State Pension, a workplace pension and perhaps rent from your former home in the UK. Either way, the question is the same: which country taxes what, and how do you avoid paying twice? The answer starts with the France UK tax treaty, in fact two treaties: the 2008 convention on income and capital gains^[1], and the 1963 convention on inheritance^[14]. Here is what they say, and where they leave gaps.

What is the France UK tax treaty?

The UK France double taxation convention on income and capital gains was signed in London on 19 June 2008 and entered into force on 18 December 2009^[3]. It has applied in France since 1 January 2010 and, in the UK, since 6 April 2010 for Income Tax and Capital Gains Tax^[3]. The treaty was signed in English and French, both texts being equally authoritative^[1][2]: you can read the full English text on GOV.UK and the French version on the French tax authority’s website^[5].

It has since been modified by the OECD Multilateral Instrument, which adds a general anti-abuse rule^[4]. Inheritance falls under a separate and much older text: the convention of 21 June 1963, discussed below^[14][16].

Am I tax resident in France or the UK?

Everything starts with residence, and each country applies its own test. In the UK, the Statutory Residence Test applies: you are, for instance, automatically UK resident if you spend 183 days or more in the UK in the tax year, which runs from 6 April to 5 April^[7]. In France, article 4 B of the French tax code treats you as resident if your home or main place of stay, your main professional activity or the centre of your economic interests is in France^[6]. These criteria are alternative: meeting just one is enough.

Where both countries claim you, Article 4(2) of the treaty applies a series of tie-breaker tests, in a fixed order: permanent home, centre of vital interests, habitual abode and, finally, nationality^[1]. If you are a national of both countries, or of neither, the two tax authorities must settle the question by mutual agreement^[1].

Where by reason of the provisions of paragraph 1 an individual is a resident of both Contracting States, then his status shall be determined in accordance with the following rules:

(a) he shall be deemed to be a resident only of the Contracting State in which he has a permanent home available to him; if he has a permanent home available to him in both States, he shall be deemed to be a resident only of the State with which his personal and economic relations are closer (centre of vital interests); […]

UK-France Double Taxation Convention of 19 June 2008, Article 4, paragraph 2 (authentic English text) ^[1]

How is French rental income taxed for UK residents?

Income from immovable property may be taxed in the country where the property is situated (Article 6), and this expressly covers the letting of the property^[1]. A UK resident who lets a flat in Bordeaux or a gîte in Brittany therefore remains taxable in France on that rent.

1. Income derived from immovable property (including income from agriculture or forestry) situated in a Contracting State may be taxed in that State.

[…] 3. The provisions of paragraph 1 shall apply to income derived from the direct use, letting, or use in any other form of immovable property.

UK-France Double Taxation Convention of 19 June 2008, Article 6, paragraphs 1 and 3 (authentic English text) ^[1]

French income tax on rent for non-residents

In France, the rent is declared each year as a non-resident taxpayer. Under article 197 A of the French tax code, the tax cannot be lower than 20% of net taxable income up to the upper limit of the second band of the income tax scale, and 30% above it, unless you show that your average French rate on your worldwide income would be lower^[8].

[…] the tax may not, in that case, be lower than an amount calculated by applying a rate of 20% to the portion of net taxable income that is less than or equal to the upper limit of the second band of the income tax scale, and a rate of 30% to the portion above that limit; […] however, where the taxpayer shows that the rate of French tax on all of his income of French or foreign source would be lower than these minimum rates, that rate applies to his income of French source.

Article 197 A of the French tax code (Code général des impôts), current version, unofficial translation ^[8]

French social charges: the 7.5% solidarity levy

French social charges also apply to the property income and property gains of non-residents. However, the French tax authority confirms that, although the UK left the European Union, people affiliated to the UK social security system continue to be exempt from CSG and CRDS: they pay only the solidarity levy of 7.5% on that income^[9]. The exemption must be claimed in your French return^[9].

UK tax on French rental income

As a UK resident, you normally pay UK tax on your worldwide income, including rent from overseas property^[7]. The French rent is therefore reported in your Self Assessment return, and the UK gives a credit for the French tax under Article 24(1) of the treaty^[1][11]. The credit cannot exceed the UK tax on the same income^[11]. One detail matters: HMRC accepts French income tax and the solidarity levy for credit, but not CSG or CRDS^[10].

How are British pensions taxed in France?

Is the UK State Pension taxable in France?

Pensions paid in consideration of past employment are taxable only in the country of residence (Article 18)^[1]. A British retiree who is resident in France is therefore taxed in France on workplace and personal pensions. HMRC applies the same rule to the UK State Pension: as a resident of France, you can apply to have it exempted from UK Income Tax using form France-Individual, certified by your French tax office^[12].

Subject to the provisions of paragraph 2 of Article 19, pensions and other similar remuneration paid in consideration of past employment to a resident of a Contracting State shall be taxable only in that State.

UK-France Double Taxation Convention of 19 June 2008, Article 18 (authentic English text) ^[1]

Are UK government pensions taxed in France?

Pensions paid by a State or a local authority for services rendered to it remain taxable only in the paying State (Article 19(2))^[1]. A pension paid by the UK for service to the UK government or a local authority therefore stays taxable in the UK, unless you are a resident and national of France without also being a UK national^[1][12]. France does not ignore that pension, however: it takes it into account to calculate your French tax, then grants a tax credit equal to the French tax on it (Article 24(3))^[1]. Some UK war and armed forces disability pensions are exempt from French tax as long as they are exempt in the UK (Article 19(4))^[1].

How are dividends and capital gains taxed under the France UK tax treaty?

Investment income follows specific rules:

• dividends: taxable in the country of residence, but the paying company’s country may levy up to 15% of the gross dividend (Article 11)^[1];
• interest and royalties: taxable only in the country of residence of the beneficial owner (Articles 12 and 13)^[1].

For capital gains (Article 14), gains on immovable property may be taxed in the country where it is situated, and the same applies to unlisted shares deriving the greater part of their value from such property, such as shares in a French property company^[1]. Other gains, on listed shares for example, are taxable only in the seller’s country of residence^[1]. A UK resident selling a French holiday home is therefore taxed in France, at the proportional rate of 19% under article 244 bis A of the French tax code^[13], plus the solidarity levy if affiliated to UK social security^[9], and declares the gain in the UK with credit relief^[11].

If you have just left the UK, note Article 14(6): a country keeps the right to tax gains made by a person who was resident there at any time during the previous six fiscal years, and must then itself relieve the double taxation (Article 24(4))^[1].

How does the treaty eliminate double taxation?

Article 24 sets out a different method for each country^[1]. For a UK resident, French tax paid in accordance with the treaty is allowed as a credit against the UK tax computed on the same income or gains^[1]. For a French resident, income taxable in the UK is included in the calculation of French tax, but gives rise to a tax credit^[1]:

• for most income, such as UK rent or government pensions, the credit is equal to the French tax attributable to that income, which in practice neutralises French tax on it while increasing the rate applied to the rest^[1];
• for dividends, certain capital gains, directors’ fees and a few other categories, the credit is equal to the UK tax actually paid, capped at the corresponding French tax^[1].

Our guide to the general methods of double tax relief explains how these credits work across France’s treaties.

If you consider that you are being taxed contrary to the treaty, you can present your case to the competent authority of either country, within three years from the first notification of the disputed taxation or within six years from the end of the tax year concerned (Article 26, as modified by the Multilateral Instrument)^[4].

Is there a France UK inheritance tax treaty?

Yes. The convention signed in Paris on 21 June 1963 came into force on 30 June 1964 and applies to the estates of people who died on or after 21 June 1963^[14][16]. Originally drafted for UK estate duty, it now applies to UK Inheritance Tax and to French duty on death, but not to lifetime gifts^[17]. Its English text is published on legislation.gov.uk^[15].

Domicile under the 1963 convention

The convention works by reference to the deceased’s domicile, assessed under each country’s own law, with tie-breaker rules similar to those of the income tax treaty if both countries claim the deceased^[15]. On the UK side, this point deserves attention: since 6 April 2025, UK Inheritance Tax is based on long-term UK residence (at least 10 of the previous 20 tax years) rather than domicile, but pre-1975 conventions such as the French one continue to operate by reference to common law domicile^[17][18]. A Briton settled in France for decades may still be UK-domiciled under common law, in which case the tie-breaker rules decide.

Which country taxes which assets?

The convention contains its own rules on where each asset is deemed to be situated (Article IV)^[15], including:

• land and buildings: where they are located; shares in a French société civile immobilière follow the location of the property^[15];
• company shares: where the company was incorporated^[15];
• debts, government securities and sums payable under insurance policies: where the deceased was domiciled^[15].

Where the deceased was domiciled in Great Britain, the convention provides that France may not tax property not situated in France (Article V(2))^[15]. This matters because French domestic law, in article 750 ter of the French tax code, can otherwise tax foreign assets received by an heir resident in France for at least six of the previous ten years^[19]. Assets situated outside France are therefore outside French tax, even when received by such an heir. The location rules of Article IV, however, apply only to an asset taxed in both countries, or taxed in one and left untaxed in the other by a specific exemption (Article III(2))^[15]. For an asset the UK does not tax at all, the French tax authorities apply French law instead^[21]. Since 6 April 2025, this covers assets situated outside the UK when the deceased was not a long-term UK resident, which UK law treats as excluded property^[22]: accounts with French banks and bonds issued by French companies or the French State, which Article IV would place in Great Britain, then count as French assets and are taxable in France^[19][21]. Conversely, where the deceased was domiciled in France, the UK does not tax property situated outside Great Britain, unless it passes under a disposition or devolution governed by the law of part of Great Britain (Article V(1))^[15].

Where a person was at the time of his death domiciled in some part of Great Britain duty shall not be imposed in France on any property not situated in France; and in determining the amount or rate of duty payable on any property which is chargeable in France, any property not situated in France shall be disregarded.

UK-France Estate Duty Convention of 21 June 1963, Article V, paragraph 2 (authentic English text) ^[15]

When the country of domicile taxes an asset situated in the other country, it grants a credit for the duty paid there, within the limit of its own duty on that asset (Article VI)^[15]. Any claim for a credit or refund must be made within five years of the death (Article VII)^[15]. French rates and allowances, which differ sharply from UK rules, are covered in our guide to French inheritance tax.

Retiring to France from the UK: how the tax treaty applies

If you are retiring to France, remember that the treaty does not cover the French tax on real estate wealth (IFI), which is outside its scope^[1]: under article 964 of the French tax code, it applies to net taxable real estate assets above 1.3 million euros on 1 January^[20]. Nor does it settle every question, such as the French treatment of UK pension lump sums or trusts.

Getting advice on cross-border tax between France and the UK

The two France-UK conventions must always be read together with two very different domestic systems. A French tax lawyer for British clients can help you confirm your residence, organise your French-source income and plan the transmission of your assets.

Do you own property in France, receive UK pensions in France, or plan to move between the two countries? Alexis Germe, tax lawyer at the Bordeaux bar, reviews your situation and coordinates with your UK advisers so that your filings in both countries remain consistent. Arrange a Franco-British review of your situation, listing the income and assets you hold on each side of the Channel.

Sources and reference texts

1. 2008 UK and France Double Taxation Convention, in force, with its Protocol (GOV.UK, HMRC)
2. Convention between France and the United Kingdom of 19 June 2008 on taxes on income and capital gains, French text published by decree no. 2010-20 of 7 January 2010 (impots.gouv.fr)
3. France: tax treaties, dates of entry into force and effect (GOV.UK, HMRC)
4. Synthesised text of the Multilateral Instrument and the 2008 UK-France Double Taxation Convention (GOV.UK, HMRC)
5. Les conventions internationales, United Kingdom texts including the consolidated version modified by the MLI (impots.gouv.fr)
6. Article 4 B of the French tax code (Code général des impôts), current version (Légifrance)
7. Tax on foreign income: UK residence and tax (GOV.UK)
8. Article 197 A of the French tax code (Code général des impôts), current version (Légifrance)
9. Je suis non-résident, suis-je redevable des prélèvements sociaux (CSG, CRDS, prélèvement de solidarité) ? (impots.gouv.fr)
10. HMRC Double Taxation Relief Manual, DT7261, France: admissible taxes (GOV.UK)
11. Tax on foreign income: if you’re taxed twice, Foreign Tax Credit Relief (GOV.UK)
12. HMRC, France Individual Notes, notes to form France-Individual DT (GOV.UK)
13. Article 244 bis A of the French tax code (Code général des impôts), current version (Légifrance)
14. Convention between France and the United Kingdom of 21 June 1963 for the avoidance of double taxation on inheritance, French text (impots.gouv.fr)
15. The Double Taxation Relief (Estate Duty) (France) Order 1963, SI 1963/1319, English text of the convention (legislation.gov.uk)
16. BOFiP, BOI-INT-CVB-GBR-20, France-UK tax convention on inheritance (published 12/09/2012)
17. HMRC Inheritance Tax Manual, IHTM47072, long-term UK residence test: pre-1975 Double Taxation Conventions (GOV.UK)
18. HMRC Inheritance Tax Manual, IHTM47001, long-term UK residence test: introduction and when domicile will remain relevant (GOV.UK)
19. Article 750 ter of the French tax code (Code général des impôts), current version (Légifrance)
20. Article 964 of the French tax code (Code général des impôts), current version (Légifrance)
21. BOFiP, BOI-INT-CVB-GBR-20-20, France-UK inheritance convention: methods for eliminating double taxation (published 21/10/2013)
22. Inheritance Tax Act 1984, section 6, excluded property (legislation.gov.uk)

You own a home in France, you have retired there, or your children live in France while you remain in the United Kingdom or the United States? Sooner or later, one question arises: who will pay French inheritance tax, on which assets, and at what rate? The French system differs markedly from UK inheritance tax: it taxes each heir on the share received, at rates that depend on the family relationship, under Article 777 of the French General Tax Code^[3]. It can also reach assets held outside France^[1]. This guide explains who is taxed, how the tax is calculated in 2026, which exemptions apply, how life insurance is treated and what the EU Succession Regulation and the France-UK treaty change for British families.

What is French inheritance tax?

In French law, inheritance tax is called droits de succession. Together with gift tax, it is governed by the General Tax Code (Code général des impôts, or CGI). It is not levied on the estate as a whole, as in the United Kingdom, but on the net share received by each heir or legatee^[3].

The tax therefore depends on who inherits: a child, a sibling or an unrelated person do not pay the same tax on the same sum.

Who pays inheritance tax in France?

The territorial scope of French inheritance tax is set by Article 750 ter of the CGI^[1]. It depends on the tax domicile of the deceased and, in some cases, of the heir, assessed under Article 4 B of the CGI (home or main place of stay, main professional activity, centre of economic interests)^[2]. Nationality plays no part: a British citizen living in France is treated like a French citizen.

When the deceased was resident in France

If the deceased was tax domiciled in France at the time of death, French inheritance tax applies to all assets, whether located in France or abroad^[1]. Under French domestic law, a British retiree living in the Dordogne is thus taxable in France on a London flat or a UK portfolio, wherever the children live.

When the deceased lived outside France

If the deceased was not domiciled in France, only assets located in France are taxable, such as French real estate, French securities and debts owed by French debtors^[1]. Shares in French companies are French assets, as are shares in unlisted foreign companies mainly holding French real estate, in proportion to that property’s value^[1]. Our guide to the French taxes still due by non-residents explains the other obligations attached to French assets.

When the heir lives in France: the 6 out of 10 years rule

Even where the deceased lived abroad, foreign assets are taxable in France if received by an heir who is tax domiciled in France and has been so for at least six of the ten years preceding the year of receipt^[1]. A daughter settled in Bordeaux for eight years who inherits from her mother in Manchester may thus be taxed in France, subject to the applicable tax treaty.

[…] received by the heir, donee, legatee or beneficiary of a trust […] who has his tax domicile in France within the meaning of Article 4 B. However, this provision applies only where the heir, donee or beneficiary of a trust has had his tax domicile in France for at least six years during the ten years preceding the year in which he receives the assets.

Article 750 ter of the CGI, 3°, version in force, unofficial translation ^[1]

For American families, a separate France-US convention on estates and gifts, signed on 24 November 1978 and amended by a protocol of 8 December 2004, applies^[20][21]. Where the deceased was neither a French citizen nor domiciled in France, France may tax only French real estate, including shares in companies at least 50% of whose assets are French real estate, the assets of a permanent establishment in France and tangible movable property located in France; shares, debts, cash and other intangible assets are taxable in France only if the deceased was a French citizen or domiciled there^[20]. The 6 out of 10 years rule therefore does not reach those assets, unless they bear no US tax for a reason other than a specific exemption, allowance, exclusion, credit or deduction^[20]. Where France does tax, it grants the same allowances as if the deceased had been domiciled in France^[20].

How is French inheritance tax calculated?

For each beneficiary, the net estate is first determined (assets valued at the date of death, less deductible debts), then the share of each heir is established under the applicable succession law and any will. The allowance corresponding to the family relationship is deducted from that share, and the progressive scale of Article 777 of the CGI is applied to the balance^[3][4].

Gifts made by the deceased to the same beneficiary within the fifteen years before death are added back: they use up the allowance and push the inheritance into higher bands. Older gifts are disregarded^[8].

French inheritance tax rates for children and parents

Between parents and children, in either direction, the rates range from 5% to 45%. The bands in force in 2026 are as follows^[3]:

• up to €8,072: 5%;
• from €8,072 to €12,109: 10%;
• from €12,109 to €15,932: 15%;
• from €15,932 to €552,324: 20%;
• from €552,324 to €902,838: 30%;
• from €902,838 to €1,805,677: 40%;
• above €1,805,677: 45%^[3].

A simple example: a child inherits €400,000 from a parent, with no prior gifts. After the €100,000 allowance, the taxable share is €300,000. The tax amounts to €403.60 on the first band, €403.70 on the second, €573.45 on the third and €56,813.60 on the part between €15,932 and €300,000, that is approximately €58,194 in total.

French inheritance tax rates for siblings, nephews, nieces and unrelated heirs

Outside the direct line, the rates are much heavier^[3]:

• brothers and sisters: 35% up to €24,430, then 45%;
• relatives up to the fourth degree (nephews, nieces, first cousins, for example): 55%;
• more distant relatives and unrelated persons: 60%.

The last category includes an unmarried partner who is neither married to nor in a civil solidarity pact (PACS) with the deceased, as well as stepchildren who have not been adopted. For blended families, common among British couples who have remarried, this point alone justifies a review of the estate plan.

What are the inheritance tax allowances in France?

The allowances (abattements) are deducted from each share before the scale is applied. Under Article 779 of the CGI and Article 788 of the CGI, the main amounts in 2026 are^[4][5]:

• €100,000 for each child and for each parent;
• €159,325 for an heir unable to work in normal conditions because of a physical or mental disability;
• €15,932 for each brother or sister;
• €7,967 for each nephew or niece;
• €1,594 for any other heir who benefits from no other allowance^[4][5].

For the purposes of gift and inheritance tax, an allowance of €100,000 is applied to the share of each of the ascendants and to the share of each of the children, living or represented following predecease or renunciation.

Article 779 of the CGI, I, version in force, unofficial translation ^[4]

Some brothers and sisters escape tax entirely. Under Article 796-0 ter of the CGI, a sibling who is single, widowed, divorced or legally separated is fully exempt if, at the time of death, he or she was over fifty or suffered from a disability preventing work, and had lived continuously with the deceased for the five years before the death^[7].

Is the surviving spouse exempt from French inheritance tax?

Yes. Since 2007, the surviving spouse and the surviving PACS partner have been totally exempt from French inheritance tax, whatever the amount received^[6]. Lifetime gifts between spouses, by contrast, remain subject to gift tax under a separate scale^[3].

The surviving spouse and the partner bound to the deceased by a civil solidarity pact are exempt from inheritance tax.

Article 796-0 bis of the CGI, version in force, unofficial translation ^[6]

The exemption is reserved for married couples and PACS partners. An unmarried partner is taxed at 60% after an allowance of only €1,594^[3][5], a rule many unmarried British couples buying in France discover too late.

A UK civil partnership counts as a PACS: for gift and inheritance tax, the French tax authorities apply the PACS rules to partnerships registered abroad and expressly list the British civil partnership, unless the partnership is contrary to French international public policy, for example between close relatives^[22][23]. A marriage celebrated in the United Kingdom in accordance with local rules also qualifies, as the exemption covers the surviving spouse^[6]. Where one spouse is French, the official guidance states that a marriage that has not been transcribed in the French civil status registers has no effect for third parties in France and does not give access to the tax advantages of married couples^[24].

Life insurance and French inheritance tax (assurance vie)

The sums paid on death under a French life insurance policy (assurance vie) follow a specific regime, which depends on the age of the policyholder when the premiums were paid.

Premiums paid before age 70: Article 990 I of the CGI

For premiums paid before the age of seventy, Article 990 I of the CGI provides for a levy on the share of each beneficiary, after a fixed allowance of €152,500 per beneficiary, covering all policies taken out on the life of the same insured person. The levy is 20% on the taxable portion up to €700,000 and 31.25% beyond^[9]. Beneficiaries who are exempt from inheritance tax, such as the surviving spouse or PACS partner, are not subject to the levy^[9].

The levy has its own territorial rule: it applies where the insured person was tax domiciled in France at the time of death, or where the beneficiary is domiciled in France at that date and has been so for at least six of the ten preceding years^[9].

Premiums paid after age 70: Article 757 B of the CGI

For premiums paid after the age of seventy, Article 757 B of the CGI applies. The sums are subject to ordinary inheritance tax, according to the relationship between the beneficiary and the insured, but only up to the amount of the premiums paid after seventy, and after a global allowance of €30,500 shared between all beneficiaries^[10]. The investment growth on those premiums is not taxed.

Forced heirship in France and the EU Succession Regulation

Tax is only half of the question. The other half is civil law: can you leave your estate to whomever you wish? French law protects children through the reserved share (réserve héréditaire), a form of forced heirship. Under Article 913 of the French Civil Code, gifts and legacies cannot exceed half of the estate if the deceased leaves one child, one third if he leaves two, and one quarter if he leaves three or more^[11].

Which law governs your estate: habitual residence or nationality?

Regulation (EU) No 650/2012, the EU Succession Regulation, applies to deaths on or after 17 August 2015^[12]. By default, the whole estate is governed by the law of the State of the deceased’s habitual residence at death^[12]. A Briton living in France will therefore, in principle and unless a choice is made, have French succession law and its forced heirship rules applied to the whole estate.

The Regulation, however, allows a person to choose the law of his or her nationality, expressly in a will or through its terms^[12]. British nationals can make this choice even though the United Kingdom is not bound by the Regulation, since the law it designates applies whether or not it is the law of a Member State^[12].

A person may choose as the law to govern his succession as a whole the law of the State whose nationality he possesses at the time of making the choice or at the time of death.

Regulation (EU) No 650/2012, Article 22(1), official English version ^[12]

Choosing English law: the limits of the compensatory levy

Since 1 November 2021, Article 913 of the Civil Code allows each child to claim a compensatory levy (prélèvement compensatoire) on assets located in France, where the deceased or at least one child is an EU national or habitually resident in the EU, and the foreign law applicable to the estate provides no protective reserved share mechanism for children^[11]. The Ministry of Justice has confirmed that French courts will apply this levy where the deceased chose the law of his or her nationality under the EU Succession Regulation and that law has no protective reserved share mechanism for children^[25]. A British national resident in France who chooses English law to disinherit a child may therefore see that choice partly neutralised on French assets. English law lets a child apply to the court for reasonable financial provision only where the deceased died domiciled in England and Wales^[26]. No official text and no published decision of the Cour de cassation yet says whether this discretionary remedy is such a mechanism: that point is assessed case by case, which calls for careful drafting.

Above all, the choice of succession law has no effect on tax: French inheritance tax still applies under Article 750 ter of the CGI and the relevant tax treaty.

French inheritance tax for British nationals: the France-UK treaty

France and the United Kingdom signed a convention on estates on 21 June 1963, in force since 30 June 1964^[13][14]. It covers inheritance only, not lifetime gifts^[18], and often reduces French tax exposure for British families:

• Domicile: on the UK side, HMRC applies common law domicile to this convention^[18]; where the deceased is domiciled in both countries, the treaty decides by looking successively at the permanent home, the centre of vital interests, habitual abode and nationality^[13].
• Deceased domiciled in Great Britain: France may not tax assets not located in France and disregards them in calculating the tax^[13], so the French rule on foreign assets received by an heir living in France does not reach them. The treaty’s location rules, however, apply only to assets taxed in both countries, or left untaxed in one of them by a specific exemption^[13]. For an asset the UK does not tax at all, which since 6 April 2025 includes assets outside the UK of a deceased who was not a long-term UK resident^[27], French law decides where the asset is located^[19]: accounts with French banks and bonds issued by French companies or the French State, which the treaty would otherwise place in Great Britain, are then French assets taxable in France^[1][13][19].
• Location of assets: real estate is located where it stands; shares are located where the company was incorporated; sums payable under insurance policies are located where the deceased was domiciled^[13].
• Tax credit: the State of domicile credits the tax levied by the other State on assets located there, up to its own tax on those assets, on a claim made within five years of the death^[13].

On the UK side, inheritance tax is charged at 40% above a nil-rate band of £325,000^[16]. Since 6 April 2025, its worldwide scope depends on long-term UK residence (UK tax residence for at least 10 of the previous 20 tax years), a status that can continue for up to 10 tax years after leaving the United Kingdom^[17]. A Briton who has recently moved to France may therefore fall within both systems for several years. Taking French tax advice for your family’s assets allows both sides to be reviewed together.

How to reduce French inheritance tax legally

There is no universal solution, but several levers deserve to be examined well in advance:

• Lifetime gifts: the €100,000 allowance per parent and per child is available again every fifteen years^[4][8].
• Life insurance: premiums paid before 70 benefit from the €152,500 allowance per beneficiary^[9].
• Marriage or PACS: for an unmarried couple, it turns a 60% rate into a full exemption^[3][6].
• Choice of law and will: a will choosing the law of nationality can organise the transmission, within the limits of the compensatory levy^[11][12].
• Property ownership: how a French property is held influences the outcome; see our article on French wealth tax on real estate, which also looks at how property is held.
• Residence: the date of a move to or from France affects the 6 out of 10 years rule and the treaty position^[1][13].

Arrangements made solely to avoid tax, without any genuine family or patrimonial purpose, may be challenged by the French tax authorities.

French inheritance tax return: deadlines and formalities

Heirs must file a French inheritance tax return (form no. 2705-SD) within six months of the death when it occurred in mainland France and, in principle, within twelve months when it occurred abroad, for example in the United Kingdom; specific time limits apply in the French overseas departments^[15]. No return is required where the gross assets are below €50,000 for direct-line heirs and the surviving spouse or PACS partner, subject to conditions relating to prior gifts, or below €3,000 for other heirs^[15].

Why seek advice from a French tax lawyer?

French inheritance tax combines tax law, civil law, European law and tax treaties. The same estate can be taxed very differently depending on the residence of the deceased and the heirs, the way assets are held, the date of the gifts and the wording of a will.

Maître Alexis Germe, a lawyer at the Bordeaux Bar, advises British, American and other English-speaking families and business owners on French inheritance tax, in France and remotely.

Do you own assets in France or have family living there? Arrange a confidential meeting with the Firm to look at your estate as a whole: where your assets are located, where you and your heirs live, and any gifts already made.

Sources and reference texts

1. Article 750 ter of the French General Tax Code (CGI), version in force (Légifrance)
2. Article 4 B of the French General Tax Code (CGI), version in force (Légifrance)
3. Article 777 of the French General Tax Code (CGI), version in force (Légifrance)
4. Article 779 of the French General Tax Code (CGI), version in force (Légifrance)
5. Article 788 of the French General Tax Code (CGI), version in force (Légifrance)
6. Article 796-0 bis of the French General Tax Code (CGI), version in force (Légifrance)
7. Article 796-0 ter of the French General Tax Code (CGI), version in force (Légifrance)
8. Article 784 of the French General Tax Code (CGI), version in force (Légifrance)
9. Article 990 I of the French General Tax Code (CGI), version in force (Légifrance)
10. Article 757 B of the French General Tax Code (CGI), version in force (Légifrance)
11. Article 913 of the French Civil Code, version in force since 1 November 2021 (Légifrance)
12. Regulation (EU) No 650/2012 of 4 July 2012 on matters of succession, Articles 20, 21, 22 and 83 (EUR-Lex)
13. Convention between France and the United Kingdom for the avoidance of double taxation with respect to duties on the estates of deceased persons, signed in Paris on 21 June 1963 (impots.gouv.fr)
14. BOFiP, BOI-INT-CVB-GBR-20, INT, tax conventions between France and the United Kingdom on inheritance tax
15. Dois-je faire une déclaration de succession en cas de décès d’un proche ? (impots.gouv.fr)
16. Inheritance Tax (GOV.UK)
17. Inheritance Tax if you’re a long-term UK resident (GOV.UK, HMRC guidance)
18. HMRC Inheritance Tax Manual, IHTM47072, long-term UK residence test: pre-1975 Double Taxation Conventions (GOV.UK)
19. BOFiP, BOI-INT-CVB-GBR-20-20, France-UK inheritance convention: methods for eliminating double taxation
20. Convention between France and the United States of 24 November 1978 on estates and gifts, consolidated version as amended by the protocol of 8 December 2004, Articles 5 to 8 and 12 (impots.gouv.fr)
21. BOFiP, BOI-INT-CVB-USA-20, France-US tax convention on estates and gifts: entry into force and protocol
22. BOFiP, BOI-ENR-DMTG-10-50-30, § 40, inheritance tax between spouses and PACS partners, partnerships registered abroad
23. BOFiP, BOI-IR-CHAMP-20-10, § 80 to 190, foreign registered partnerships treated as a PACS, including the British civil partnership
24. Mariage d’un Français à l’étranger, avec un étranger (Service-Public.fr, official guidance, checked on 18 June 2026)
25. Written question no. 7936, answer of the Ministry of Justice published in the Journal officiel (National Assembly) on 21 November 2023, page 10534
26. Inheritance (Provision for Family and Dependants) Act 1975, section 1 (legislation.gov.uk)
27. Inheritance Tax Act 1984, section 6, excluded property (legislation.gov.uk)

France abolished its general wealth tax in 2018, and many assume that the subject ended there. It did not. Since 1 January 2018, the French wealth tax has taken the form of the impôt sur la fortune immobilière (IFI), a tax on real estate wealth^[1]. If you own property in France worth more than €1.3 million, whether you live in Paris, London or New York, you may have to file an IFI return every year. This guide explains who pays it, how it is calculated in 2026, which debts you can deduct, how property held through a company is caught, and what the France-UK and France-US tax treaties change.

What is the French wealth tax (IFI)?

Article 964 of the French General Tax Code (CGI) creates an annual tax on real estate assets, the IFI^[1]. Unlike the former wealth tax (ISF), it ignores bank accounts, shares in trading companies, bonds and most other financial assets. It targets only real estate, held directly or indirectly, valued on 1 January of each year^[2][8].

The tax is assessed per household. For IFI purposes, the household covers a single person, a married couple or civil partners living together, and also unmarried partners in a stable relationship, together with the minor children whose assets they administer^[8]. One return is filed for all the property owned by its members^[8]. The threshold, rates and main rules described below are those applied by the official 2026 IFI return^[8].

Who pays French wealth tax: residents and non-residents

Everything depends on your tax residence on 1 January. French tax residents are taxed on their real estate located in France and abroad, once the net taxable value exceeds €1,300,000^[1]. Non-residents are taxed only on their French real estate, including the fraction of shares in companies that represents French property^[1][9]. A family living in Surrey with a chalet in the Alps and a Paris flat is therefore within scope if those properties exceed the threshold, net of debts.

Moving to France: the five-year relief for new residents

French law contains an important relief for people who settle in France, whatever their nationality. If you were not tax resident in France during the five calendar years before becoming resident, you are taxed only on your French real estate for a limited period of five years^[1][8]. Your house in the Cotswolds or your apartment in Manhattan stays outside the IFI base during that period.

However, individuals referred to in the first paragraph of this 1° who were not tax domiciled in France during the five calendar years preceding the year in which they become tax domiciled in France are taxable only in respect of the assets referred to in 2°.

French General Tax Code, article 964, 1° (unofficial translation) ^[1]

If you own French property from abroad, our guide on the taxes still due in France as a non-resident covers the other French taxes involved.

Which assets are subject to French wealth tax?

Taxable assets include all built property, whatever its use: your main home, a holiday home, let property, property under construction, as well as rights such as usufruct^[8]. Building land, farmland and other unbuilt property are also included^[8]. Each asset is declared at its market value on 1 January, which you determine under your own responsibility^[8].

Several categories are exempt, in full or in part^[7][8]:

• property used for your main professional activity, carried on personally or through a company, under strict conditions;
• woods and forests and shares in forestry groups, exempt for three quarters of their value, subject to management commitments;
• rural property let on long leases and certain agricultural land groups, partly or fully exempt depending on the conditions met.

Furnished lettings deserve a specific mention, because they are common among foreign owners. A furnished let is only treated as a professional asset if the owner receives more than €23,000 of annual rental receipts, the income from this letting represents more than 50% of the household’s professional income, and the letting is their main activity^[7][8]. A holiday flat let a few weeks a year remains fully taxable.

The 30% allowance on your main home

The value of the home occupied by its owner as their main residence is reduced by 30%^[3]. A Bordeaux house worth €1,500,000 used as your main home is therefore declared at €1,050,000, below the threshold if you own nothing else. Only one property per household can benefit from the allowance^[8]. The allowance is of no help to a non-resident whose French property is a second home.

By way of derogation from the second paragraph of article 761, a 30% allowance is applied to the real market value of the property where it is occupied as a main residence by its owner.

French General Tax Code, article 973, I, second paragraph (unofficial translation) ^[3]

Property held through an SCI or other companies

Holding French property through a company does not take it outside IFI. Many foreign buyers use a French SCI (société civile immobilière), and some use foreign companies. In both cases, the shares are taxable to the extent of the fraction of their value that represents taxable real estate, held directly or indirectly by the company, whether the company is established in France or abroad^[2][8].

The law also neutralises a number of debts inside companies. When shares are valued, loans granted by the shareholder or their family to finance taxable property, and debts unrelated to a taxable asset, are in principle disregarded^[8].

Some holdings are left out. Shares in a company carrying on an industrial, commercial, craft, agricultural or professional activity are ignored if your household holds less than 10% of its capital and voting rights^[2]. Conversely, the fraction of a unit-linked life insurance policy invested in real estate funds is included in the policyholder’s taxable assets^[8].

The 2026 Finance Act adds a new tax for asset-holding companies. For financial years ending on or after 31 December 2026, a 20% tax applies to certain non-business assets (yachts, racehorses, jewellery, wine, homes reserved for the controlling individual’s use, among others) held by a company subject to corporate tax whose assets are worth at least €5 million, which is at least 50% controlled by an individual and which draws more than half of its income from passive sources^[14]. If the company is established abroad, the tax is due by the French-resident individuals who control it^[14]. To avoid a double charge, shares that have borne this tax for the company’s financial year ending in the year before 1 January are exempt from IFI^[15]: the first IFI that can be affected is therefore the one assessed on 1 January 2027.

Which debts can you deduct from IFI?

Debts existing on 1 January, actually borne by the household and relating to taxable assets, are deductible: loans to buy the property or the shares, loans for repair, improvement or construction work, and property taxes such as taxe foncière^[4][8]. The IFI due for the year itself is also treated as a deductible liability^[8].

The deduction is subject to several limits^[4][8][13]:

• interest-only loans (prêts in fine), common in British and American financing, are not deductible at their full outstanding amount: the deductible amount is reduced each year as if the loan were repaid in equal instalments over its term;
• loans with no fixed term are reduced by one twentieth per year elapsed;
• family loans are not deductible when granted by a member of the household, and loans from parents, children, brothers or sisters, or from a company you control, are only deductible if you prove normal terms and actual repayments.

Finally, for large estates, a global cap applies when taxable assets exceed €5 million.

Where the market value of the taxable real estate assets and shares exceeds €5 million and the total amount of debts allowed as a deduction under I, II and III for the same tax year exceeds 60% of that value, the amount of debts above that threshold is deductible only up to 50% of that excess.

French General Tax Code, article 974 (unofficial translation) ^[4]

This cap does not apply to debts which the taxpayer shows were not taken out for a mainly tax-driven purpose^[8].

How is French wealth tax calculated? The 2026 rates

Once the net taxable value exceeds €1,300,000, the tax is calculated on a progressive scale which starts at €800,000^[5][8]. In other words, the €1.3 million threshold determines whether you pay, but once you are liable the slice between €800,000 and €1.3 million is taxed too.

The relief (décote) softens the entry into the tax: for a net taxable value of €1,350,000, the scale gives €2,850 (€2,500 on the 0.50% band and €350 on the 0.70% band), reduced by €17,500 minus 1.25% of €1,350,000, that is €625, leaving €2,225^[5].

The IFI cap: 75% of income, for residents only

French residents benefit from a cap (plafonnement): if IFI plus the income taxes due in France and abroad on the previous year’s income exceed 75% of the household’s worldwide income, IFI is reduced by the excess^[6][8]. The law reserves it to taxpayers with their tax domicile in France^[6]: a non-resident cannot use it.

When and how to file a French wealth tax return in 2026

IFI is declared at the same time as income tax, using form 2042-IFI and its schedules^[8]. In 2026, the online filing deadline was 21 May for non-residents and for French départements 01 to 19, 28 May for départements 20 to 54 and 4 June for départements 55 to 976; paper returns had to be filed by 19 May 2026^[8].

Non-residents who do not file a French income tax return use a simplified cover form without income, form 2042-IFI-COV, together with the IFI return, and deal with the tax office for non-residents^[8][9]. A tax notice is then issued, in almost all cases in August, with payment due by 15 September (15 September 2026 for this year’s IFI)^[8]. Any amount above €300 must be paid online (or by direct debit)^[8].

French wealth tax and tax treaties: UK and US owners

IFI applies subject to international tax treaties^[10]. Many treaties were signed when France had the former ISF. The French administration carries over to IFI the principles used to interpret them for ISF, but states that a treaty applicable to ISF is not necessarily applicable to IFI: the wording of each treaty decides^[10]. Its IFI guidance also confirms that a treaty may exclude the foreign assets of nationals of the other State who become French resident, a relief never available to French nationals^[16]. Where a French resident pays a similar wealth tax abroad on foreign property, French law also allows that foreign tax to be credited against IFI, within the French tax on that property^[7][8].

The France-UK tax treaty and IFI

The France-UK treaty signed in London on 19 June 2008 covers taxes on income and capital gains. It lists no wealth tax among the taxes covered, and its article 2(2) only extends it to identical or substantially similar taxes added to, or replacing, those income and capital gains taxes^[11]. Its only wealth tax provision, article 29(3), names the former ISF: for a UK national without French nationality who becomes resident in France, assets located outside France were excluded from the ISF base for five years^[11]. On the treaty’s own wording, IFI is therefore not a covered tax, and article 29(3), which refers to ISF alone, does not apply to it. British nationals moving to France who were not French resident in the previous five calendar years rely instead on the five-year relief in article 964 of the CGI, which applies whatever the nationality^[1].

The France-US tax treaty and IFI

The France-US treaty of 31 August 1994, by contrast, covers taxes on income and capital: it applies to French taxes on total capital or on elements of capital, names the former wealth tax (ISF), and extends to identical or substantially similar taxes imposed after its signature in addition to, or in place of, the existing ones^[12]. IFI, a tax on one element of capital that replaced ISF, therefore falls within the treaty. Under its article 23, real property is taxable in the country where it is located, as are shares in a company at least 50% of whose assets consist of, or which derives at least 50% of its value from, real property in that country^[12]. A US resident who owns a flat in Nice, directly or through such a company, therefore remains within the scope of IFI. Article 23(6) also excludes, for five years, assets located outside France owned by a US citizen without French nationality who becomes resident in France, with a new five-year period if they return after at least three years abroad^[12]. As IFI replaced ISF within the treaty’s scope, this clause applies to IFI alongside the article 964 relief^[1][16].

Real estate also raises inheritance questions that IFI planning should not ignore. If you own property in France, our guide to French inheritance tax completes this analysis.

Reviewing your French property holdings with a tax lawyer

The French wealth tax looks simple, a single threshold and a short scale, but the details decide the bill: valuation, the treatment of interest-only loans and family loans, holdings through an SCI or a foreign company, the five-year relief for new residents and the reach of older treaties. A lawyer specialising in international taxation can review your structure, secure your returns and anticipate the effect of a move to or from France.

Do you hold French real estate, or are you planning to settle here? Alexis Germe, tax lawyer at the Bordeaux bar, advises British, American and other international clients on their French real estate taxation. Schedule a review of your IFI position, with the list of your French properties and how each one is held.

Sources and reference texts

1. Article 964 of the French General Tax Code, scope of the IFI, current version (Légifrance)
2. Article 965 of the French General Tax Code, taxable assets and shares, current version (Légifrance)
3. Article 973 of the French General Tax Code, valuation and main residence allowance, current version (Légifrance)
4. Article 974 of the French General Tax Code, deductible debts, current version (Légifrance)
5. Article 977 of the French General Tax Code, rates and relief, current version (Légifrance)
6. Article 979 of the French General Tax Code, IFI cap, current version (Légifrance)
7. French General Tax Code, articles 964 to 983, real estate wealth tax, including exemptions (articles 975 and 976) and foreign tax credit (article 980) (Légifrance)
8. Impôt sur la fortune immobilière 2026, official notice and form 2042-IFI (impots.gouv.fr, in French)
9. Non-residents: how and where to declare and pay IFI (impots.gouv.fr)
10. BOFiP, BOI-PAT-IFI-10, IFI scope, paragraph 30 on tax treaties (published 08/06/2018)
11. Convention between France and the United Kingdom of 19 June 2008 on taxes on income and capital gains, articles 2 and 29 (impots.gouv.fr, in French)
12. Convention between France and the United States of 31 August 1994 on taxes on income and capital, consolidated version, articles 2 and 23 (impots.gouv.fr, in French)
13. BOFiP, BOI-PAT-IFI-20-40-10, conditions for deducting debts (published 05/06/2024)
14. Article 235 ter C of the French General Tax Code, tax on non-business assets held by companies, created by article 7 of Finance Act no. 2026-103 of 19 February 2026, current version (Légifrance)
15. Article 975 of the French General Tax Code, IFI exemptions, including VII on shares subject to the article 235 ter C tax, current version (Légifrance)
16. BOFiP, BOI-PAT-IFI-10-20-20, IFI, persons domiciled in France, paragraph 1 on treaty relief for nationals of the other State (published 08/06/2018)

Your passport, the address printed on your documents, the number of days you spend in each country: which of these decides where you pay tax on your worldwide income? Whether you have moved abroad and the French tax authorities still treat you as one of their taxpayers, or you are settling in France and wonder when France will start taxing that income, the answer turns on one question: French tax residency. It does not depend on your nationality, on the address printed on your documents, or on a simple 183-day count. It is governed by precise legal criteria set out in Article 4 B of the French General Tax Code (Code général des impôts, or CGI)^[1]. This guide explains those criteria, how the France-UK tax treaty settles cases where both countries claim you, and the evidence you should gather to show that you have genuinely left France. If you are settling in France, also look at the tax relief available when you move to France.

What is French tax residency?

French tax residency (the French statute speaks of domicile fiscal, tax domicile) determines whether France taxes you on your worldwide income or only on income arising in France. Under Article 4 A of the CGI, people whose tax domicile is in France are liable to income tax on all of their income, while those whose tax domicile is outside France are liable only on their French-source income^[2][3].

The stakes are high. A French tax resident is taxable in France on income wherever it arises, subject to treaty relief, and must report accounts held abroad. A non-resident remains taxable in France only on specific French-source income, such as rent from a French property; our guide to the taxes still due in France as a non-resident covers that side of the question. Leaving France may also trigger the French exit tax on unrealised gains for holders of substantial shareholdings.

Who is a French tax resident? The three criteria of Article 4 B

Article 4 B of the CGI sets out three alternative criteria. Meeting just one of them is enough for you to be treated as tax domiciled in France under French domestic law^[1][3].

Your home (foyer) or principal place of stay in France

Your home, or foyer, is the place where you normally live, provided that residence in France is of a permanent nature^[3]. In practice, it is where your spouse or partner and children live. The French tax authorities consider that this place remains your home even if your work keeps you away for most of the year, as long as your family continues to live there^[3].

Only where no home can be identified does the second limb apply: your principal place of stay. As a general rule, taxpayers who stay in France for more than six months in a given year are regarded as having their principal place of stay there^[3].

1. The following persons shall be regarded as having their tax domicile in France within the meaning of Article 4 A:

a. Persons who have their home or their principal place of stay in France;

Article 4 B of the CGI, 1, a, current version (unofficial translation) ^[1]

Your main professional activity in France

You are a French tax resident if you carry on a professional activity in France, whether employed or self-employed, unless you can show that it is only ancillary^[1]. Where you have several activities, the main one is the activity to which you devote the most time, even if it does not generate most of your income; if that test cannot be applied, it is the one that brings you the largest share of your worldwide income^[3].

Since the Finance Act for 2020, senior executives of companies whose registered office is in France and whose annual turnover in France exceeds 250 million euros (including, for a group, the turnover of the companies it controls) are deemed to carry on their main professional activity in France, unless they prove otherwise^[1][4].

b. Persons who carry on a professional activity in France, whether salaried or not, unless they can show that this activity is carried on there on an ancillary basis;

Article 4 B of the CGI, 1, b, current version (unofficial translation) ^[1]

Your centre of economic interests in France

Finally, you are a French tax resident if France is the centre of your economic interests: the place where you have made your main investments, where your business has its seat, from which you manage your assets, or from which you derive, directly or indirectly, most of your income^[1][3].

c. Persons who have the centre of their economic interests in France.

Article 4 B of the CGI, 1, c, current version (unofficial translation) ^[1]

Does the 183-day rule apply to French tax residency?

Spending fewer than 183 days a year in France is not enough to escape French tax. French law contains no standalone 183-day rule: the six-month threshold is only an indicator used to identify your principal place of stay, which itself only comes into play when you have no home in France^[3]. Someone who spends 100 days a year in France can perfectly well remain a French tax resident if their family lives there, if they work mainly there, or if most of their income comes from France.

The confusion often comes from the UK. Under the UK Statutory Residence Test, spending 183 days or more in the UK in a tax year does make you automatically UK resident, and spending fewer than 16 days (or 46 days if you were not UK resident in any of the three previous tax years) makes you automatically non-resident^[10]. These are UK rules only: they say nothing about whether France regards you as resident.

French tax residency compared with the UK and US rules

The table below sets the French rules alongside the UK and US approaches^{[1][3][10][12]}.

For American citizens, becoming a French tax resident does not end US obligations, since the United States taxes its citizens on worldwide income wherever they live^[12]: it adds French ones, and the France-US tax treaty then determines how double taxation is relieved.

Dual tax residency: how the France-UK tax treaty decides

When two countries each consider you resident under their own law, you have dual tax residency, and the treaty’s tie-breaker rules apply in a strict order. Article 4 of the 2008 France-UK double taxation convention provides the following sequence^[5]:

(a) he shall be deemed to be a resident only of the Contracting State in which he has a permanent home available to him; if he has a permanent home available to him in both States, he shall be deemed to be a resident only of the State with which his personal and economic relations are closer (centre of vital interests);

France-UK Double Taxation Convention of 19 June 2008, Article 4, paragraph 2, authentic English text ^[5]

French law expressly gives way to these treaty rules: a person who meets one of the Article 4 B criteria is nevertheless not tax domiciled in France where, under a double tax treaty, they are not regarded as resident of France^[1]. Our article on the France-UK tax treaty explains how income is then allocated.

Persons who meet at least one of the criteria set out in a to c of this 1 may not, however, be regarded as having their tax domicile in France where, under the international conventions relating to double taxation, they are not regarded as residents of France.

Article 4 B of the CGI, 1, last paragraph, current version (unofficial translation) ^[1]

If the two administrations still disagree, the treaty offers a mutual agreement procedure. The case must be presented within three years from the first notification of the action resulting in taxation not in accordance with the treaty, or within six years from the end of the tax year concerned^[5][6].

Changing tax residency mid-year: the year you leave France

The year of departure changes the scope of French taxation^[7]:

• from 1 January to the date of departure, you are tax domiciled in France and taxed on all your income, French and foreign^[7];
• after that date, if you are non-resident, only your French-source income remains taxable in France^[2][7];
• in the following year you file a return form 2042 covering all income received from 1 January to your departure (foreign income being reported on form 2047), together with a form 2042-NR covering only French-source income from your departure to 31 December^[7];
• once that return has been processed, if you still have French-source income taxable in France, your file is transferred to the tax office for non-resident individuals (SIPNR)^[7].

The UK usually splits its tax year into a resident and a non-resident part when you move in or out^[10]. Because the French tax year is the calendar year and the UK tax year runs from 6 April to 5 April, your departure or arrival date must be consistent on both sides and match reality (actual move, start of the new job, family settling): inconsistencies are often where a challenge begins.

How to prove you have left France for tax purposes

Who has to prove what depends on the procedure. If you maintain that you were not required to file the return on which the authorities rely, because you were not domiciled in France, the official commentary places the burden of proof on the tax authorities^[13]. The same applies where they reassess you under the contradictory procedure and you dispute the proposed adjustment in time; if you accept it or do not reply within the time allowed, the burden passes to you^[13]. If you simply stop filing, you can be taxed by default (taxation d’office), and no formal notice is needed where you have moved abroad without filing your return^[14]. The authorities must then first show that you were required to file, but it is for you to prove that the assessment is excessive^[15][16].

Either way, a taxpayer with no tangible evidence is in a weak position. Build an evidence file from the outset:

• tenancy agreement or purchase deed for your home abroad, together with utility and internet bills;
• employment contract, company documents or evidence of business activity in your new country;
• school certificates for your children and evidence that your spouse or partner has moved with you;
• a certificate of residence from the foreign tax authority (in the UK, HMRC issues one to confirm UK tax residence to a foreign tax authority)^[11], together with local tax returns and assessments;
• termination of the lease, sale or letting of your French home, and change-of-address notifications to French bodies;
• bank statements and travel records (tickets, passport stamps, diaries) that allow your stays to be reconstructed.

No single document is decisive: it is the body of evidence as a whole that convinces. A foreign certificate of residence is useful, but it does not bind the French administration, which applies its own law and the relevant treaty.

What are the risks if France challenges your tax residency?

If the French tax authorities conclude that you remained a French tax resident, they can bring your worldwide income into the French tax base. The ordinary time limit for income tax reassessments runs to the end of the third year following the year in which the tax is due^[8]. It is extended to the end of the tenth year where an individual relies on a false tax domicile abroad, for income not declared in any return filed on time, and also where certain reporting obligations have not been met, including the declaration of foreign accounts (unless their total balances never exceeded €50,000 during the year)^[8]. Surcharges of 40% for deliberate failure and 80% for abuse of law or fraudulent manoeuvres may be added to the tax due^[9].

Securing your French tax residency position with a lawyer

Tax residency is one of the most disputed questions in international tax law. As part of our international tax practice, Alexis Germe can assess your situation under French domestic law and the applicable treaty, help you document your move, and represent you if the French authorities challenge your position.

Are you preparing to leave France, settling there, or already being questioned about your residence? Contact Alexis Germe with your planned or actual date of departure and the country concerned: this is the starting point of the analysis.

Sources and reference texts

1. Article 4 B of the French General Tax Code (CGI), current version (Légifrance)
2. Article 4 A of the French General Tax Code (CGI), current version (Légifrance)
3. BOFiP, BOI-IR-CHAMP-10, Income tax, scope and territoriality, taxable persons and tax domicile (published 28/07/2016)
4. Law No. 2019-1479 of 28 December 2019, Finance Act for 2020, Article 13 (Légifrance)
5. 2008 UK and France Double Taxation Convention, in force (GOV.UK)
6. Synthesised text of the Multilateral Instrument and the 2008 UK-France Double Taxation Convention (GOV.UK)
7. How to declare income for the year of departure abroad (impots.gouv.fr, updated 17/12/2025)
8. Article L. 169 of the French Tax Procedure Code (LPF), current version (Légifrance)
9. Article 1729 of the French General Tax Code (CGI), current version (Légifrance)
10. Tax on foreign income: residence and the Statutory Residence Test (GOV.UK)
11. Apply for a certificate of residence or letter of confirmation (HMRC, GOV.UK)
12. U.S. citizens and resident aliens abroad (Internal Revenue Service)
13. BOFiP, BOI-CTX-DG-20-20-10, burden of proof: which party bears it, § 90, 140 and 190 to 200 (published 02/08/2019)
14. Article L. 67 of the French Tax Procedure Code (LPF), formal notice before taxation by default, current version (Légifrance)
15. Article L. 193 of the French Tax Procedure Code (LPF), burden of proof after taxation by default, current version (Légifrance)
16. BOFiP, BOI-CTX-DG-20-20-20, burden of proof in the case of taxation by default, § 10 to 50 (published 01/07/2015)

Part of your income comes from another country: a pension, rent from a flat, a salary, dividends. Without a common rule, France and that other country could each tax the same sums in full. The good news is that you can usually avoid double taxation in France thanks to a double tax treaty, which shares out the right to tax between the two States and tells each of them how to neutralise the tax already paid. This guide explains how the France double tax treaty network works, with concrete British and American examples, and how to claim relief.

What is a double tax treaty with France?

A double tax treaty is an agreement, usually bilateral, between two States to avoid double taxation and prevent tax evasion. For each category of income, it decides which State may tax, whether that right is exclusive or shared, and how the State of residence must relieve any remaining double taxation.

In France, a duly ratified treaty prevails over domestic legislation under Article 55 of the French Constitution^[1]. A treaty never creates a tax, however. Under the approach laid down by the Conseil d’État, France’s highest administrative court (CE, Ass., 28 June 2002, no. 232276, Société Schneider Electric), the first question is always whether French law taxes the income; only then do you check whether the treaty prevents France from doing so^[2].

Treaties or agreements duly ratified or approved shall, upon publication, prevail over Acts of Parliament, subject, with respect to each agreement or treaty, to its application by the other party.

Article 55 of the French Constitution of 4 October 1958, unofficial translation ^[1]

Which countries have a double tax treaty with France?

France has one of the widest treaty networks in the world, with well over a hundred conventions on income tax. The French tax administration publishes the official list in its Bulletin officiel des finances publiques (BOFiP), which records the treaties in force on 1 January 2026 and the taxes each one covers^[3]. The full texts are available on impots.gouv.fr^[4]. For British and American readers, the two key treaties are the following.

• United Kingdom: the income tax convention signed in London on 19 June 2008, which entered into force on 18 December 2009 and applies in France from 1 January 2010 and in the UK from 6 April 2010 for income tax and capital gains tax^[3][5]. It has since been modified by the OECD Multilateral Instrument (MLI)^[6]. A separate convention of 21 June 1963 covers inheritance tax^[3].
• United States: the convention of 31 August 1994 on income and capital, amended by protocols of 8 December 2004 and 13 January 2009^[3][7]. A separate convention of 24 November 1978 covers estates and gifts^[3]. The IRS publishes the English text and the US Treasury technical explanations^[8].

Both treaties follow the OECD Model structure, with their own rules. For a detailed article-by-article reading of the British treaty, including pensions and inheritance, see our guide to the France-UK tax treaty.

Am I tax resident in France, the UK or the US?

Everything starts with residence. If each country considers you resident under its own law, the treaty settles the conflict with a series of tie-breaker tests, applied in order: permanent home, centre of vital interests, habitual abode, nationality and, as a last resort, agreement between the two tax authorities (Article 4 of the France-UK treaty)^[5]. The France-US treaty follows the same logic, with one specific rule: France treats a US citizen or green card holder as a US resident only if that person has a substantial presence in the United States, or would be a US resident rather than a resident of a third State under the first tie-breaker tests (Article 4, paragraph 2)^[7].

The French domestic criteria (home, principal activity, centre of economic interests) are explained in our article on French tax residency rules.

Which country taxes what under the France double tax treaty?

The table below summarises the main allocation rules in the France-UK^[5] and France-US^[7] treaties for individuals. It is simplified: each article contains conditions and exceptions to check against your own facts.

This guide focuses on individuals. If you are doing business in France through a French company, our separate guide covers the company side, including permanent establishment under tax treaties.

How does France avoid double taxation: tax credit or exemption?

When you are resident in France and the treaty allows the UK or the US to tax an item of income, that income is still included in the calculation of your French tax. France then grants a tax credit, and the treaty sets its amount in one of two ways^[5][7][9].

Tax credit equal to French tax: an exemption in all but name

For most income, the credit equals the French tax attributable to that income. The French tax on it is therefore cancelled entirely, whatever the amount paid abroad, but the income still pushes up the rate applied to your other income. The French administration confirms that this mechanism amounts to exempting the foreign income while preserving progressivity, and gives the formula: tax on worldwide income multiplied by the ratio of net foreign income to total net taxable income^[9]. The France-UK treaty adds one condition: you must actually be subject to UK tax on that income.

Such tax credit shall be equal: (i) in the case of income other than that mentioned in subparagraph (ii), to the amount of French tax attributable to such income provided that the resident of France is subject to United Kingdom tax in respect of such income; (ii) […] to the amount of tax paid in the United Kingdom in accordance with the provisions of those Articles; however, such credit shall not exceed the amount of French tax attributable to such income.

France-UK double taxation convention of 19 June 2008, Article 24, paragraph 3(a), authentic English text ^[5]

Foreign tax credit: relief limited to the tax paid abroad

For certain income listed in the treaty (in particular dividends, directors’ fees and income of artists and sportspeople), the credit equals the tax actually paid in the other State, capped at the French tax on that income^[5][7]. If the foreign tax is lower than the French tax, you pay the difference in France. If it is higher, the excess is not refunded. In both treaties, only tax « effectively and definitively borne » counts: tax withheld in excess of the treaty rate must be reclaimed from the source State, not credited in France^[5][7].

How do the UK and the US give relief for French tax?

If you are resident in the UK or the US, the logic is reversed: France taxes what the treaty allows (typically income from French property), and your country of residence gives relief.

• United Kingdom: French tax on French-source income is allowed as a credit against UK tax computed on the same income (Article 24, paragraph 1)^[5]. The credit cannot exceed the UK tax on that income. HMRC explains the calculation in helpsheet HS263, Relief for foreign tax paid^[10].
• United States: the US grants its citizens and residents a credit for French income tax, in accordance with and subject to the limits of US law (Article 24, paragraph 2)^[7]. Individuals claim it on Form 1116. The IRS points out that you cannot take a foreign tax credit on income you have excluded under the foreign earned income exclusion^[11].

A point of attention for UK residents: the France-UK treaty covers French CSG and CRDS, but Article 24, paragraph 2(c), only treats the taxes in points (i) to (iv) of Article 2 as « French tax » for the UK credit^[5]. The French tax administration reads this as expressly ruling out any credit for CSG and CRDS against UK tax^[9].

France-US double taxation: the specific case of American citizens

The United States taxes its citizens on their worldwide income wherever they live, and the France-US treaty preserves that right through a saving clause: apart from listed exceptions, the US may tax its citizens and residents as if the treaty did not exist^[7]. An American living in France is therefore taxable in both countries, and the treaty organises who gives way.

Notwithstanding any provision of the Convention except the provisions of paragraph 3, the United States may tax its residents, as determined under Article 4 (Resident) and its citizens as if the Convention had not come into effect […].

France-US tax convention of 31 August 1994, Article 29, paragraph 2, as replaced by the Protocol of 13 January 2009, authentic English text ^[8]

The exceptions in paragraph 3 matter in practice. They include Article 18, paragraph 1, on pensions and social security, and Article 24 on the elimination of double taxation^[7]. As a result:

• US Social Security paid to a French resident is taxable only in the United States; France includes it for the rate and grants a credit equal to the French tax^[7];
• conversely, French social security benefits paid to a US resident or to a US citizen, and pensions from a scheme established in France paid to a US resident, are taxable only in France, even where the recipient is a US citizen^[7];
• for a US citizen resident in France, France extends its « exemption-type » credit to certain US-source dividends and interest, for example from widely traded US companies, provided the taxpayer proves compliance with US federal income tax obligations (Article 24, paragraph 1(b))^[7].

How to claim double tax relief in France, the UK and the US

Treaty relief is rarely automatic. Depending on your situation, the main steps are:

• Declare foreign income in France: French residents report income received abroad on form no. 2047, attached to their annual return, and claim the corresponding tax credit^[12];
• Stop UK tax at source: French residents receiving UK pensions, purchased annuities, interest or royalties use form France-Individual to apply for relief at source or a repayment of UK income tax^[13];
• Prove your residence: the France-UK treaty requires a certificate of residence from the other State’s tax authority to claim its benefits (Article 30)^[5]. In France, form 5000-SD is the residence certificate intended for a foreign administration^[14]; in the US, Form 6166 is obtained by filing Form 8802^[15];
• Disclose treaty positions in the US: a US taxpayer who relies on a treaty provision to reduce US tax generally discloses it on Form 8833^[16];
• Use the mutual agreement procedure if you are still taxed twice: under the France-UK treaty as modified by the MLI, the case may be presented to either tax authority, within three years from the first notification of the taxation, or six years from the end of the tax year concerned (Article 26)^[6]. The France-US treaty also provides a mutual agreement procedure (Article 26)^[7].

Beware of anti-abuse rules: since the MLI, the France-UK treaty contains a principal purpose test: a treaty benefit may be refused where obtaining it was one of the principal purposes of an arrangement^[6]. The France-US treaty has its own limitation on benefits article (Article 30)^[7].

Why speak to a tax lawyer about the France double tax treaty?

Each treaty has its own definitions, protocols and anti-abuse clauses, and both States apply their domestic rules first. A misreading can mean paying twice or, conversely, claiming an exemption the treaty does not grant and facing a reassessment. Taking cross-border tax advice in France means identifying the applicable text, checking how it interacts with French law and securing your returns on both sides of the Channel or the Atlantic.

Taxed in two countries, or about to move to or from France? Ask Alexis Germe to review your double taxation, with your latest tax assessments from both States at hand: they make it possible to check quickly whether the treaty has been applied correctly and what may still be reclaimed.

Sources and reference texts

1. Article 55 of the French Constitution of 4 October 1958 (Légifrance)
2. Conseil d’État, Assemblée, 28 June 2002, no. 232276, Société Schneider Electric (Légifrance)
3. BOFiP, BOI-ANNX-000306, list of tax treaties concluded by France, in force on 1 January 2026 (published 29/04/2026)
4. Les conventions internationales, texts of France’s tax treaties (impots.gouv.fr)
5. 2008 UK and France Double Taxation Convention, in force (GOV.UK, HMRC)
6. Synthesised text of the Multilateral Instrument and the 2008 UK-France Double Taxation Convention (GOV.UK, HMRC)
7. France-US convention of 31 August 1994 on income and capital, consolidated version as amended by the protocols of 8 December 2004 and 13 January 2009 (impots.gouv.fr)
8. France tax treaty documents: treaty, protocols and technical explanations (IRS)
9. BOFiP, BOI-INT-DG-20-20-100, elimination of double taxation (published 19/02/2020)
10. Relief for foreign tax paid, Self Assessment helpsheet HS263 (GOV.UK, HMRC)
11. Foreign Tax Credit (IRS)
12. Form no. 2047, declaration of income received abroad (impots.gouv.fr)
13. Double Taxation: UK-France (SI 2009 Number 226), Form France-Individual (GOV.UK, HMRC)
14. Form no. 5000-SD, certificate of residence for a foreign tax administration (impots.gouv.fr)
15. Form 6166, Certification of U.S. Tax Residency (IRS)
16. About Form 8833, Treaty-Based Return Position Disclosure (IRS)
17. BOFiP, BOI-INT-CVB-USA-10, France-US convention on income and capital, § 25 (CSG and CRDS within the treaty) (published 19/02/2020)
18. Notice 2047-NOT for 2025 income, credit equal to the French tax and US-source dividends of US citizens (impots.gouv.fr, 2026 edition)

A flat in Paris, a rental property in Bordeaux, French dividends, a French pension: if you have kept any of these after moving abroad, your relationship with the French tax authorities has not ended. You remain liable to non-resident tax in France on part of that income and wealth. The rules are not intuitive: a minimum rate of income tax, social charges that depend on where you are insured, a wealth tax limited to French real estate. This guide explains, tax by tax, what a non-resident still owes in France in 2026, and what changes if you live in the United Kingdom or the United States. If you are still preparing your move, read also our guide to the exit tax on your shareholdings.

Who counts as a non-resident for French tax purposes?

You are a non-resident of France for tax purposes when you meet none of the tests of French tax domicile set out in Article 4 B of the French General Tax Code (Code général des impôts, or CGI): your home or principal place of stay, your main professional activity and the centre of your economic interests^[1]. Where France and another country both regard you as resident, the tie-breaker rules of the applicable tax treaty decide.

Once you are non-resident, your liability in France becomes limited. Your French-source income is calculated under the same rules as for residents but, in principle, none of the charges deductible from total income can be deducted^[2]. French-source income includes, among others, income from property situated in France, income from French securities and income from professional activities carried on in France^[3].

Which French income is taxable for non-residents?

How is rental income from French property taxed for non-residents?

Rent from a property situated in France is French-source income^[3], and tax treaties leave France the right to tax it: both the France-UK and the France-US treaties provide that income from immovable property may be taxed in the State where the property is situated^[19][21]. Income from unfurnished lettings is taxed under the progressive income tax scale, in the property income category^[6].

Two regimes are available. Under the micro-foncier regime, which applies where the gross property income of your tax household does not exceed €15,000 a year, a flat 30% allowance is deducted automatically. Above that threshold, or by election, the actual expenses regime (régime réel) applies; the election is binding for three years^[8]. The net income is then subject to the minimum rate of income tax reserved for non-residents, and to social charges.

Do non-residents pay French social charges on rental income?

Yes, in principle. Social levies apply to the French property income and property capital gains of non-residents, at an overall rate of 17.2% on unfurnished lettings^[6][7]. There is, however, an important exception. Since 1 January 2019, people affiliated to a compulsory social security scheme, other than the French one, in a country of the European Economic Area or in Switzerland are exempt from the CSG and the CRDS: they pay only the 7.5% solidarity levy^[6][7].

The French tax authorities state that, despite Brexit, British residents continue to benefit from this exemption^[6][7]. A resident of the United States, who is not covered by a European scheme, pays the full social levies. To claim the exemption, you tick the relevant boxes (8SH or 8SI) on form 2042 C when filing your return^[6].

Furnished lettings in France: how are non-residents taxed?

Income from furnished accommodation, including a holiday let, falls into a different category: business profits (bénéfices industriels et commerciaux, or BIC). The social levies on this income have risen to 18.6%, a new rate applicable from 2025 income, while the same CSG and CRDS exemption applies to people insured in the EEA, Switzerland or the UK, who remain liable to the 7.5% solidarity levy^[6].

French dividends and pensions paid to non-residents

Dividends paid by a French company to a non-resident individual bear a withholding tax of 12.8%^[18]. The France-UK and France-US treaties cap French tax on portfolio dividends at 15%^[19][21]; as the French domestic rate is lower, 12.8% applies in practice.

Pensions depend heavily on the treaty. For UK residents, the France-UK treaty generally reserves private pensions to the UK, whereas French government pensions remain taxable only in France unless the recipient is a UK resident and national who is not also a French national^[20].

What is the French minimum tax rate for non-residents?

This is the rule that surprises most non-residents. Under Article 197 A of the CGI, the income tax of a non-resident cannot be lower than 20% of net taxable income up to the upper limit of the second band of the scale, and 30% above that limit^[4]. For 2025 income, declared in 2026, that limit is €29,579, following the indexation of the scale by the 2026 Finance Act^[5].

The minimum rate is not inevitable. If you show that the average rate of French tax, applied to your worldwide income, would be lower, that average rate applies to your French-source income instead^[4]. You declare your worldwide income on your French return; it only sets the rate, and only your French income is taxed^[8].

[…] a. Receive French-source income; in that case, the tax may not be lower than an amount calculated by applying a rate of 20% to the portion of net taxable income that is less than or equal to the upper limit of the second band of the income tax scale, and a rate of 30% to the portion above that limit; […] however, where the taxpayer shows that the rate of French tax on all of his or her French-source and foreign-source income would be lower than these minimum rates, that rate applies to his or her French-source income.

Article 197 A of the CGI, version in force, unofficial translation ^[4]

Capital gains tax on French property for non-residents

When a non-resident sells a property in France, the gain is subject to a flat levy of 19%^[9], plus social levies of 17.2%, or only the 7.5% solidarity levy if you are insured in the EEA, Switzerland or the UK^[12]. Holding period allowances reduce the taxable gain: for income tax, 6% a year from the sixth to the twenty-first year and 4% for the twenty-second year, which means full exemption after 22 years^[10]; for social levies, the exemption is reached after 30 years^[12]. A further surtax, from 2% to 6%, applies to net gains above €50,000, other than gains on building land^[11].

The notary pays the tax at completion, using form 2048-IMM^[12], and both the France-UK and France-US treaties leave France the right to tax these gains^[19][21].

Do I need a French tax representative when selling?

Sellers domiciled outside France must, in principle, appoint an accredited tax representative in France. Residents of a European Union Member State, Iceland or Norway are exempt^[12]. UK and US residents are not, unless one of the automatic exemptions applies: a sale price of €150,000 or less, a gain that is fully exempt from both income tax and social levies because of the length of ownership, or a sale covered by the former main residence exemption described below^[13].

Are there exemptions for non-residents selling a French home?

Two exemptions are open to non-residents, under strict conditions^[14]:

• the former main residence: the gain is fully exempt if you sell your former French home by 31 December of the year after you left France, provided you moved to an EU Member State or to a country that has concluded with France agreements on administrative assistance against tax fraud and on assistance in tax recovery, which is the case of the UK and the US^[27], and the property was not made available to anyone else in the meantime^[14];
• the €150,000 exemption: available once per taxpayer to nationals of an EU or EEA State who were tax resident in France continuously for at least two years at some point, subject to time limits^[14]. British or American nationals without EU or EEA nationality do not qualify.

French wealth tax (IFI) for non-residents

The impôt sur la fortune immobilière (IFI) is a wealth tax on real estate. Non-residents are liable only on their real estate situated in France, held directly or through companies to the extent of the value representing French property, where their net taxable real estate exceeds €1.3 million on 1 January^[15]. The rates range from 0.5% to 1.5%, with a reduction for estates between €1.3 million and €1.4 million^[16].

The IFI is declared together with your income tax return, using form 2042-IFI if you file on paper; if you have no income to declare in France, a specific form 2042-IFI-COV applies^[17]. The rules on deductible debts are strict and deserve a case-by-case review: our guide to the French wealth tax explains how IFI applies to your French property, including deductible debts and the UK and US treaties.

French inheritance and gift tax for non-residents

Under Article 750 ter of the CGI, where the deceased or the donor is not domiciled in France, property situated in France remains taxable in France; assets situated abroad also become taxable when they are received by an heir or recipient who is domiciled in France and has been for at least six of the previous ten years^[23]. Separate treaties with the UK (inheritance) and the US (estates and gifts) can change this allocation. Our guide on how inheritance is taxed in France covers these questions, including the rules for heirs and owners living abroad.

Local taxes on a French second home

As an owner, you remain liable to the taxe foncière (property tax)^[28]. If you keep a furnished home at your disposal in France, it is treated as a second home and may be subject to the council tax on second homes (taxe d’habitation sur les résidences secondaires)^[24], which some municipalities may increase^[25]. Every owner must also file an occupancy declaration by 1 July each year through the « Gérer mes biens immobiliers » section of their online account, unless nothing has changed since the last declaration^[6].

How do non-residents file a French tax return?

If you receive French-source income taxable in France, you must file an annual income tax return, in principle online, with the department in charge of non-resident individuals (Service des impôts des particuliers non-résidents)^[17]. Rental income goes on form 2042, with form 2044 under the actual expenses regime^[8]; the CSG and CRDS exemption is claimed on form 2042 C^[6].

Non-resident tax in France for UK and US residents

UK residents and the France-UK tax treaty

If you are UK resident, you normally pay UK tax on your foreign income, including rent from an overseas property; the domicile-based exemption that some people relied on no longer applies from 6 April 2025, although recent arrivals may qualify for the new Foreign Income and Gains relief^[22]. Double taxation is relieved by the 2008 France-UK convention: France taxes the French rent or gain, and the UK allows the French tax as a credit against the UK tax on the same income^[19]. Our article on the France-UK double tax treaty explains the treaty article by article.

US citizens and residents with French income

The 1994 France-US convention also leaves France the right to tax income from, and gains on, French real property, and caps French tax on portfolio dividends at 15%^[21]. The United States, which taxes its citizens and residents on their worldwide income, allows a credit for the French income tax paid, subject to the limits of US law^[21]. As a US resident is not covered by a European social security scheme, the full French social levies apply to French property income and gains^[12].

Advice from a French tax lawyer for non-residents

Non-resident taxation combines French domestic law, the applicable treaty and the rules of your country of residence. Working with a tax lawyer in France helps you identify what remains taxable in France, choose the right options on your return and regularise past years where necessary.

Do you own property, investments or income in France while living in the UK or the US? Have your next French non-resident return reviewed by Alexis Germe before you file it: the minimum rate, the social security exemption and treaty credits are the most frequent sources of error, and the easiest to address at that stage.

Sources and references

1. Article 4 B of the French General Tax Code, version in force (Légifrance)
2. Article 164 A of the French General Tax Code, version in force (Légifrance)
3. Article 164 B of the French General Tax Code, version in force (Légifrance)
4. Article 197 A of the French General Tax Code, version in force (Légifrance)
5. Loi n° 2026-103 du 19 février 2026 de finances pour 2026, Article 4 (Légifrance)
6. As a non-resident who receives income from real property, is this property income or business income? (impots.gouv.fr)
7. As a non-resident, am I liable for social security contributions and the social levy? (impots.gouv.fr)
8. Je suis non-résident et je donne en location un bien non meublé : comment sont imposés mes revenus fonciers ? (impots.gouv.fr)
9. Article 244 bis A of the French General Tax Code, version in force (Légifrance)
10. Article 150 VC of the French General Tax Code, version in force (Légifrance)
11. Article 1609 nonies G of the French General Tax Code, version in force (Légifrance)
12. Je vends un bien immobilier : comment et à quel taux suis-je imposé ? (impots.gouv.fr)
13. BOI-RFPI-PVINR-30-20, désignation d’un représentant accrédité (BOFiP-Impôts)
14. Je vends un bien immobilier : est-ce que je bénéficie des mêmes exonérations que les résidents ? (impots.gouv.fr)
15. Article 964 of the French General Tax Code, version in force (Légifrance)
16. Article 977 of the French General Tax Code, version in force (Légifrance)
17. Je suis non-résident : comment et où déclarer et payer mon IFI ? (impots.gouv.fr)
18. Article 187 of the French General Tax Code, version in force (Légifrance)
19. 2008 UK and France Double Taxation Convention, in force (GOV.UK)
20. DT7264, Double Taxation Relief Manual: France, treaty summary (HMRC)
21. Convention between the United States and France on taxes on income and capital, signed 31 August 1994 (IRS)
22. Tax on foreign income (GOV.UK)
23. Article 750 ter of the French General Tax Code, version in force (Légifrance)
24. Article 1407 of the French General Tax Code, version in force (Légifrance)
25. Article 1407 ter of the French General Tax Code, version in force (Légifrance)
26. DT7261, Double Taxation Relief Manual: France, admissible taxes (HMRC)
27. BOI-ANNX-000508, list of countries with which France has an exchange of information or tax recovery assistance clause (BOFiP-Impôts)
28. Je suis non-résident : modalités de calcul de l’impôt (impots.gouv.fr)

Are you leaving France for London, New York or elsewhere while holding company shares or a sizeable portfolio? Then one question comes first: does the French exit tax apply to you? Under Article 167 bis of the French General Tax Code (CGI), France can tax the unrealised gains on your shares when you move abroad, even though you have sold nothing^[1]. This guide explains who is caught, how the charge is calculated, what changes for a move to the United Kingdom or the United States, and how to reduce the cost lawfully.

What is the French exit tax?

The French exit tax is a departure charge. When you transfer your tax domicile out of France, the gains built up on certain shareholdings are treated as if realised, by reference to the value of the shares on the date of departure^[1].

Nationality is irrelevant: a British or American citizen who has lived in France long enough is exposed exactly like a French national.

The key point is that the exit tax is not always paid. It is often declared, placed under a deferral of payment (sursis de paiement) and later cancelled if the shares are kept long enough^[1]. Whether that deferral is automatic depends on your destination, which is why a move to the UK or the US needs particular care.

Who has to pay exit tax when leaving France?

For unrealised gains on shares, three conditions must be met on the date you stop being a French tax resident within the meaning of Article 4 B of the CGI^[2]. Our guide to French tax residency explains how that date is determined.

The residence test: 6 years out of the last 10

The exit tax only applies to people who have been domiciled in France for tax purposes for at least six of the ten years preceding their departure^[1][3]. A British executive who arrived four years ago is, in principle, outside its scope.

Taxpayers domiciled in France for tax purposes for at least six of the ten years preceding the transfer of their tax domicile outside France are taxable, upon that transfer, on the unrealised gains recorded on the corporate rights, securities, shares or rights […] held, directly or indirectly, by the members of their tax household on the date of that transfer […]

Article 167 bis of the CGI, I, 1, current version, unofficial translation ^[1]

Exit tax thresholds: €800,000 or 50% of profits

On the date of departure, you and your tax household must hold:

• shareholdings representing at least 50% of the profits of a company^[1]; or
• securities with a total value exceeding €800,000^[1].

All securities held by the household, directly and in some cases indirectly, are counted^[1]. For an unlisted company, a documented valuation is essential.

Which assets are subject to the French exit tax?

The charge covers:

• unrealised gains on company shares, securities and similar rights^[1];
• earn-out receivables arising from an earlier sale of shares^[1][3];
• gains on which tax was previously deferred, for example on a contribution of shares to a holding company^[1][3].

The conditions differ for these items. Earn-out receivables are caught under the 6-year residence test alone, whatever the value of your holdings, and gains previously deferred become taxable on departure whatever the length of your residence and the value of your holdings^[1]. By contrast, property held directly, cash and life insurance contracts (assurance vie) are not covered by Article 167 bis^[1].

How is the French exit tax calculated?

The unrealised gain is the difference between the value of the shares on the date of departure and their acquisition price or value. It bears income tax and social charges as a gain on the sale of securities^[1][3].

By default, the flat tax (prélèvement forfaitaire unique, or PFU) applies: 12.8% income tax^[4], plus social charges. Since the Social Security Financing Act for 2026, social charges on most investment income have risen to 18.6%^[5][6], bringing the overall flat tax rate to 31.4%^[4][5]. An election for the progressive income tax scale remains available^[4]. The exceptional contribution on high incomes (3% or 4% of reference income above €250,000 for a single person, €500,000 for a couple)^[16] and the differential contribution on high incomes^[17] are both calculated on reference income (revenu fiscal de référence), and the official commentary excludes unrealised gains taxed on departure from reference income for the year of departure, whether or not payment is deferred^[18]. These contributions therefore do not apply to the unrealised gains themselves. They can still apply to your other income of that year, the differential contribution now expressly applying in the year of departure from 2026 income^[17], and the exceptional contribution is charged, at a historic rate, on gains previously deferred on a contribution of shares to a holding company^[19]; the official return places that contribution under the same deferral of payment as the income tax^[23].

For example, shares bought for €10,000 and worth €1,500,000 on departure carry an unrealised gain of €1,490,000: at 31.4%, about €468,000 of tax, before any deferral.

Deferral of payment: EU destinations versus the UK and the US

Automatic deferral: the EU and countries with the right agreements

Deferral is automatic if you move to an EU Member State, or to another country that meets the conditions quoted below, including an agreement with France on the recovery of tax claims^[1][3]. You declare the tax but pay nothing until an event ends the deferral.

Payment of the tax […] shall be deferred where the taxpayer transfers their tax domicile outside France to a Member State of the European Union or to another State or territory that has concluded with France an administrative assistance agreement to combat tax fraud and evasion as well as a mutual assistance agreement on recovery with a scope similar to that provided for by Council Directive 2010/24/EU of 16 March 2010 […], and which is not a non-cooperative State or territory within the meaning of Article 238-0 A.

Article 167 bis of the CGI, IV, current version, unofficial translation ^[1]

Moving from France to the UK: exit tax after Brexit

Since the Brexit transition period ended on 31 December 2020, the UK is outside the EU, so it must meet the non-EU conditions. The 2008 France-UK tax treaty provides for exchange of information, but contains no article on assistance in the collection of taxes^[7]. That assistance comes instead from the OECD and Council of Europe Convention on Mutual Administrative Assistance in Tax Matters, under which HMRC states that it helps other countries recover tax debts^[21]. The French tax authorities list the UK among the countries with which France has a recovery assistance clause for income tax, a clause they require for Article 167 bis^[20], and the official notice to form 2074-ETD names the UK among the States where deferral is automatic for departures since 1 January 2025^[19]. A move to the UK therefore qualifies for automatic deferral.

The list is published in the notice for each year of departure, so check the edition that covers yours^[19]. For the wider picture, see our article on the tax treaty between France and the UK.

Moving from France to the US: what the treaty says

The France-US tax treaty includes an article on assistance in collection (Article 28)^[8], and the official notice to form 2074-ETD names the United States among the States where deferral is automatic, without any distinction based on nationality^[19]. Article 28 nevertheless provides that this assistance is not given in respect of nationals, companies or other entities of the State receiving the request^[8], so the United States is not bound to help collect French tax from a US citizen. No official text says how this exclusion affects automatic deferral for an American citizen returning home: on the texts, that point is assessed case by case.

Deferral on request: tax representative, guarantees and the 90-day deadline

Where deferral is not automatic, it may be granted on express request. You must declare the gains, appoint a representative established in France and provide guarantees to the tax authorities before you leave^[1]. The amount of those guarantees is set at 12.8% of the total gains and receivables concerned^[1].

Timing is critical. For departures since 22 November 2019, the request, made on form 2074-ETD with a proposed guarantee, must be filed at least 90 days before the transfer of domicile^[3]. Decide in June, leave in July, and the window has already closed. Without deferral, the tax is payable under the ordinary rules.

What ends the French exit tax deferral?

Deferral ends, and the tax becomes payable, on the sale, buy-back, redemption or cancellation of the shares^[1]. For residents of countries outside the automatic-deferral list, a gift of the shares also ends the deferral, unless you show that the gift was not made mainly to avoid the tax^[1]. If you later move again, for instance from Lisbon to London, you must inform the French non-residents’ tax office within two months, and a new request may be needed^[3].

French exit tax and UK or US taxation: avoiding a double charge

Your new country will also look at the gain when you eventually sell. Under both treaties, gains on ordinary shareholdings are, as a rule, taxable only in the country where the seller is resident^[7][8]. The France-UK treaty nevertheless preserves each State’s right to tax, under its own law, gains made by a person who has been resident there at any time during the previous six fiscal years (Article 14, paragraph 6)^[7]. If you sell within that period after moving to the UK, France keeps its right to tax the gain only by reason of that paragraph, and Article 24, paragraph 4(a), then requires France, not the UK, to eliminate the double taxation, as if the gain arose in the UK^[7][22]. French law provides the mechanism in Article 167 bis: tax paid in your new State of residence on the sale is credited first against the French social charges and then against the income tax on the gain, in proportion to the share of the foreign tax base that the French gain represents, and never beyond the French tax due^[1].

5. Gains from the alienation of any property other than that referred to in paragraphs 1, 2, 3 and 4 shall be taxable only in the Contracting State of which the alienator is a resident.

France-UK double taxation convention of 19 June 2008, Article 14, paragraph 5 (official English text) ^[7]

In the UK, capital gains tax is currently charged at 18% or 24% depending on your income, with an annual exempt amount of £3,000^[10]. Since 6 April 2025, individuals arriving in the UK after at least 10 consecutive tax years of non-UK residence may claim relief on foreign gains for up to four tax years^[9]. Claiming it has consequences, such as losing the annual exempt amount^[9]. The French and UK calendars must be modelled together.

The France-US treaty lets the United States tax its citizens and residents as if the treaty did not exist, subject to exceptions that include relief from double taxation^[8]. An American leaving France may thus face French exit tax and, on a later sale, US tax on the same shares. On the French side, the same Article 167 bis credit applies to the US tax paid on that sale, within the same limits^[1].

How to reduce the French exit tax legally

There is no universal solution, but these avenues deserve examination before you leave:

• Keep the shares: the tax on the unrealised gains is cancelled (or refunded, if you paid it on departure) if you still hold the shares 2 years after departure, or 5 years if their total value exceeds €2.57 million^[1][3]. This cancellation does not extend to the tax on earn-out receivables or on previously deferred gains^[1].
• Return to France: if you come back while still holding the shares, the tax relating to them can be cancelled^[1].
• Rely on a fall in value: if the shares are eventually sold for less than their value on departure, the tax is recalculated downwards^[1].
• Secure the valuation: a documented valuation of unlisted shares reduces the risk of challenge.
• Plan the timing: the residence test, the thresholds and the 90-day deadline can all turn on a few months.

On expiry of a period of two years following the transfer of tax domicile outside France […], the tax […] relating to the unrealised gains […] shall be cancelled automatically […] where the securities […] remain, on that date, in the taxpayer’s assets. By way of derogation, this period is extended to five years where the total value defined in the first paragraph of 1 of I of this article exceeds €2.57 million on the date of the transfer of the taxpayer’s tax domicile outside France.

Article 167 bis of the CGI, VII, 2, current version, unofficial translation ^[1]

An arrangement whose only purpose is to escape the exit tax can be set aside under the abuse of law procedure, with heavy penalties^[14].

French exit tax 2026: what has changed?

The 2019 framework still applies. The Finance Act for 2026 (Law no. 2026-103 of 19 February 2026) left Article 167 bis of the CGI unchanged^[1][11]: the 2-year and 5-year periods remain for 2026 departures.

The real change for 2026 is the cost: higher social charges make the exit tax more expensive^[5][6], and the differential contribution on high incomes now expressly applies to taxpayers on their income for the year of departure^[17]. Check the text in force on your exact departure date.

French exit tax reporting obligations after you leave

In the year after departure, you file form 2074-ETD with your French income tax return^[3][12]. While the deferral runs, follow-up returns are filed with your income tax return: form 2074-ETS3 for any year in which an event ends the deferral or allows the tax to be cancelled (for example the end of the 2-year or 5-year period), and otherwise, in most cases, the simplified form 2074-ETSL. For departures since 2019, the official notice exempts you from the simplified form in years without any such event where you only hold unrealised gains under full deferral^[3][13].

These obligations are often forgotten abroad. Failing to meet them can cost you the benefit of the deferral and make the tax immediately payable, with penalties^[1][15].

Why take advice from a French tax lawyer before leaving France?

The exit tax rarely stands alone: the date of your change of residence, the applicable treaty, your remaining French income and the rules of your new country all interact with it. Taking advice before leaving France helps you measure the real cost of leaving and secure each step, from valuation to follow-up returns.

Alexis Germe, tax lawyer at the Bordeaux Bar, advises business owners and individuals moving abroad, in person or remotely.

Is a departure from France on the horizon? Discuss your plans with Alexis Germe, in complete confidence, before you set your departure date: an overview of your shareholdings and portfolio is enough for a first exchange.

Sources and reference texts

1. Article 167 bis of the French General Tax Code (CGI), current version (Légifrance)
2. Article 4 B of the French General Tax Code (CGI), current version (Légifrance)
3. Je quitte la France, suis-je concerné par l’Exit Tax ? (impots.gouv.fr, updated 10 March 2026)
4. Article 200 A of the French General Tax Code (CGI), current version (Légifrance)
5. Article L. 136-8 of the French Social Security Code, current version (Légifrance)
6. Law no. 2025-1403 of 30 December 2025 on the financing of social security for 2026, Article 12 (Légifrance)
7. 2008 UK and France Double Taxation Convention, in force (GOV.UK)
8. France-US convention of 31 August 1994 on income and capital, consolidated version as amended by the protocols of 8 December 2004 and 13 January 2009, Articles 13, 28 and 29 (impots.gouv.fr)
9. HMRC Capital Gains Manual, CG26400, Relief for new residents on foreign gains (from 6 April 2025) (GOV.UK)
10. Capital Gains Tax: rates and allowances (GOV.UK)
11. Law no. 2026-103 of 19 February 2026, Finance Act for 2026 (Légifrance)
12. Form 2074-ETD, return on the transfer of tax domicile outside France (impots.gouv.fr)
13. Form 2074-ETS3, exit tax follow-up return (impots.gouv.fr)
14. Article L. 64 of the French Tax Procedure Code (LPF), current version (Légifrance)
15. BOFiP, BOI-RPPM-PVBMI-50-10, gains and receivables on the transfer of tax domicile outside France (published 31/10/2012, commentary predating the reform introduced by the Finance Act for 2019)
16. Article 223 sexies of the French General Tax Code (CGI), exceptional contribution on high incomes, current version (Légifrance)
17. Article 224 of the French General Tax Code (CGI), differential contribution on high incomes, current version (Légifrance)
18. BOFiP, BOI-RPPM-PVBMI-50-10-20, unrealised gains on departure: tax base, § 110 (reference income) (published 31/10/2012, version in force)
19. Notice 2074-ETD-NOT for departures in 2025, list of States where deferral is automatic and historic rate of the exceptional contribution (impots.gouv.fr, 2026 edition)
20. BOFiP, BOI-ANNX-000508, provisions requiring an exchange of information or recovery assistance clause, and list of countries with such clauses (published 08/10/2025)
21. HMRC Debt Management and Banking Manual, DMBM560205, Mutual Assistance in the Recovery of Debt under the OECD and Council of Europe Convention (GOV.UK)
22. BOFiP, BOI-INT-CVB-GBR-10-20, France-UK convention: gains made by a former resident, § 220 to 240 (published 18/06/2013)
23. Form 2074-ETD for departures in 2025, section 7, gains and receivables under deferral of payment (impots.gouv.fr, 2026 edition)