Lifestyle Financial Planning
Tax Year End Planning: What Actually Matters Before 5 April 2026
The UK tax year ends on 5 April 2026. Maximise your pensions, ISAs and CGT allowances before they reset or lose them permanently.
Mar 4, 2026
France’s predictable tax system hides the complexity of leaving. Returning British expats face UK taxation on income, assets, pensions, and inheritance. This guide explains exit tax, assurance vie, residency rules, and key financial steps from departure to your first UK tax year.
Most British expats in France believe they are financially well positioned because they are:
In France, that feels like a plan. It is also where the gap starts.
The gap is not about what you have saved. It is about what happens to those savings, pensions and shareholdings the moment UK tax residency restarts. Since April 2025, the UK has fundamentally changed how it taxes returning residents, with a new residence-based system replacing the old domicile framework and a new four-year foreign income and gains regime. France can apply exit tax to shareholdings when you leave, depending on your assets and circumstances, and enforces forced heirship rules that your UK will may not recognise.
This guide is intended to highlight key financial considerations when returning to the UK. It is not personalised advice, and individual outcomes will depend on your specific circumstances. Whilst this article explains the financial picture of returning to the UK from France, and why decisions made in the six months before you land matter more than those made after, French tax treatment depends on individual circumstances. Advice from a qualified French tax specialist should be taken before making any decisions.
France removes many triggers that normally force financial planning. The tax system is clear and predictable, pensions are paid reliably, property transactions are straightforward through the notaire system, and healthcare is integrated. You can live for decades with a straightforward relationship to tax, pensions and property.
Then you return to a country that taxes worldwide income based on residence, applies capital gains tax at 18-24% with an annual exemption of only GBP 3,000, applies inheritance tax at 40% on estates above GBP 325,000, and treats assurance vie contracts as chargeable events on surrender or maturity. France may apply its own exit tax when you leave, potentially catching unrealised gains on shareholdings depending on your asset values and residency history, and enforces forced heirship rules that your UK will does not recognise.
The shift can be immediate, and depending on your circumstances, may start counting from the day you arrive in the UK. The expats who get this wrong are not careless. They are simply assuming the return is the reverse of the departure. It is not. The return involves re-entering a tax system, and the tax consequences that may surface when UK residency restarts are frequently overlooked by returning expats who focus on the logistics of the move rather than the tax calendar.
French exit tax may apply when leaving France for certain high-value shareholdings, depending on your residency history and asset values, but only where specific thresholds and conditions are met. It does not apply to all departing residents. Where it applies, this is a tax on unrealised gains calculated at the point you cease to be a French resident.
The French exit tax operates as follows:
For a British expat holding a qualifying stake in a French company above the relevant threshold, exit tax exposure could be significant depending on the size of unrealised gains. By way of illustration only: if shares were acquired for EUR 500,000 and are now worth EUR 2,000,000, the unrealised gain would be EUR 1,500,000. Exit tax at 30% could amount to EUR 450,000, subject to individual circumstances and any available reliefs or deferrals.
The timing of payment matters. Exit tax is due when you formally notify French tax authorities that you are leaving, which typically happens through your final tax return or through a specific declaration to the tax office. However, strategic planning can sometimes allow deferral or reduce the taxable gain through legitimate restructuring before departure.
The key complication for UK residents is that HMRC does not recognise French exit tax as a credit against UK capital gains tax. If you sell the shareholdings after returning to the UK, you pay UK CGT on the gain. The EUR 450,000 paid to France in exit tax does not reduce your UK tax exposure. This is where professional advice becomes essential. Understanding your shareholding position and planning the timing of disposals around your departure can sometimes reduce the combined French and UK tax cost.
If you qualify for the EU/EEA deferral, the exit tax is postponed if you move within the EU or to another EU/EEA country and maintain substantive tax connections to that jurisdiction. However, moving to the UK ends the deferral. If you have previously deferred exit tax by moving to another EU country, returning to the UK will trigger the deferred tax.
French tax treatment will depend on local rules and your individual circumstances. This guide provides a high-level overview only, and you should seek advice from a suitably qualified French tax adviser before taking any action.
The Statutory Residence Test determines whether you are UK tax resident for any given tax year. It is not optional. It applies automatically, and it operates on a strict framework of day counts and connecting ties.
If you spend 183 or more days in the UK during a tax year (6 April to 5 April), you are automatically UK tax resident. If you spend fewer than 183 days, residency depends on how many ties you maintain to the UK. The ties that count are:
For someone returning from France after a long absence (non-resident for three or more tax years), the thresholds are more generous. Depending on the facts, a difference of even one month in timing could affect whether French pension or rental income falls within the UK tax net for a given year. Moving back to the UK in March can result in you being treated as UK tax resident for the entire 2025/26 tax year, depending on how the Statutory Residence Test and split-year rules apply to your situation. Moving back in May may give you a clean start from 6 April, potentially qualifying for split-year relief, though this will depend on your individual circumstances.
Split-year treatment is not elective. It applies automatically only where the statutory conditions under the SRT are met, and whether those conditions are satisfied depends on individual circumstances.
The hidden tax consequences that surface when UK residency restarts are frequently missed by those focusing on the logistics of the move rather than the tax calendar and the timing of residency.
From 6 April 2025, the UK introduced a new Foreign Income and Gains (FIG) regime that replaces the old remittance basis. This is the single most important relief available to long-term expats returning from France.
You may qualify as a 'qualifying new resident' if you have been non-UK resident for at least 10 consecutive tax years before your return, subject to confirmation of your individual residency history. For the first four tax years of your UK residence, you can claim 100% relief on:
For a returning expat from France, this regime creates a protected corridor. Where the FIG conditions are met, French rental income from retained properties, dividends from French investments, and gains on the sale of overseas assets may be relieved from UK tax for up to four years after your return. The precise treatment depends on individual circumstances and should not be assumed without professional confirmation. This is a fundamental change from the old system, which required non-doms to keep foreign income offshore to avoid tax.
The conditions are precise. You must have been non-UK resident for all 10 consecutive tax years before your return (so if you left the UK in 2015 and return in 2026, you qualify; if you left in 2017, you do not). You must also claim the relief each year on your Self Assessment return, and understand that UK-source income is fully taxable from day one.
The practical implication is clear. As an illustration: if French property generates EUR 40,000 in rental income per year, that income could be exempt from UK tax for the first four years where FIG applies and the conditions are met. Actual treatment will depend on individual circumstances. After four years, it becomes fully taxable at UK marginal rates (potentially 45% if you also have UK employment income).
There is also a Temporary Repatriation Facility (TRF) available in 2025/26 through 2027/28 for individuals who previously used the remittance basis. The Temporary Repatriation Facility allows certain previously unremitted foreign income and gains to be brought to the UK at a reduced tax rate, where the conditions are met. The rate is 12% for 2025/26 and 2026/27, rising to 15% for 2027/28.
Once UK tax resident, the UK generally taxes worldwide income, subject to treaty provisions and individual circumstances.
For 2025/26:
A returning expat with French pension (retraite) of EUR 50,000 (approximately GBP 42,000) plus UK employment income of GBP 50,000 pushes into the 40% higher rate band. With National Insurance, the effective marginal rate approaches 47%.
The French pension is treated as foreign employment income under the France-UK DTA. It is taxable only in the UK, not France. You must declare it on UK Self Assessment, and it counts alongside all other income for tax band purposes.
For a returning expat earning GBP 200,000+ (typical for senior professionals), the effective tax rate is approximately 42-45% once National Insurance is included. This is a shift from the French progressive system, where marginal rates typically peak at 45% only above EUR 250,000 (approximately GBP 212,000).
If you qualify for FIG, your French income remains exempt. UK-source income (UK employment, UK rental income, UK pension) is taxable immediately. The dividend allowance is just GBP 500.
The UK CGT annual exempt amount is just GBP 3,000. Rates from April 2025 are:
French property disposals after your return to UK residence may be subject to both UK CGT and French social charges, depending on your circumstances and the applicable treaty provisions. French taper relief reduces social charges by 6% per year for years 6 to 21 of holding, and 4% from year 22 onwards.
If you own French property for 15 years and sell after returning to UK residency, French social charges drop from 26% to approximately 6% due to taper relief. France may allow a credit for UK tax paid, up to the French rate, subject to the specific facts and treaty provisions applicable to your situation.
The following are general considerations, not personal recommendations. Your position will depend on individual circumstances.
The practical sequence:
Assurance vie is one of the most misunderstood areas for UK-returning expats from France. What felt like a tax-efficient savings vehicle in France can become a potential tax liability in the UK, depending on how the policy is structured and how it is accessed. In France, assurance vie contracts enjoy favourable treatment: gains are not taxed while the contract remains open, and on death, proceeds pass to beneficiaries with limited tax.
Depending on the structure and type of contract, becoming a UK resident may cause an assurance vie to be treated as a 'chargeable event' for UK tax purposes. Any surrender or withdrawal may trigger a chargeable event, and accumulated gains could be subject to UK income tax, potentially at your marginal rate. The precise treatment depends on contract structure, segmentation, and timing.
Professional advice should always be taken before making any changes to these arrangements.
The following is a simplified illustration only. Actual figures will depend on individual circumstances.
For an expat holding a EUR 500,000 assurance vie contract for 20 years with a EUR 150,000 accumulated gain, UK tax liability on surrender could be GBP 45,000 or more (at 45% rate). However, time apportionment relief can provide significant protection. The gain is apportioned across the entire holding period, and only the portion arising after UK residency is taxable. If you held the contract for 20 years in France and 1 year in the UK:
This is the difference between a GBP 45,000 tax bill and a GBP 3,000 bill. The practical implication is to avoid surrendering assurance vie contracts in the year you return to the UK if possible. If you need liquidity from the contract, wait until year two or later when the apportioned gain is smaller.
The French pension (retraite) is taxed only in the UK under the France-UK DTA, not in France. You must declare it on UK Self Assessment at marginal rates (up to 45%). This is favourable compared to French taxation, where retraite is subject to social charges.
The UK pension annual allowance is GBP 60,000 for most individuals (2025/26), reduced by GBP 1 for every GBP 2 above GBP 260,000 income, down to a floor of GBP 10,000.
If you transferred your UK pension to a QROPS while in France, review whether the arrangement is still appropriate. Since October 2024, the EEA/Gibraltar exclusion has been removed, and many older QROPS arrangements carry high charges and lock-in periods.
For most returning expats, consolidating UK pensions into a single SIPP before or shortly after return provides greatest flexibility. Pension contributions in your first UK year can generate immediate tax relief, reducing income tax liability when earnings may be highest.
French occupational pensions (AGIRC-ARRCO) are treated like retraite: taxable only in the UK, subject to UK Self Assessment.
French and UK inheritance systems are incompatible. France enforces forced heirship (reserve héréditaire): one child gets one-half reserved, two children get two-thirds reserved, three+ children get three-quarters reserved. The UK allows testamentary freedom: you can leave your estate to anyone in any proportion.
Succession law and inheritance tax are separate issues. UK residence may affect UK IHT exposure under the new long-term residence rules, while French property may still raise separate French succession and forced-heirship considerations. A UK will, French property ownership, Brussels IV elections, and UK IHT exposure should be reviewed together, but they should not be treated as the same legal question.
If you have significant assets in France, French courts may still apply French law to those assets. Your estate may be split between English law assets and French law assets.
Reviewing and rewriting your will on returning to the UK is worth considering, given the fundamental differences between French and English succession law. Clarify where your estate is governed, how French property passes, whether trusts should hold French assets, and address forced heirship expectations to avoid family disputes.
The residence-based IHT system subjects you to 40% IHT on worldwide assets once you become a long-term resident. The nil rate band is GBP 325,000. The residence nil rate band adds GBP 175,000 for estates with qualifying residential property. For high-net-worth expats, these thresholds are often insufficient.
One of the most valuable benefits of leaving France is exemption from French CSG (9.2%) and CRDS (0.5%) charges, totalling 11.7% in social charges on top of income tax for French residents.
For a UK resident receiving French income:
For EUR 50,000 annual French rental income:
French rental income usually remains within the French tax system because it is income from French-situated property. A UK resident may also need to declare the income in the UK, subject to the UK-France treaty, foreign tax credit relief, and any applicable UK FIG claim. The interaction between French non-resident tax, social levies or solidarity charges, and UK tax should be modelled carefully before assuming the income is effectively tax-free.
The figures above are illustrative only and based on simplified assumptions. Actual tax positions will differ depending on individual income levels, treaty application, and the specific nature of the French income received. These should not be treated as a reliable estimate of your personal position.
However, many UK-returning expats fail to declare French income to HMRC, assuming exemption from French tax means UK exemption. It does not. All foreign income must be declared on UK Self Assessment. Ensure French property income transfers to a UK account so it is properly tracked.
If you hold property and movable assets in France exceeding EUR 1,300,000, you are currently subject to French wealth tax (Impôt sur la Fortune Immobilière, or IFI). This is an annual tax on the value of your worldwide real property, not on gains or income.
The IFI rate is 0.55% on wealth above EUR 1,300,000, increasing to 1.8% on wealth above EUR 10 million. For a retiree with a EUR 2,000,000 property and EUR 500,000 in investments, the annual IFI bill would be approximately EUR 5,500. This is a recurring annual cost that compounds over decades.
For most returning residents, IFI liability ceases on departure from France, though the position should be confirmed based on your specific asset profile and residency dates. Where IFI liability has ceased, French wealth tax will no longer apply on an ongoing basis. This creates an exit planning opportunity. If you are considering realising gains on property or investments to restructure your wealth, doing so before departure avoids the interaction with both French exit tax and IFI. Leaving France may remove exposure to French IFI on worldwide real estate assets, but it does not automatically remove IFI exposure altogether. A UK resident who continues to own French real estate may still fall within French IFI if their net French real estate assets exceed the relevant threshold, currently €1.3 million. This should be reviewed before departure, particularly where French property is held directly, through an SCI, or through other property-heavy structures. This is a significant benefit of repatriation that is sometimes overlooked.
Your French property does not trigger annual wealth tax from the UK side either. It does, however, trigger UK inheritance tax if you become a long-term resident and have worldwide IHT liability.
You need 35 qualifying NI years for the full new State Pension (currently GBP 230.25 per week, 2025/26). Each missing year reduces entitlement by approximately GBP 342 per year. Over a 20-year retirement, that is nearly GBP 7,000 per missing year.
From April 2026, voluntary Class 2 NI contributions are no longer available to expats. Until that point, contributions cost just GBP 3.50 per week (GBP 182 per year) to fill gaps. The potential return relative to the contribution cost can be significant, though this depends on individual circumstances including life expectancy and future State Pension rules.
From April 2026, Class 2 contributions are no longer available to expats. Only Class 3 contributions remain at GBP 17.75 per week (GBP 923 per year), more than five times the Class 2 rate. New Class 3 applicants need at least 10 qualifying years or 10 continuous UK years.
If you are planning to return and have NI gaps, reviewing your voluntary contribution options before departure may be worth considering. For many returning expats, Class 2 contributions represented a cost-effective way to fill gaps relative to the State Pension benefit received, though any decision will depend on individual circumstances including life expectancy, future State Pension rules, and your wider financial position.
The practical infrastructure of your financial life needs restructuring before you return. French bank accounts typically become harder to maintain as a non-resident, and in some cases banks will close your accounts entirely. Ensure funds are moved to a UK account before your French residency ends.
Currency exposure matters if you hold significant EUR savings. Converting a large EUR balance to GBP in a single transaction creates exchange rate risk. Many returning expats benefit from a phased currency conversion strategy, moving funds in tranches over several months rather than in one lump sum. This spreads the exchange rate risk and allows you to monitor market movements.
If you maintain offshore accounts (Channel Islands, Isle of Man, or similar jurisdictions), these remain accessible after your return. Under the FIG regime, income generated in those accounts may be exempt for the first four years if you qualify. However, you must declare the existence of all offshore accounts on your UK Self Assessment tax return, regardless of whether the income is taxable.
For returning expats from France, professional planning is most valuable when it:
The goal is not to "manage money." It is to manage the transition, so that the wealth you built in France survives the re-entry into the UK tax system intact, and so that French tax obligations on departure do not erode that wealth unnecessarily.
If you are reading this and thinking:
Then the next step is usually a structured conversation focused on clarity, not implementation. Not because something is urgent. But because France is the rare environment where calm, unhurried planning is possible, and that window closes the moment you land in the UK. The complexity of the return involves more moving parts and tighter timings than most expats anticipate.
The best time to build a return plan is while you are still resident in France, while your options are still open, and while the cost of getting it right is a conversation rather than a correction.
The following points illustrate the types of questions worth considering - they are not a substitute for personalised advice.
Returning to the UK from France is not about:
It is about:
Most British expats in France only realise what they should have planned after the first HMRC correspondence arrives or after French exit tax is assessed. Those who build the plan while still in France rarely regret it.
The information in this article is general in nature and does not constitute financial, tax or legal advice. Tax treatment depends on individual circumstances. French tax advice should be sought from a suitably qualified adviser in France. The value of any tax reliefs depends on individual circumstances and tax rules may change.
Skybound Wealth UK is a Trading Style of Skybound Wealth Management Limited who are authorised and regulated by the Financial Conduct Authority.
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