Intelligent investment  Are your assets appropriately invested for life in France? Do your current investments match your long-term plans? This page gives a very brief outline of the key choice of investments available to French residents - including  bank deposits,  assurance vie - and French rental property. A key role of Cabinet Gregory is to help clients identify appropriate investments. We will first build a clear picture of your current financial situation and lifetime objectives, including where you might want to live in the future, expected income, future capital expenditure, appetite for risk, etc. We then can discuss solutions -  including those investments likely to provide higher returns and lower taxes (as a French resident) consistent with your objectives. Financial investments in France The Livret A is an instant access tax-free interest account, earning 2.25% pa.  Each member of the family can open one - with up to 15300€. In addition, you can open a Livret de Developpement Durable enabling a further 6000€ per person and providing the same interest (tax free) as the livret A. These accounts are ideal for short term cash requirements. Many bank savings accounts (generally called Compte sur Livret or Compte d’Epargne) are offering higher promotional rates - but after 3 months, most fall below 2% (and this interest is fully taxable at 31.3%). Fixed length deposits are known as Comptes à Terme. Rates are currently around 1-2% before tax, so you should consider other ways to invest your money. Cabinet Gregory can help you set up an internet savings account fully guaranteed (up to 100000€ per person) by the French government and providing up to 4% pa over 3 years. Please  contact us for further details. France offers various vehicles for low tax financial investments. The most popular are the Assurance Vie and the Plan d’Epargne en Actions (PEA). These are financial wrappers allowing most income & gains to roll up without tax until withdrawn. Inside the wrapper, you buy & sell your investments - the better wrappers offer a list of several hundred funds to choose from. You can take funds out at any time and any tax due on withdrawal is usually reduced if the wrapper has been held a minimum number of years.  If you are looking for security, you may wish to consider the guaranteed Euro Funds available within French Assurance Vie. Rates in 2011 should remain over 3% (net of fees and Social Charges) -  probably higher than most bank savings accounts. NEW Cabinet Gregory has recently negotiated a high quality internet assurance vie with zero entrance charge.  The Euro Fund is fully guaranteed (up to 70000€ per person) by the French government under the standard protection rules. The remuneration currently provides 3.75% until 31.12.2012.  Please contact us for further details/ Offshore financial investments are not appreciated by the French authorities and French residents must take care to respect the rules. If you have such investments or are wondering what to do with funds outside France, you should take specific steps - preferably well before arriving in France. The use of offshore trusts by French residents is complex, but can be appropriate in certain circumstances.  Contact us if you would like to discuss how offshore assets should be managed - especially given the current drive against "les paradis fiscaux". Rental property in France French rental property can be an excellent investment. - It could provide a holiday home for you and your family that covers its own costs. - It could provide long term income suitable as a “pension top-up” in France. - If carefully chosen and maintained, the capital value should rise - at least in line with European inflation. You must not only plan for possible up-front renovation, but also appropriate management & maintenance. The rules for evicting tenants are also very strict - even if they are no longer paying any rent. All income from rental property in France must be declared each year and will be subject to French income tax. French property is also subject to French Capital Gains, Wealth, Inheritance and Gift taxes. Given the current low rates of interest, you may wish to consider a  French mortgage which can be offset against rental income for tax purposes. Be careful to understand the differences between furnished and unfurnished rentals - the rules and tax treatment are very different in France. Many clients ask if they should use a Société Civile Immobilière (SCI) or a foreign company to own property. This is a complex question and requires legal advice - especially if you are thinking of renting the property at any stage. Please contact us for further information. If you pay higher levels of French taxes, you should consider investing in special property schemes such as Scellier, Malraux or Monument Historique. For all of these schemes, a large part of the price is tax-deductible against your income.  Please contact us to discuss the rules and obligations for each type of scheme and some exampes of properties currently available. C Copyright © 2012 Cabinet Gregory                                                                     Tel:   +33 (0)1 5320 9027           Latest modification: 15 January  2012                                                              Email: info@cabinetgregory.com