strategy to get away

shiredeon

i am not to worried about the property in france as it only stands me in at 200k, if i keep my assets in uk and mostly accessable via the net i should be able to dispose of it given time, my son intimates he will rent my flat in uk so
i'm sure we can come to some arrangement if you know what i mean, it's looking too complicated to cover everything but i want to at least give it my best shot,

With regards to renting property it's been my experience that you scarcely get any better than investing in a building society after management fees, it's only saving grace seems to be escalating house prices but they can't go on for ever.

With regards to my uk company i will give my shares to my partner and retire from the board.

I really don't see currency fluctuation as much of a risk long term as they tend to even out after a while, it may even be an advantage.
I suppose i am a bit of a maverick as i have no insurance on my house and haven't for years but i feel the risk minimal and i certainly do not lose any sleep over it

I realise no one will give me advice but some ideas of what you would do in my possition would be good, i can fine tune it at my leisure,

I have an ifa thats allied to my pension company but he only turns up when he feels he may be able to sell me some life cover, hence my tendency to diy,

dunstonh

I have an ifa thats allied to my pension company but he only turns up when he feels he may be able to sell me some life cover, hence my tendency to diy,

If he is allied to your pension company that means he isnt an IFA. The clue is in the name "Independent Financial Adviser". As an IFA you cannot be tied to any company. It sounds like you have been seeing a insurance salesman tied to the pension company.

Tied agents cannot advise on investment/pension portfolios and your transaction requires a speciality that a tied agent just isnt going to have. Indeed, with the overseas link, you need an IFA that specialises in ex pats to France ruling out a number of IFAs as well.

cheerfulcat

I really don't see currency fluctuation as much of a risk long term as they tend to even out after a while, it may even be an advantage.

shiredeon, I spent twenty-three years with a household income largely based in dollars and punts/Euros, with the household based in the UK. I can assure you that it is a rollercoaster ride. It's all very well saying that it will even out in the end but in the meantime it means a possible 10% - 15% ( or more! ) drop in your income in any given year; you have to prepare for that, and you don't appear to have done. In any case it is madness deliberately to put yourself in a position of having liabilities in one currency and income in another. Bear in mind too that on top of exchange rate fluctuations you will pay commission when exchanging sterling for Euros. All in all, £25,000 p/a does not leave a lot of wiggle room.

I have an ifa thats allied to my pension company but he only turns up when he feels he may be able to sell me some life cover, hence my tendency to diy,

As dh says, this is not an IFA.

I am a great believer in DIY investing, for people who are prepared to do the donkey work. But this is different; you need advice from someone who knows the tax laws involved, and who understands the possible pitfalls.

shiredeon

ok all i really appreciate your input, perhaps i need to see an ifa, i'll post his recomendations after all it'll still be one mans view, thanks again.

EdInvestor

It would appear that the first thing to do is to put your house on the market.There's not much point in discussing all the other issues until you have actually obtained the capital to invest.

If the house sale raises 500k, you ought to be able to invest that to make 20k pa (with an HYP, a few other bits and pieces such as perhaps some property funds and a biggish chunk of cash) with the rental income from the Manchester flat making up the difference. Adding in the flat, the asset allocation looks OK for your age to me.

French tax wise we already know that the rental income will be covered by the UK personal allowance and the French will accept that.So the key issue is to find out how the French authorities will treat UK dividends and capital gains on the HYP (and locally saved cash in euros).

As you know, there is no further tax payable by the UK basic rate taxpayer on divis ( it is covered by the divi tax credit) and you don't need to worry about CGT because you won't be trading the portfolio. If you abide by UK law, will the French accept that under the double tax treaty? In which case, it's effectively tax free.

Or will they require you to meet their rules on taxation of share investments?Or do the French rules only apply to local shares? This is the key factor you need to find out.

Re the EPP, can you say which company it's with and what it is invested in - is it the With-profits fund?

cheerfulcat

Ed, shiredeon needs to generate an income in Euros.

You don't know enough about French tax law to know which questions to ask.

IMHO your advice is irresponsible.

EdInvestor

So the key issue is to find out how the French authorities will treat UK dividends and capital gains on the HYP (and locally saved cash in euros).

As you can see I have mentioned that.

He doesn't necessarily need to generate all his income in Euros.There are numerous expats all over the world who generate income in currencies other than that of the country they live in, and for many good reasons (how do you think all those Brits in Europe are coping with their sterling based pensions for heavens sake?)

Just because you personally found it a strain juggling three currencies - which is somewhat more complex than two, I know, I've done it too - doesn't mean other people are specially bothered by currency fluctuations, over time they tend to even out as shiredeon says.

You need to take account of currency risk, but there are a number of ways of dealing with that, apart from generating all your income in one currency ( especially if the overseas move may only be temporary.)

I don't think you can have read my post anyway,as I say that he needs to be clear on the way the French deal with various types of income including income generated locally and overseas.

cheerfulcat

Just because you personally found it a strain juggling three currencies - which is somewhat more complex than two, I know, I've done it too - doesn't mean other people are specially bothered by currency fluctuations, over time they tend to even out as shiredeon says.

Nowhere did I say that I found it a strain to juggle three currencies, I said that it was a rollercoaster, and it was, and will be for anyone who is paid in one currency and has all of his expenses in another. It's one thing if you don't have a choice but to deliberately choose to look for income in a foreign currency is just daft. Would you invest all - or even half - of your capital in US HY shares if they offered a 5% yield? Look at what has happened to the pound relative to the dollar over twenty-five years. The high was $2.32/£1, the low was $1.29. That is a huge fluctuation in value; on a small income, that doesn't leave a lot of room for manoeuvre.

EdInvestor

It's one thing if you don't have a choice but to deliberately choose to look for income in a foreign currency is just daft.

Let's look at what choices there are.

Perhaps you'd like to list some income-orientated investment choices denominated in the Euro and receiving favourable tax treatment in France which could replace the OP's choice of an HYP for the equity component of his portfolio.

Bear in mind that he doesn't feel comfortable dealing with investment discussions in a foreign language.Also bear in mind he hasn't got much slack, so basically needs to DIY where possible to reduce charges.

cheerfulcat

EdInvestor wrote:

Perhaps you'd like to list some income-orientated investment choices denominated in the Euro and receiving favourable tax treatment in France which could replace the OP's choice of an HYP for the equity component of his portfolio.

I can't because I happily admit to knowing nothing about investment in France. What I do know is that such income producing investments are available. The UK does not have a monopoly on income seekers!

Investing in France

"From an investment point of view, virtually everything that is available in the UK can also be found in France, with the added advantages that investments are in Euros, protecting your capital and income from currency movements and you do not need international transfers to access your money."

Bear in mind that he doesn't feel comfortable dealing with investment discussions in a foreign language.Also bear in mind he hasn't got much slack, so basically needs to DIY where possible to reduce charges.

We are talking here about someone who has no investment experience at all, who is in what appears to be a very stressful and insecure position, with time constraints. He is moving ( permanently, he said ) to a country with vastly different tax laws from those we know. He doesn't have to deal in a foreign language, there are plenty of UK expats who are specialists. He cannot afford to DIY.