Tax for French resident with financial holdings in the UK

aroominyork

My son has UK/Australian dual citizenship (he moved to the UK from Oz in 2001) and now lives in France where he recently became a French tax resident. He has some investments in the UK: cash, equities, ISA, LISA. Our question is how these are treated for tax by both the UK and French authorities for interest/income, dividends and capital gains? For example, would France recognise UK ISA/wrapped investments or consider them equally taxable as unwrapped investments? We appreciate he might need to take professional advice in France but thought we would start here and see if someone can provide or point us towards an overview.

poseidon1

aroominyork said:

My son has UK/Australian dual citizenship (he moved to the UK from Oz in 2001) and now lives in France where he recently became a French tax resident. He has some investments in the UK: cash, equities, ISA, LISA. Our question is how these are treated for tax by both the UK and French authorities for interest/income, dividends and capital gains? For example, would France recognise UK ISA/wrapped investments or consider them equally taxable as unwrapped investments? We appreciate he might need to take professional advice in France but thought we would start here and see if someone can provide or point us towards an overview.

You  ( and your son ) will find the guidance note below helpful with regard to the tax treatment of UK isas in foreign climes.

https://www.opesfidelio.eu/your-uk-isa-is-not-tax-free-income-in-an-eu-country/#:~:text=ISA's are only recognised for,the UK for Ordinary Residents.

The basic position is no other foreign tax jurisdiction recognises the tax free nature of UK isas. 

aroominyork

Thanks, poseidon1 - that's helpful. So ISAs/LISAs are essentially treated as GIAs by the French tax system. Does that mean interest/dividends need to be included each year in the French tax return? And that capital gains on the assets would be calculated when he sells them?

If that is correct, if (for ease of calculation) he converted Acc. units into Inc. units, would that be considered a disposal for capital gains purposes?