Expats in France face a tax blitz from new socialist President Francois Hollande while many are still dealing with the fall out of from telling the government about any windfalls that may be due from inheritance trusts.
Any of the 200,000 British expats who miss the deadline for disclosing any likely inheritance face hefty fines.
The wealth tax demands they must tell the taxman about any assets in trust, including insurance, property, stocks and shares.
Failing to make a declaration is expensive – a £200,000 trust attracts a 5% tax penalty of £10,000 on top of tax between 0.25% and 0.5% of the trust value.
Expats failing to handover the tax and any penalties due could face jail.
The trouble is the new government has not hinted at when the deadline is due – it was set for June 15 – and financial advisers and lawyers cannot help as they often have difficulties keeping track of trust beneficiaries who are not their clients.
Meanwhile, Hollande is busy drafting a raft of tax increases ready to put before the French parliament in July that include hiking the top rate of income tax to 75% for those earning more than that include hiking the top rate of income tax to 75% for those earning more than 1 million euros.
The Hollande government is also reforming wealth tax back to pre-Sarkozy levels of 0.55% to 1.8% on personal riches exceeding 1.3 million euros.
To counter claims that the tax is excessive, Hollande is capping the amount of earnings that can be taxed at 85% of household income.
Hollande is also attacking tax breaks – niches fiscales – to fund his austerity cuts and spending. Many ordinary French earners are u8nimpressed at his proposal to slash the breaks from a generous 18,000 euros a year plus 4% of income to a maximum 10,000 euros.
