Moving Abroad: How Notaries Can Help

Moving Abroad: How Notaries Can Help

Moving abroad may have significant implications in terms of asset management, matrimonial law and succession. A French national living abroad may find themselves in a situation where the laws of several States are potentially applicable.

What Is the Matrimonial Status of Expatriates?

Expatriate couples may freely choose the law governing their matrimonial property regime by entering into a marriage contract before a notary.

In the absence of a marriage contract, since 29 January 2019, EU Regulation 2016/1103 of 24 June 2016 provides that the matrimonial property regime of spouses is in principle governed by the law of the State of their first habitual residence following the marriage.

Furthermore, many European countries recognise civil partnerships. Since 29 January 2019, EU Regulation 2016/1104 of 24 June 2016 allows partners to choose, before or during their partnership, the law applicable to the property effects of their partnership. Expatriates may opt for the civil partnership regime of the State of their habitual residence, that of the nationality of one of the partners, or that of the place where the partnership was registered. French nationals living abroad may therefore elect for the French pacte civil de solidarité (PACS).

What Are the Tax Implications of Moving Abroad?

The tax rules applicable to an expatriate depend on the location of their tax domicile. To avoid dual tax residency, France has concluded bilateral tax treaties with various States, the application of which is conditional upon the taxpayer providing evidence that their income is taxable as a resident of another State. These treaties set out a series of successive criteria for determining tax domicile, including the place of permanent habitual residence of the taxpayer and their family, the centre of vital interests, the duration of stay, and nationality.

Example in respect of income tax: where the tax domicile is situated outside France, the taxpayer is in principle taxable only on income derived from French sources. Conversely, where the tax domicile is in France, all income is taxable regardless of its origin.

As regards the gratuitous transmission of assets (by way of succession or gift), either a double taxation treaty exists between France and the country in which the expatriate resides, or Article 750 ter of the General Tax Code provides that the assets transmitted are taxable in France, subject to the donor/deceased having their tax domicile in France, the assets being situated in France — even where neither the donor or deceased nor the donees or heirs have their tax domicile in France — or the donees/heirs/legatees having been domiciled in France for at least six years during the preceding ten years.

However, Article 784A of the General Tax Code provides that the amount of gratuitous transfer duties paid, where applicable, outside France may be credited against the tax due in France. The same applies in respect of the real property wealth tax (IFI): in the absence of an applicable international tax treaty, Article 980 of the General Tax Code provides in particular that tax paid outside France may be credited against the tax due in France in respect of assets situated outside France.

Why Consult a Notary?

It is strongly advisable to consult a notary before any planned relocation abroad in order to anticipate as fully as possible the consequences of such a life decision. The notary will be able to conduct a full assessment of the situation to minimise potential difficulties. They will verify the existence of a bilateral international treaty between France and the new country of residence. Once abroad, it remains possible at any time to contact a notary.

Legal Guide for French Nationals Abroad | Notaires de France (www.notaires.fr)

Since 21 November 2020, a notary may receive a notarised power of attorney with remote appearance, which can facilitate the signing of documents for expatriates — in particular in the case of gifts, for which an authentic power of attorney is indispensable.