This edition considers portfolio continuity on arrival, the timing of a family gift, and the difference between owning ETFs and building a portfolio.

Arriving in France: continuity, not a restart

Arriving in France: continuity, not a restart

Moving to France need not mean rebuilding your investments from scratch. For clients who planned before departure, a suitably structured Luxembourg life assurance policy can continue under the French assurance vie framework.

The Portable Private Client Portfolio, or PCP, is the structure discussed in this month’s Connexion article. While the holder is UK resident, UK investment bond rules apply. The familiar 5% withdrawal rule is tax deferral, not a tax exemption, and should not be carried into French planning unchanged.

With a qualifying contract, arrival can involve updating the existing arrangement rather than surrendering it and starting again. Its original opening date may matter for the French eight-year tax rules; recognition must be checked for the particular policy.

The practical work is straightforward to describe: notify the insurer, review French reporting, revisit the beneficiary clause and align investment currencies with future spending.

The useful advantage is continuity. It depends on choosing and documenting the right structure before the move. Planning ahead can be rather more valuable than shopping again on arrival.

A family gift, and a residence rule worth knowing

Mr and Mrs X, both tax resident outside France, wish to give €125,000 in total to each child, Theo and Eric. Both children became French tax residents two years ago and had no earlier French tax residence in the relevant ten-year period.

Assume the cash is legally situated outside France when the gifts take effect. Article 750 ter of the French Tax Code limits France’s reach over foreign assets received from non-resident donors. Its worldwide scope for a French-resident recipient requires at least six years of French tax residence during the ten calendar years preceding the year of the gift. Those years need not be consecutive.

Under these assumptions, the gifts fall outside French gift-tax territorial scope. This is not a €125,000 tax allowance, nor a blanket exemption for anyone who arrived recently.

French-situated assets can remain taxable. The legal location of cash, previous residence, any relevant treaty, foreign taxes and reporting require review.

The opportunity is real; the residence timeline and the assets must be equally real.

Fictional illustration. All names and circumstances are fictional.

Softer growth does not remove the need for discipline

Softer growth does not remove the need for discipline

The 5th October briefing describes a familiar tension: softer economic news can support markets, while high energy costs and borrowing rates continue to test businesses and households. It is an environment for judgement, rather than a confident prediction about the next central bank move.

Equities: retain broad exposure where the investment horizon allows, while examining concentration in large technology companies and other popular themes. An index can be diversified by name and concentrated by weight.

Bonds: distinguish dependable credit quality from an eye-catching yield. Shorter maturities can limit sensitivity to interest-rate changes; longer bonds may suit particular objectives but bring more price risk.

Liquidity: protect foreseeable spending needs in the relevant currency. Sterling investments and a euro household budget deserve separate attention.

ETFs can help implement these choices transparently, but the allocation remains the important decision. Several inexpensive funds do not automatically make a balanced portfolio.

The objective is to participate without making the household’s plans depend on a single market scenario.

Prudential International: An Insurance Bond for British Expatriates in France

For British expatriates who are French tax residents, Prudential International’s International Prudence Bond (France) combines an assurance vie framework with international investment flexibility. Applications are reserved for UK nationals resident in France.  

Available in sterling, euros and US dollars, it starts from c£20,000, €25,000 or US$35,000, allowing investors to begin modestly and add later. (mandg.com)  

Investment choices include PruFund Growth and PruFund Cautious, professionally managed portfolios spreading investments across global shares, bonds, property and cash. Their smoothing mechanism moderates some market fluctuations, although capital remains exposed to investment risk. Selected additional funds provide further choice. (international.mandg.com, mandg.com)  

French taxation is attractive. Withdrawals contain both original capital and a proportionate investment gain: if a €100 withdrawal comprises €90 capital and €10 growth, only €10 enters the taxable calculation. The actual proportions depend on policy performance.  

Comparing applicable flat rates with the progressive income tax scale can identify the better outcome, taking account of other investment income, policy age and social charges. (bofip.impots.gouv.fr, impots.gouv.fr)  

Succession planning adds another advantage: qualifying death benefits attributable to premiums paid before age 70 benefit from a €152,500 allowance per beneficiary, per insured person, across relevant policies. (impots.gouv.fr, bofip.impots.gouv.fr)  

For expatriates considering returning to Britain, continued ownership offers useful continuity, with UK taxation replacing French treatment where applicable.  

Together, these features support investing, drawing income and passing wealth on within one adaptable insurance framework.

An ETF portfolio still needs an architect

An ETF portfolio still needs an architect

DTB can build a portfolio using ETFs as the investment building blocks, allocating across global equities, government and corporate bonds, and other suitable listed exposures. The starting point remains your objectives, income needs, investment horizon and tolerance for loss.

The work goes beyond selecting funds: set asset weights, examine overlapping holdings, choose currency exposure, assess replication and liquidity, then rebalance as circumstances change. Access depends on the account or insurance contract.

Costs deserve the same discipline. ETF fund charges are often lower than those of actively managed funds, but they are not the entire bill. Advice, management, custody or policy charges, dealing spreads and currency conversion may also apply.

For illustration only, annual fund costs of 0.20% on €200,000 equal €400. At 1%, they equal €2,000. The €1,600 difference excludes every other charge and assumes a constant portfolio value; these are not DTB tariffs.

The downsides remain: market losses, index concentration, tracking differences and, where relevant, currency or counterparty risk. An ETF makes an exposure accessible; it does not make it safe.

Three children: how much can we leave tax free in France?

Each child can receive €100,000 from each parent under the ordinary succession allowance, assuming it has not been used by gifts in the preceding 15 years. For three children, that means €300,000 from each parent: €600,000 together.

Eligible assurance vie death benefits linked to premiums paid before age 70 can add €152,500 per child, per insured parent, across all policies. Six allowances total €915,000.

Combined potential: €1,515,000 without French succession or assurance vie death taxes, before any applicable social charges.

This requires the right ownership, beneficiary clauses and distribution across both parents’ estates. Ordinary succession allowances do not transfer between spouses. Later-life premiums follow different rules.

The UK’s basic £325,000 nil-rate band applies per person, not per child. Spouse transfers and qualifying home allowances can raise a couple’s available threshold to £1 million; conditions apply. French relief does not automatically remove UK liability.

The allowances exist. Making them work together is the planning task: protect the surviving spouse while preserving the intended inheritance for each child.