HELPLINE: 
What the CSG increase means for expats and how to limit the impact
French residents with investment income will face higher social charges following the adoption of the Social Security Financing Bill (PLFSS) for 2026. For expats in France it’s important to understand what is affected in order to manage overall tax exposure.
What is changing. The CSG (Contribution Sociale Généralisée) rate on capital income will increase from 9.2% to 10.6%. The CRDS (0.5%) and the solidarity contribution (7.5%) remain unchanged. This brings social contributions on affected capital income to 18.6%, up from 17.2%. Combined with income tax under the flat tax (PFU), the overall tax rate on some investment income will now reach 31.4%.
Income insights. The increase applies mainly to financial investment income, including dividends and interest from securities accounts, certain capital gains on financial assets and some savings products. These rules apply regardless of where the investments are held, meaning foreign income is also caught if you are a French tax resident.
Assurance vie contracts, savings products (like PELs) and rental income remain unaffected.
UK investments. For British expats, it is important to remember that UK ISAs and GIAs (general investment accounts) are taxable in France. The ISA wrapper is not recognised and income and gains are taxed under French rules, potentially including higher social charges from 2026.
What about S1 holders? The PLFSS 2026 does not change the S1 regime. Holding an S1 continues to provide an exemption from certain French social contributions, depending on the nature of the income and individual circumstances.
Take action. With social charges on investment income rising, reviewing how assets are structured has never been more important. Using vehicles that sit outside the scope of the increase, such as assurance vie, can reduce the long-term impact on your wealth.
Speak to our team for guidance on how French social charges could impact your financial planning.