These case studies offer insight into Private Wealth Solutions for French resident clients looking for estate planning solutions that adapt to their needs.

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Case study 1: Multiple asset managers and wealth transfer

A wealthy French resident, 55 years old, married under the regime of separation of property, with 3 children, owning an asset portfolio managed on discretionary basis of €5m in a French bank and a €10m portfolio in a Swiss bank.

Needs

  • Retaining his current banks as investment managers
  • Financial protection of his wife
  • Succession planning for his children
  • Asset protection

Solution

  • Multiple asset managers. Life insurance solution allowing the client to retain his  trusted advisors and to use multiple asset managers within the policy.
  • Wealth transfer. The spouse will be appointed as one of the beneficiaries in order to support the children’s needs and education.
  • Asset protection. Luxembourgish regulatory frame as the strongest protection mechanism within EU.
  • Taxation. Income tax deferral during the lifetime of the policy, no inheritance tax on the death capital between spouses, favourable inheritance tax regime applicable to the benefit payable to the children 
 
 

Client about to become deemed domiciled

A French couple with 2 children have been living in London for 7 years and working respectively as trader for a bank and successful entrepreneur. They currently hold interests generating cash accounts in France comprised of their bonus and salary accumulated while resident in France. The banking interests are not taxable in the UK until they are remitted (or transferred) to the UK based on the remittance basis tax regime. They are aware that this tax regime will be subject to a remittance basis charge of £30K since they have been resident in the UK for at least 7 tax years out of the previous 9 years . They plan to return to France in 5 years.

Needs

  • Tailor-made investment solution
  • Tax compliant solution as an alternative to the remittance basis of taxation
  • Portable solution to France

Solution

  • Investment solution. Premium invested into an internal insurance fund managed by an investment manager in accordance with an investment policy in line with the risk profile of the client.
  • Tax compliance.  In the UK: Tax deferred surrender up to 5% of the premium provided that the latter was financed by clean capital. In France: Once resident in France, no taxation until surrender, 30% flat tax on surrender gains and death benefit subject to beneficiary tax at a favourable rate.
  • Portability. Fully legal and tax compliant policy in France. A beneficiary clause will be recommended to be added to the policy prior to their move to France in order for the beneficiaries to benefit from the favourable inheritance tax regime.