Several lawyers, tax advisers and wealth managers said they have been flooded with questions ahead of a two-round snap election called by President Emmanuel Macron – including questions about temporary transfers to Italy, Switzerland and Spain.
Polls have shown Marine Le Pen’s far-right Rassemblement National and an ostensibly left-wing coalition called the Nouveau Front Populaire (NFP) running first and second in the polls, both breaking with Macron’s business-friendly principles and tax cuts. Are promising.
“I’m not sure I’ve had so many calls since the beginning of my career,” said Grégory Soudjoukdjian, co-founder of Retorres Finance, a wealth advisory corporate in Paris. “Our high-end customers are asking themselves a lot of questions. , , It is difficult to answer them in detail.”
“We are often asked the question whether money is safe in France,” he said.
Soudjoukdjian and alternative advisers said people are examining whether the promise of straightforward monthly insurance coverage can withstand wild market swings if an election results in a hung parliament. France’s most popular financial savings product, monthly insurance coverage, trades in tax benefits over the following 8 years, although cash can be cashed out early or even at death.
Some holders of such investments are concerned that rules in France could potentially allow orders to stop withdrawals in a disaster, advisers said.
If the far-right Legitimate or leftist nouveau riche popular (NFP) bloc were to win the July 7 run-off, they could create a central authority and share power with Macron as president. Both have guaranteed generous spending, and the left would also significantly increase taxes.
Le Pen’s RN is keen to reassure the task, including declaring that it can still influence fiscal discipline and that the EU’s views lack laws, even its fiscal program Details are lacking.
However, this is the NFP’s chance, with a deeper tax and spending schedule than the far-left L.A. Is greatly influenced by. France Insoumise (sometimes called France Unbegotten or LFI), is the primary fear of France’s rich.
“From an economic and tax point of view, people are most worried about the leftist coalition because their tax program is very aggressive,” said Vincent Lazimi, husband of law firm Janet in Paris. “People are concerned about the property tax, the end of the flat tax and potentially higher taxation on wages, as well as an overall environment that is not pro-business.”
One of Macron’s first reforms was to implement a wealth tax so that it covers only property assets and excludes investments – the RN has suggested he impose a tax on “financial fortunes” for the population with assets above €1.3 million. Wants to impose tax. ,
The President also set a flat tax rate of 30 percent on capital gains, dividends and interests – a long-standing demand of investors and marketers.
Lazimi noted that buyers were inquiring whether they should distribute dividends now to avoid a potential increase in the flat tax. Alternatively, new tax laws could be applied retroactively, which could invalidate this type of preparation, he said.
France was already the highest taxed among 38 OECD countries in 2022, with a tax ratio of 46.1 per cent of GDP, when compared to the OECD average of 34 per cent.
To pay for the tens of billions of euros of inter-population spending, the NFP will explore expanding the wealth tax and inheritance tax. It could additionally increase the scope of travel taxes on wealthy populations who move their tax residence or businesses out of France, and increase the managed marginal source of revenue tax fees by up to 90 percent. If energy is included in the NFP, some tax breaks and credits for firms could be eliminated.
“The main concern is wealth taxes,” said a Paris-based lawyer who works with some of France’s richest families.
Since it was first created in 1982 under socialist President François Mitterrand, the levy – known as Show solidarity on Fortune -Abolished, restored and reformed through successive governments.
“Clients are very afraid that the leftist coalition will impose a one-time wealth tax,” the lawyer said, “a politically interesting formality that could be met unexpectedly.”
Socialist François Hollande began his presidency in 2012 by imposing a 75 percent marginal tax charge on earnings over €1 million as part of a campaign against “faceless finance”. He then had to scuttle it when it was struck down again in France’s constitutional court – a precedent that some advisers said still introduced safeguards.
Nevertheless, Hollande’s progress alternatively led to capital flight and a small exodus of bankers to London.
“None of this will inspire people to reconsider France as a welcoming land for business,” said Xenia Legendre, a tax specialist at Hogan Lovells in Paris.
Advisers said some wealthy people are actually planning to relocate from France to more economically advantageous jurisdictions, including Italy, the ancient tax haven of Switzerland and Spain.
“Following the announcement of the mandatory election, we had some French clients inquiring about the Italian tax regime,” said Claudio Gristanti, head of Italian tax at regulation firm Osborne Clarke.
Wealthy foreigners in Italy must pay a one-time fee of €100,000 per moment to be exempt from Italian tax on international sources of revenue. This is a prevalent choice among those leaving the United Kingdom in view of the imminent abolition of the “non-dom” regime.
However, to qualify as an Italian tax resident for 2024, an individual must be physically available on the Italian period for a higher part of the financial moment – more than 183 days. So someone who is waiting until the French election results to move to Italy will have to wait until 2025 to become an Italian tax resident.
The Paris-based lawyer said many of his clients are currently hedging their bets by doing the groundwork to become Italian tax residents. “I have some clients who have booked hotel rooms in Italy and plan to stay there until the end of July and then they can decide what to do,” he said.
Others were prepared to suggest that it was unlikely that the leftist coalition would be able to gain sufficient sway in parliament to push through its tax increases and that the RN had less chance of coming to power than the RN.
Some warn that any untouched executive may become overly cautious on fiscal action in a stressed population budget situation, and that population may simply get stuck.
“Transfers are a complex topic,” said Sandrine Genet, co-founder and head of wealth adder Carat Capital in Paris. He said that while Pace Italy has certainly become “the new form of El Dorado”, a hasty departure could be problematic. “It’s not just about where you go, but when you go, you actually have to go – you take your kids, you have to sell assets.”
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