Before You Move to France
The window closes on the day you become a French tax resident
Almost every question an American family asks us has a better answer before the move than after it.
A Roth conversion, the sale of a U.S. home, the unwinding of a revocable trust, the timing of an RSU tranche, the choice of which accounts to hold on arrival: each of these has a version that works and a version that costs money, and the difference is usually a matter of weeks on either side of the date French residency begins.
After that date, the options narrow to compliance and damage control. We do that work too. It is more expensive and the outcomes are worse.
The date itself is the first thing to establish
French tax residency is not a matter of counting to 183. Article 4 B of the French Tax Code treats you as resident if France is your home or principal place of physical presence, if you carry on your professional activity here, or if France is the center of your economic interests. Any one of those is enough. Where both countries claim you, the tie-breaker rules at Article 4 of the France–U.S. income tax treaty of 31 August 1994 decide the question.
This matters because residency can begin part-way through a calendar year, and because the precise date determines which side of the line each transaction falls on. Fixing that date, and being able to evidence it, is the foundation for everything else.
For families where the answer is genuinely uncertain, or where a great deal turns on it, France allows a binding ruling to be requested from the tax authorities. We prepare those.
Your retirement accounts
This is the area where American families are most often given the wrong answer, usually a reassuring one.
Distributions from U.S. retirement plans paid to a French resident are taxable only in the United States under Article 18(1) of the treaty. That applies to periodic payments and lump sums, and the French tax authorities have confirmed that it extends to Roth IRA and Roth 401(k) arrangements. France exempts the income but takes it into account in setting the effective rate on your other taxable income, and it remains reportable.
That is a good outcome. The planning question sits elsewhere.
A Roth conversion is not a payment to you. It is a trustee-to-trustee transfer. Neither the treaty nor the published French materials say whether a conversion is a sum "paid" within the meaning of Article 18, which means the French treatment of a conversion carried out after residency begins is an open question, not a settled one. Where a conversion is contemplated, the clean answer is to complete it before French residency starts.
Required minimum distributions, the sequencing of withdrawals across taxable and tax-deferred accounts, and the interaction with French reporting all need to be mapped before arrival rather than discovered in the first filing season.
Your trust
France does not recognize trusts as a matter of civil law and treats them, for tax purposes, with considerable suspicion.
A U.S. trust with a French-resident settlor, beneficiary or trustee triggers reporting obligations under Article 1649 AB of the French Tax Code: an event declaration and an annual declaration of the trust's assets, filed on Forms 2181-TRUST 1 and 2181-TRUST 2. The penalties for non-compliance are substantial, and the obligation attaches to the trustee, who is frequently a U.S. institution with no awareness that it has become subject to French filing requirements.
Beyond reporting, the French characterization of the trust governs how distributions are taxed and how the assets are treated for French inheritance tax under Article 792-0 bis. A revocable living trust that functions perfectly well as a probate-avoidance vehicle in the United States can produce results in France that no one intended.
Trusts are the single most common reason an American family's French position needs restructuring, and the restructuring is far easier before a French connection exists than after.
Your RSUs and equity compensation
The United States taxes restricted stock units at vesting. France, under the qualified regime, taxes the same gain at sale. When those events fall in different calendar years, the foreign tax credit becomes difficult to claim and double taxation can go unrelieved.
Unvested tranches, the sale calendar, and the €300,000 annual threshold all need to be modeled before the move, because the vesting schedule will not adjust itself to your arrival date.
We cover the mechanics in detail in How RSUs are taxed in France for American employees.
Your U.S. home
Selling a principal residence in the United States after becoming a French resident is one of the more expensive mistakes available.
The gain is taxable in both countries. For real estate, France grants a credit equal to the U.S. tax actually paid on the same gain, not a credit equal to the French tax. Where the section 121 exclusion has removed most or all of the U.S. tax, there is correspondingly little to credit, and French tax at 19% plus social contributions at 17.2%, plus a surtax of 2% to 6% where the taxable gain exceeds €50,000, lands largely uncredited.
If the house is going to be sold, the analysis of when to sell belongs in the pre-move conversation.
Your taxable brokerage account
For U.S. citizens, the news here is better than most people expect. Dividends, interest and capital gains on financial assets are taxable in both countries, and France grants a credit equal to the French tax under Article 24(1)(b) of the treaty, which neutralizes the residual French tax. The income remains reportable and enters the effective rate calculation.
Three qualifications matter.
The credit is conditional on demonstrating that you have met your U.S. federal income tax obligations, so U.S. filing discipline is part of the French position.
The exceptional contribution on high income follows the treaty. The contribution falls within the scope of the France–U.S. treaty, so the credit equal to French tax extends to the portion of the contribution attributable to the credited income. A large realization in a credited category should bear no net contribution. The contribution becomes a real cash cost where the income driving it carries no credit: French employment income, equity compensation acquisition gains, digital assets. Credited income also stays in the reference income, so it can push other income across the thresholds and into the higher bracket.
Digital assets sit outside the pattern entirely. Gains fall under Article 150 VH bis of the French Tax Code, and Article 13(6) of the treaty gives France exclusive taxing rights as the State of residence. There is no French credit. The French tax is a genuine cost, and relief for the U.S. tax due under the saving clause is a U.S. foreign tax credit question.
What not to buy once you arrive
French banks and insurers will offer you assurance-vie and French mutual funds within weeks of your arrival. For a U.S. person these are, in most cases, unsuitable: the underlying SICAV and FCP vehicles are passive foreign investment companies under U.S. rules and are taxed punitively.
The advice is easier to give before the products have been purchased.
If you hold a green card but are not a U.S. citizen
The treaty architecture is different, and materially worse.
The credit equal to French tax on dividends, interest and financial capital gains is a benefit granted to U.S. citizens under Article 24(1)(b). A French resident who holds a green card but not U.S. citizenship does not receive it. Their credit is limited to the U.S. tax actually paid, capped at the treaty rate, and where little or no U.S. tax arises the credit may be small or nil. Residual French tax typically remains.
Families where one spouse is a citizen and the other is not require two separate analyses. This is routinely missed.
Your U.S. business
A U.S. LLC or S corporation does not carry its U.S. tax characterization across the Atlantic. France applies its own analysis, and the result is often different. Managing the entity from France can also create a French taxable presence for the company itself, independently of your personal position.
Where a business is involved, the corporate analysis has to run alongside the personal one, before the move.
Estate planning
French forced heirship, the 1978 France–U.S. estate and gift tax treaty, and the treatment of U.S. wills and trusts under French succession rules produce outcomes that rarely match what an American estate plan was designed to achieve.
Real estate acquired in France, in particular, should be structured with the succession consequences in view from the outset. Direct ownership, an SCI, and a démembrement between usufruct and bare ownership produce very different results for the next generation, and the choice is difficult to reverse after the purchase.
Reporting obligations begin immediately
From your first French filing, every foreign account must be reported on Form 3916-3916 bis, with a fine of €1,500 per undeclared account per year. Foreign-source income is reported on Form 2047, which is also the mandatory support for claiming treaty credits: without it, the credits that neutralize your French tax are not properly claimed. Trust filings run on their own calendar.
Most of the regularization work we do begins with a family that filed French returns for several years in good faith, without these forms.
Start with your diagnostic call
Thirty minutes, €300, structured around your situation.
We map the French tax issues that actually matter for your family, in the order they need to be handled, and tell you which decisions have deadlines attached. If a written engagement makes sense, a proposal follows with a fixed fee agreed in advance. If it does not, we say so.
The conversation is most useful twelve to eighteen months before the move. It is still worth having six weeks before, and it is worth having after you have arrived, though by then we are working with fewer options.
General information on French tax law as at the date of publication. It does not analyze U.S. federal, state or local tax consequences, which should be confirmed with U.S. counsel, and does not constitute advice on any particular situation.