Asset relocation, whether to France or Switzerland, is a delicate operation that requires a clear understanding of the tax consequences, legal impacts and asset strategies to be put in place. Whether you’re a French expatriate wishing to return or a Swiss resident transferring assets to France, a rigorous analysis of the consequences is necessary to ensure a smooth transition, free of unforeseen events. Anticipating the tax implications of residency, capital gains taxation and property management is essential to avoid unexpected tax adjustments.
The tax and inheritance implications of returning to France
A return to France after a period of expatriation, whether voluntary or taxed, has significant tax implications, especially in terms of unrealized capital gains, income taxation and inheritance tax.
First of all, if you return to France permanently, you may need to declare any capital gains accumulated during the expatriation period. This exit tax (or tax on unrealized capital gains) may apply if assets have been transferred abroad prior to relocation, particularly real estate or shares in companies. Although France offers tax deferral arrangements in certain cases, a prior strategy is essential to avoid immediate taxation on these capital gains.
Secondly, the return to France may lead to a reassessment of inheritance regimes: French inheritance reserve rules and inheritance taxes then apply, often more restrictive than in Switzerland. It is therefore important to take into account the tax implications of the transfer and management of assets, so as to plan ahead for any gifts or distributions between heirs, particularly if the latter are still living abroad.
Moving to Switzerland: optimizing wealth structuring
Moving to Switzerland, particularly as a tax resident, requires a complete overhaul of your asset structure. Switzerland offers a relatively attractive tax regime, with a taxation system that varies from canton to canton, requiring a local analysis of the impact.
When it comes to property management, capital gains realized on the sale of real estate may be exempt in some cantons, while in others capital gains are taxed according to the length of time the property has been held. It may be advisable to transfer real estate assets to a Swiss asset structure to benefit from more advantageous tax regimes.
Life insurance and pension solutions also need to be adapted: what was fiscally advantageous in France may not be so in Switzerland. In addition, certain forms of indirect asset ownership (e.g. via management companies or holding companies) can reduce tax exposure and optimize cross-border financial flows.
Optimize asset mobility with adapted structures
When assets are spread across several countries, it becomes crucial to set up appropriate holding structures. An asset holding company or société civile can centralize asset management, reduce the tax risks associated with income reclassification, and facilitate intergenerational transfers.
Wealth diversification solutions, such as alternative investments or investments in Swiss or European funds, are also interesting levers for managing tax volatility while ensuring a smooth transfer of wealth.
The integration of family governance mechanisms, notably within a family office, helps to regulate family relationships around wealth management and reduce the risk of intergenerational conflicts. This guarantees long-term stability and optimizes the tax impact at every stage of the wealth transfer.
Example of a successful relocation between France and Switzerland
Let’s take the example of a French entrepreneur, who has been living in Switzerland for the past ten years, and is planning to transfer part of his real estate and financial assets to France in preparation for his return. He owns a property in Geneva, a patrimonial company in Luxembourg, and a portfolio of financial assets.
Before returning to France, a detailed analysis is carried out to define :
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Setting up a Swiss holding company to transfer assets to France without any immediate tax impact on capital gains.
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Optimizing life insurance and investments to avoid excessive taxation on future income.
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Revising the transfer plan to take advantage of bilateral tax treaties, in particular to reduce inheritance tax.
By anticipating these steps, the entrepreneur optimizes the structure of his assets, while reducing his tax exposure and facilitating the transition to his French residence.
Our support in asset relocation
BERGEOT PAOLI Associés assists clients in transferring their tax residence and restructuring their assets between France and Switzerland. Our approach enables us to rigorously plan the essential stages of the relocation process, taking into account the tax, legal and inheritance particularities of both countries.
We implement tailor-made wealth strategies to manage real estate and financial assets, and optimize their transfer, while minimizing the risk of requalification and ensuring a smooth transition.
To find out how we can support you in this process, visit our wealth structuring and planning page.