Are you an American considering the move to France, but looking for a way to avoid the steep French inheritance tax? An effective solution is Monaco, and its very favorable tax system. Monaco is the quintessence of the French Riviera’s glamor and wealth, and with the price of life on par with most large U.S. cities, Monaco can be a great way for Americans to move to “France” without any additional tax burden.
The sunny side of taxes for US expats
Monaco offers the perfect solution for Americans wishing to avoid inheritance tax, as well as many other tax benefits.
- Investment income: Monaco does not tax any kind of personal investment income, providing local, tax-free growth.
- Inheritance and estate tax: There is no inheritance or estate tax in Monaco levied on spouses or direct children, and very low rates for other individuals or family members. This stands in stark contrast to France, which imposes notably high inheritance taxes on French residents.
Americans are required to file taxes with the IRS no matter their country of residency, but there will not be any additional income taxes in Monaco. Nonetheless, it’s still necessary to work with a cross-border advisor to make sure your investments are properly managed and avoid costly mistakes.
Monaco inheritance tax rates:
- Spouse and direct beneficiary: 0 %
- Partners under civil union : 4 %
- Sibling: 8 %
- Uncle, aunt, nephew, niece: 10 %
- Other relative: 13 %
- Unrelated beneficiaries: 16 %
What happens if I have a trust back in the US?
Monaco adopted the Law 214 on February 27, 1936, which recognises and allows Monegasque residents to have a Monegasque or foreign trust to dispose of their assets during their lifetime or upon death. This is good news for Americans who want to use a trust to avoid US probate. In comparison, France does not recognise trusts, and can cause many issues if the deceased was a French resident.
Ok, but, how much is the dream life in Monaco?
Many focus on the glitz and glamor of Monaco, but you may be surprised by the real cost of life in Monaco.
- Housing: Buying property in Monaco is expensive, but inversely, a quick online search will reveal that rental prices are not much different compared to big cities, and often come with extra amenities such as a pool and doorman.
- Healthcare: The healthcare system in Monaco is top-notch with the Princess Grace hospital as well as several private clinics, all for a fraction of the price in the United-States.
- Services, providers, household items: Prices are higher than in neighboring France, but not much different from your average monthly budget of US cities. Additionally, there are some easy cost savings with a quick shopping trip to Italy.
- Car, travel: Monaco is known for its luxury cars, but parking spaces are reasonably priced. For public transport, Monaco has arguably the most beautiful train station in the Cote d’Azur, and the Nice international airport is less than an hour away.
Perks of living in Monaco
- 👮 Stability and security: Monaco is one of the safest and cleanest places in the world with long-standing political stability.
- ☀️ Weather: incredible weather, with often over 300 days of sunshine.
- 🌍 International culture: large mix of nationalities, and many people speak English.
- 🎭 Culturally rich activities and world famous events: Large number of cultural events, such as the Grand Prix🏎️, the Monaco Jazz Festival, as well as attracting the world’s top music, art, and dance talents.
The French Joie de Vivre
Even if Monaco isn’t technically France, the two countries are very similar culturally, even if Monaco has a slight Italian flair. As a Monaco resident, you are free to roam the surrounding region of France which is truly one of the most beautiful places in the world. In addition, nothing is preventing you from renting or buying property in France, especially considering Monaco only requires you to spend 6 months a year to be considered a resident.
🧳Packing list to move to Monaco
- Visa: Everyone must start with a twelve-month, temporary visa with the option to be renewed twice. Afterward, the applicant may upgrade to a three-year, ordinary residence visa, which can be renewed as often as needed.
- Accommodation in Monaco: It is necessary to have a deed or a lease agreement to a property in Monaco when you apply for a visa.
- Financial resources: Monaco requires that you be financially secure, and all residents must place a minimum of $1,000,000 in a Monaco bank.
A wing man for your adventure abroad
Many people dream of retiring in France to enjoy the rich culture and “joie de vivre“, but such a big decision requires careful planning in order to avoid unnecessary errors. If you are considering living abroad, we advocate for peace of mind by collaborating with an experienced, cross-border team to guide you through the financial, fiscal, and immigration process. Harrison Brook has done the legwork to find partners and solutions that are adapted to American expats to ensure a seamless transition overseas. Don’t hesitate to reach out to us and schedule a meeting with one of our cross-border advisers.
