Tax Treaties

France's Exit Tax: Do I have to pay to leave?

If you've held significant shares or securities as a French tax resident, leaving the country can trigger a tax on gains you haven't actually sold yet. Here's who it catches, how it's calculated, and what happens if you move to the UK.

  • France's "exit tax" taxes unrealised gains — the tax office treats your qualifying shares and securities as though you sold them the day you left, even if you haven't
  • It only applies if you've been a French tax resident for at least 6 of the last 10 years — AND — either hold securities worth €800,000+ or own 50%+ of a company's profit rights
  • Assurance Vie contracts are explicitly excluded, regardless of value — confirmed by an official Assemblée Nationale parliamentary answer (Question n°8558)
  • Moving to the UK doesn't make the tax disappear, but the UK qualifies for automatic deferral for 2026 — confirmed on France's own official list — so no security or bank guarantee is needed
  • If you don't sell before the deferral period ends (2 or 5 years, depending on the value involved), the tax is simply written off — you never actually pay it

Taxed on a sale that never happened

Most taxes are triggered by something happening — you sell an asset, you receive income, you make a gift. France's exit tax is different: it can be triggered by leaving the country, on gains you haven't realised and might never realise. If you've built up substantial unrealised value in shares or securities while a French tax resident, and then move abroad, France's tax authority treats those holdings as if you'd sold them on your last day of French residency — even though nothing has actually changed hands.

This is a genuinely unusual tax mechanism and it's precisely why so few people know about it, and it only affects a narrow group of people.

Who does it apply to

Three conditions all have to be true at once for the exit tax to apply:

  1. You've been a French tax resident for at least 6 of the last 10 years before you leave — AND —
  2. You hold qualifying securities — shares, bonds, and similar financial rights — either worth €800,000 or more in total, or representing 50% or more of a company's profit-sharing rights, regardless of value — AND —
  3. You transfer your tax residence outside France.

The €800,000 threshold isn't new — it's been in place since the 2013 Finance Law. It nearly changed for 2026: an amendment to raise it back to €1.3 million passed a first-reading vote in the National Assembly (70 to 55, November 2025), which would have pulled a meaningfully smaller group of people into scope. It didn't survive into the final adopted 2026 Finance Law, so €800,000 remains the threshold — see our news update on the amendment's full journey if you want the details. If you don't clear either the value or ownership-percentage threshold, none of this applies to you, however long you've lived in France.

Assurance Vie is Excluded

Assurance Vie and capitalisation contracts are excluded from the exit tax entirely, regardless of how much unrealised gain sits inside them. This was confirmed directly by an official response to a parliamentary question — Question n°8558, Assemblée Nationale — which states that Assurance Vie and capitalisation contracts fall outside Article 167 bis because of their legal nature: a policyholder's rights under an Assurance Vie contract are a claim against the insurer under Article 125-0 A of the tax code, not a direct ownership stake in securities. It's a structural distinction, not a temporary exemption.

Practically, this means someone whose financial wealth is entirely inside Assurance Vie contracts — however large — has no exit tax exposure at all, even though the same underlying investments held directly in a brokerage account might well be caught. If you're weighing where to hold significant wealth before a possible future move, this is a genuine structural advantage of the Assurance Vie wrapper worth factoring in — see our guides on what Assurance Vie is and holding one in sterling for the wider picture.

One important distinction: this exclusion only covers the exit tax itself. It doesn't mean an Assurance Vie is untouched by leaving France — a withdrawal you actually make around the time you leave is still taxed under the normal Assurance Vie withdrawal rules, exit tax or not. In short: leaving France doesn't create a new tax on the contract, but it also doesn't switch off the tax that already applies whenever you withdraw. If you're weighing this specifically because you hold (or are considering) a sterling-denominated policy like a UK/Irish international bond, see our guide on holding an Assurance Vie in sterling for what changes if you move back to the UK before withdrawing.

How the tax is calculated

If you're caught by the thresholds above, the tax office calculates a latent gain — the difference between the market value of your qualifying securities on the day you leave and what you originally paid for them — and taxes that gain as though it had been realised. This applies to shares and securities generally, including holdings inside a PEA opened since 2018 — a PEA doesn't shelter you from the exit tax the way it shelters you from ordinary French income tax while you're resident.

For 2026, the combined rate is 31.4%:

Rate
Income tax 12.8%
Social charges 18.6%
Total 31.4%

The 18.6% social charges figure is worth flagging precisely, because it changed very recently and a lot of secondary sources online still quote the old 17.2% rate. The LFSS 2026 (the 2026 Social Security Financing Law) raised social charges on most capital income — including exit tax gains specifically — from 17.2% to 18.6%, effective 1 January 2026. Assurance Vie was deliberately carved out of that increase and stays at 17.2%, but exit tax gains are explicitly named among the income types that did rise.

You can elect to be taxed under the standard progressive income tax scale instead of the flat rate, in the same way you can for ordinary investment income — but for most people with significant unrealised gains, the flat rate tends to work out lower.

Do I have to pay it?

Not necessarily, and not immediately. Whether and when you pay depends on where you move to, and what you do with the securities afterwards.

If you move to the EU or EEA

If you move outside the EU/EEA generally

The UK specifically

If the deferral period passes without a sale

What actually triggers payment during the deferral period

Several events end the deferral early and make the tax immediately due, calculated on the original latent gain worked out when you left — not recalculated at the later date:

If any of these is realistically on the cards within the deferral window, it's worth getting the specific mechanics checked rather than assuming the write-off will simply apply.

Taxpert's filing assistant helps you work out whether the exit tax applies to your situation, and what needs declaring if you're planning a move. Try Taxpert →

Frequently Asked Questions

Does the exit tax apply to my Assurance Vie?

No. Assurance Vie and capitalisation contracts are explicitly excluded from Article 167 bis CGI, regardless of value, because a policyholder's rights are legally a claim against the insurer rather than direct ownership of securities. This is confirmed by an official Assemblée Nationale response, Question n°8558.

What's the threshold for the exit tax in 2026?

You need to have been a French tax resident for at least 6 of the last 10 years, and either hold qualifying securities worth €800,000 or more, or own 50% or more of a company's profit-sharing rights. The €800,000 threshold has applied since 2013 — an amendment to raise it to €1.3 million was proposed for 2026 but wasn't adopted into the final law.

What rate is the exit tax charged at?

31.4% for 2026 — 12.8% income tax plus 18.6% social charges. The social charges rate rose from 17.2% under the LFSS 2026, which specifically named exit tax gains among the income types affected by the increase (unlike Assurance Vie, which was excluded from the rise).

Does moving to the UK trigger immediate payment of the exit tax?

No. The UK isn't in the EU/EEA, but it qualifies for automatic deferral anyway through its own administrative assistance and tax recovery agreements with France — the UK is named directly on France's official 2026 list of automatic-deferral-eligible countries. No guarantee or French tax representative is needed.

Can the exit tax be avoided entirely?

If you don't sell, gift, or otherwise dispose of the qualifying securities within the deferral period (2 years for holdings under €2,570,000, 5 years at or above that), the deferred tax is automatically written off and you never pay it. Selling within that window ends the deferral and makes the original tax due.

Sources: Article 167 bis, Code général des impôts (exit tax mechanism, thresholds, deferral and relief periods) · impots.gouv.fr — "Je quitte la France, suis-je concerné par l'Exit Tax ?" (official conditions summary) · Question n°8558, Assemblée Nationale (Assurance Vie and capitalisation contracts excluded from exit tax scope) · Formulaire 2074-ETD, notice 2026, impots.gouv.fr (list of countries eligible for automatic payment deferral, including the UK)

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Please note: The information in this article is accurate to the best of our knowledge at the date of publication. Tax rules change — always verify current rates, thresholds and deadlines at impots.gouv.fr or with a qualified tax adviser if your situation is complex.

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