If you are planning to retire to France, you should review your finances before you move, or soon after you arrive, especially if you want to be confident that they are working to provide the capital growth and income you need to sustain you throughout your retirement. It is quite possible that the investments you hold now in the UK will not be effective for a French resident. You may need to reorganise your investment portfolio to ensure that it is working to its optimum in accordance with your changed circumstances.

You will need to safeguard your money against inflation and taxation and, because the rules are different in France, it is best to consult a professional financial adviser with knowledge of investment and taxation in both the UK and France.

Most retirees look for wealth preservation and regular returns in their investment strategy. This will provide income to supplement your pension if needed and enough sustained capital for unexpected expenses and major bills as well as a nice amount to pass on to your family. Astute investing is one way to ensure that your money doesn’t expire before you do.You would leave some money in the bank but the rest can be invested to provide capital growth and/or income and to beat inflation and unnecessary taxation.

There is a selection of tax efficient investments available which are suitable for retirees in France and your portfolio can easily be structured for your personal needs and to keep the risk to a comfortable level.

The first step is to set out your aims and objectives so that your financial adviser can recommend a bespoke strategy for you. For example, a life assurance bond known in France as an assurance vie is taxed extremely favourably in France and you’ll be surprised at how much tax you can save.

Holding your investments in the framework of an authorised and approved assurance vie vehicle can reduce your tax rate on investment income and gains to between 0-18 per cent, as opposed to rates of income tax which can be as high as 40 per cent or 51 per cent including social charges. If you allow the monies to roll up and do not make any withdrawals, you will not need to pay any French income tax or capital gains tax. Where a withdrawal, either as regular capital or income, is made (other than payment on death) the French tax position is highly advantageous as only the growth element of the withdrawal is liable to tax.

Offshore trusts are often suitable for French residents and when properly used can save considerable amounts of tax. An offshore discretionary trust can also mitigate French succession tax and UK inheritance tax. However, France does not have an established trust law but it will recognise trusts in certain circumstances. The rules are complicated and you should take specific advice.

Your portfolio When deciding on which assets to include in your investment portfolio, it is important to have suitable diversification to spread the level of risk while aiming to achieve steady returns and capital growth. Your portfolio should therefore include a mix of investment assets, each covering different global sectors, industrial and commercial sectors and also from across different management styles.

While selecting your investment assets, include some which have a low correlation with each other. If the performance of asset classes tends to move in the same direction at the same time there is a risk that they can all perform poorly at the same time. A well - diversified portfolio containing a mixture of assets helps to ensure that when one asset class is not performing well others will be strong, producing good returns and healthy growth.

The classes of assets you could consider including in your portfolio are:

¦ Equities – Over the longer term, equities can provide the best capital growth and have the potential for higher returns. Shares have a tendency to go up and down but volatility can be reduced by holding a well-diversified selection of equity funds along with other investment assets in your portfolio.

¦ Bond funds – These are more secure investments than equities and work well in a portfolio alongside equities. Bonds provide an income which is attractive to retired people and the interest earned is usually nicely above that earned from a bank deposit or building society account. The best way to hold bonds is through bond funds which also provide capital growth over the longer term.

¦ Property funds – Property has a low correlation with equities and bonds, making it an ideal third component in your portfolio. A popular property fund available is called a Real Estate Investment Trust (REIT). A REIT includes quality commercial and residential real estate from across the world which provides income in the form of dividends and capital growth over the longer term. A REIT protects you from the diminishing effects on inflation and they are tax efficient. Many investors appreciate the other advantages that property funds have over owning property directly. There is no large capital outlay required, no management and maintenance costs, no property taxes and they are easily bought and sold.

¦ Capital guaranteed investments – A 100 per cent capital guaranteed investment means that you cannot lose any of your initial outlay provided you do not make any withdrawals and your investment is held for the required period of usually between five and six years. Many guaranteed investment bonds invest in equities and so they give you the opportunity to invest in the stock markets without risking your capital. This way you can benefit from stock market rises without worrying about any dips.

The income you earn should be more than the bank interest rate and they are tax efficient if placed within an assurance vie. Capital guaranteed investments can be used to safely lock away cash lump sums, to protect profits or as a diversification tool to lower your portfolio’s overall risk level. Once your financial adviser has spent time with you making sure that he understands your requirements and risk tolerance, he will advise you as to how much of each investment asset to include in your portfolio. Your adviser will establish a mix that will work well for you to provide good returns and capital growth with a risk level that suits you. Retirement should be the time when you take it easy and enjoy yourself after all the years of hard work. You shouldn’t have to worry about having enough money to live on comfortably so the earlier you get your financial planning in order, the better. Then you can sit back and enjoy your life in France.