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Tom

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  1. Greyman, idun, Another & Cooperlola, Thank you ever so much for those additional comments. Brilliant stuff. You have really put my mind at rest over this whole thing. As much as is possible at this stage in the proceedings anyway. I have completely taken your advice on board & now have a clear strategy to sort this one out. Not the insurmountable problem I imagined it to be. Rest assured I will be careful in what I do however & will cover the U.K. side of things first as you have suggested. I am hugely indebted to you all. What more can I say? I just hope that in the future I too can help someone out as much as you all have helped me.  Sincere thanks to everyone! Best wishes, Tom                
  2. [quote user="Will"] Tom Your fiscal residence status in France comes out of legislation, not choice. The UK-France double taxation agreement (here) is the official document; you will probably find this summary rather easier to follow. You will see that if you have a wife and/or children in France, the French authorities regard your French home as your principal residence so expect you to make a tax declaration each year. It doesn't matter if they don't actually ask you to do so or send you forms - the onus is on you to make your first declaration, and after that you are in the system. Neither does it matter that you pay all your taxes in UK, the double taxation agreement sees to it that you are basically only taxed once on any particular sum so in most cases there will not be any tax payable in France. You have to do this in your situation because France taxes you as a couple - you have no choice in this either - even though UK treats you as individuals. There are many advantages to making a tax declaration in France, it's a great pity that this was not explained to you before. The confusion between social security contributuions - like NI in UK - and 'social charges' in France, the latter being a form of extra income tax, is understandable. It's true that social security and other payments can take a large chunk out of a self-employed person's income, and if you are employed your employer has to find something like 40% of your salary in 'employer contributions'. So being employed by a UK company while you live in France is not something to be entered into lightly. That's why an E form, or the current equivalent, is looking like the best (maybe the only?) option. If you have paid full NI contributions up to now then you should be able to get an S1 whether you remain fully employed or no - but this type of S1 lasts 2-3 years maximum. The 'workers' S1 will give you up to 5 years, by which time you should have gained full French residence. I hope it goes well.   [/quote]   Will. That together with your earlier respones provides brilliant advice. Thak you very much! I am cringing somewhat over the tax declaration issue but I do have my wife's letter on file & that I hope will help to mitigate our lack of action on this. I too wish I had obtained advice from someone like your goodself at an earlier time. This would have made things easier for us both I think. At least we can show that despite not having submitted the required French tax returns we wouldn't have, im any case, been liable to pay any tax...................might possibly help our cause  a bit perhaps perhaps. I am going to contact the Aglo-French Chamber of commerce & ask them for advice on who I should seek guidance on this all from. Thanks Will. Sincerely, Tom            
  3. [quote user="AnOther"]Tom, as I understand it you are currently employed and paid a salary exactly the same as each and every other employee of your company, the only difference being that they do not expect you to turn up and do any work and that being so I can see no reason whatsoever why you cannot move to France at any time you like and at zero cost to your employer either in monetary or administrative terms, under the circumstances it will make no difference to them where you live. As has been said I think you will almost certainly qualify for a workers E106 under which you will continue to pay tax and NI on your salary and receive health care in France so you need not bother yourself with with calculations on where you would be better off tax wise, not that you really have a choice in the matter. If you become French resident then although you will be obliged to submit a tax return each year itemising your worldwide income as far as your UK salary is concerned you will receive 100% exoneration for tax paid on it thus your annual devis for that will be for €0,00. You may however have to pay some tax on any other income such as interest and dividends etc., if you have any that is. Although it's possible that your wife could qualify for healthcare based on the length of time she has lived in France I would suggest that you fully explore the E106 route first as it will certainly be more advantageous for you. How far away from UK state pension ages are you I wonder ? I agree with Coops that any professional advice you seek should be from someone well versed and experienced in the subject. [/quote]   Cooperlola & Another, thank you for the above two responses. I have to say that what you are saying really does, potentially, completely change things around for me. If I can achieve what you are suggesting then this would undoubtedly solve all of my problems. I intend to now talk with a financial expert on all this and also to investigate my eligiblity for a worker's E 106 or S1 certificate. Thank you so much for guiding me on these crucially important aspects. I have to be honest in saying I am very, very surprised that it is possible for someone in my position to live in France but to continue paying tax etc. on my U.K. income via my U.K. employer. Very pleasantly surprised if this is definitely the case! Maybe I was naive in my thinking that if you lived permanently in France that you had to pay income tax in France. I think I now stand corrected in this. Also, I take your point on the fact that in my familiy's current & previous situation we should still be submitting income tax returns in France & that it is our responsibility to do this. I honestly did not realise this. Thanks again everyone. I am greatly appreciative of all your combined guidance on this! Sincerely, Tom                       
  4. Hello everyone. Sincere apologies for the delay in getting back to you all but my computer broke down yesterday lunchtime & I haven’t been able to access the forum since. I am writing this on a friend’s laptop. Firstly thank you for your kind words & for your support. Much appreciated I assure you. I'm quite overwhelmed by the effort people have gone to on my behalf. There I was thinking that I was being a bit cheeky in asking so many questions....... Sincere thanks to everyone for taking so much trouble to try to assist me with this rather difficult & complicated problem. The thoughts & suggestions provided in these replies are very, very useful to me indeed. I think I now have a lot to think about! Thanks also Gardian for running a check on my income tax calculation..................I wasn't taking leave of my senses afterall! Very useful. Again much appreciated. I think I'm already a fan of the living France forum! To answer one of the points raised by people: Yes when my wife became resident in France she contacted the French tax authorities & made them fully aware of our exact circumstances. She sent them a recorded delivery letter setting all relevant details including my U.K. employer, my U.K. salary & my name/address details in the U.K. She made it clear that her husband would remain resident in the U.K. & that he would continue to pay U.K. income tax & n.i. contributions.  She stated her belief that in view of the fact she was wholly dependent upon my U.K. salary to live in France and was not going to perform any work activities in France, she should not be deemed liable to pay any French income tax or contributions sociale. She also made it clear that she was going to be provided with an E109 form from her husband supplied by U.K. authorities to enable her to access the French health system. She later on filled out & returned a tax return on this basis. Since that time neither of us have been contacted by the French tax authorities in relation to the question of income tax or contributions sociale. I think it was simply considered that as I myself remained resident in the U.K. and paid full tax & n.i. contributions in the U.K. that no further French tax returns were deemed necessary in relation to my wife by the French authorities. The only contact she has from them is in relation to the annual demands for tax fonciere & habitation. I suppose, however, that on this basis my wife does qualify as having been fiscally resident in France since the time she started living over here. Despite the fact she has not paid any French income tax or contributions sociale. Bearing this in mind I suppose there is indeed an argument that she (after 7 years) should now qualify for the French Health system having been resident in France for a period greater than 5 years. I think it would make sense to now put this suggestion to the French health authorities & see what they say in response.   Healthcare aside, the overwhelming issue for me is whether or not, if I take up French residency, I will be faced with a tax bill which will be substantially higher than that I am currently paying to U.K. authorities on my U.K. income. If it is mandatory for me to move over completely to the French tax system I can realistically afford to pay a low income tax figure combined with a higher "contributions sociale" figure of up to 12.1% There is no way on earth, however, that I could afford to pay a "contributions sociale" figure of up to, god forbid, 43%! As a self-employed person in France is asked to do. My concern in this is that it is extremely unlikely that my U.K. employer would be prepared to pay any sort of "contributions sociale" figure that was higher than the existing n.i. contribution that they provide on my salary. Since agreeing to place me on their long term disability scheme & allowing me to live in France, if I choose to do so, they have become increasingly difficult in their dealings with all members of the Long term disability scheme. A sign of the times I think. Whilst there is no doubt over their agreement for me in principle to live in France. I have this in writing from them. They have since made it clear to me that any additional financial costs that I may incur in doing so (e.g. taxation) will be at my sole responsibility. Fair enough I suppose under the circumstances. So this is my dilemma. Is there any way that I can take up full time residency in France whilst continuing to pay U.K. income tax and n.i. via my employer in the U.K. on my U.K. salary? I have to say I think this is extremely unlikely if not possibly against all of the rules in place. Maybe I am missing something on this but I am racking my brains to try to work out what I may have missed. Greyman, I hope you don’t mind me asking but how in simple terms do the French tax authorities handle your situation bearing in mind you are employed by a U.K. employer but spend very little time back in the U.K.? Is there a "middle-road" solution that would make use of the double taxation agreement between the two counties which might ease my burden? As people have suggested I think it is now time for me to seek professional advice on what I think is a quite complicated set of circumstances. I also take your point cooperlola concerning the importance of the healthcare consideration in all this. Thanks so much to everyone who has tried to help me with this. Thanks to your invaluable input I now recognise the main points / areas of concern that I need to address. A huge thank you to all concerned! If you can stand anymore of all this I will let you know how I get on! Very best to you all! Tom
  5. Hello everyone. This is my first post on this forum & I really hope someone can guide me on some questions I have relating to the French tax system.   My Background My circumstances are that my wife & our young daughther are resident in France & have been living over here for about 7 years. I myself have remained resident in the United Kingdom for work & health reasons & I have been receiving a U.K. income and have been paying U.K. income tax & national insurance in the normal manner. Due to ill health (I have multiple sclerosis) I am now unable to continue working.  I am fortunate in that despite not being able to work I will still receive a reduced salary from my U.K. employer as I was covered under an in-house Long term Disability scheme. It's rather like a long-term phi insurance but is funded direct by my U.K. employer. I continue to be employed by my company but I receive a reduced salary of 2/3rds of my old annual salary. My job title is now "member of the long-term disability scheme" and I am based at home whilst performing no work activities. I continue to pay U.K. income tax and N.I. contributions in the normal manner. My company provides an in-house pension scheme which I will continue to make contributions to. The idea is that I will remain in this situation until I reach normal retirement age (still quite a long way off) and that I will then be granted retirement in the normal manner. So to all intents & purposes I remain a normal U.K. employee & I continue to pay U.K. tax etc. in the normal manner. Incidentally my wife & daughter are covered under the French health system courtesy of an E-109 form that the U.K. authorities provide on an annual basis as evidence of the fact that they are both entitled to health cover in France as my dependants. Anyway, what is now changing is that I am planning, from next year, to move to France permanently to live with my wife & daughther. My wife will become my carer as my illness is now progressing. I plan to become resident in France this will mean that I will have to leave the U.K. tax system & commence to pay Income Tax etc. in France. I am beginning to research the financial implications of joining the French tax system & I am attempting to work out whether I will be better or worse off financially if I go ahead with this.   To help me in this I would hugely appreciate it if someone could provide answers/confirmation to the following points:   1)    Calculation of French Income Tax Overall salary € 35,000 (notional salary - net of allowances etc.) Our household constitutes 2.5 "parts" (i.e. my wife, myself @1 part each + my daughther @ 0.5 part) So "parts" are in euros 14,000, 14,000 & 7,000 respectively.                                            Income tax charged as follows:                                                     Tax band                       Tax percentage                                       Tax payable                                                 Up to  € 5,875               0% payable on each part                        nil                                                 So parts charged:                                                 € 5,875                           @ 0%                   =             € 0.00                                                 € 5,875                           @ 0%                   =             € 0.00                                                 € 5,875                           @ 0% x 50%        =             € 0.00                                                                                                 € 5,875 - € 11,720        5.5% payable on each part                                                 So parts charged:                                                 € 5,845                           @ 5.5%                 =           € 321.48                                                 € 5,845                           @ 5.5%                 =           € 321.48                                                 € 5,845                           @ 5.5% x 50%      =           € 160.74                                                  € 11,720 - € 26,030        14% payable on each part                                                 € 2,280                           @ 14%                  =           € 319.20                                                 € 2,280                           @ 14%                  =           € 319.20                                                 € 2,280                           @ 14% x 50%       =           € 159.60                                        Therefore overall income tax payable (i.e. 3 parts combined) is  € 1,601                                                                                               i.e. 4.57% of taxable (net) income    Could someome please just confirm that my method of calculation is correct & that I'm not going mad?(!) From what I have read I do appreciate that income tax in France is very low compared to the U.K. and that the bigger "tax" item in France is the category of "contributions sociale" which makes up the difference. Also I do appreciate that my tax bands as above mght be slightly out of date. It's just the method of calculation that is confusing me.   2)  "Contributions Sociale" Is there anyone out there in a similar position to myself? i.e. receiving a U.K. salary from a U.K. employer but resident full time in France?  As I understand it upon entering the French tax system I will be liable to pay "contributions sociale" which I believe now total 12.1 % Am I right in saying that this "tax" would be payable on my full taxable salary and that I would have to pay the full 12.1% amount without any exemption whatsoever? Would this be in anyway exempted under the double taxation treaty with the U.K.? (bearing in mind my circumstances) Also: I have heard that self-employed people in France have to pay a huge percentage for "Contributions Sociale" of up to 43% !!!!!!!! I presume this would not be so high in my case because I am not self-employed? But I am confused slightly on this point as I would be receving a U.K. salary & not a French one. Presumably French employers would also be contributing towards these payments? Can anyone advise/clarify on this point?   Finally, just one other thing: Health Cover in France I presume I would have to obtain an E106 form from DWP Newcastle to cover myself & my dependants for Health Care in France. My E109 form would no longer be valid in this respect. I believe the E106 form would only be provided on a temporary basis for up to 2 years. Would the E106 (S1)Form definitely also cover my wife & daughter for health cover in France (up to the level of top-up insurance etc.)? After the E106 (S1) form is no longer available to me I presume I would have to take out full private Health Insurance to cover us all up to the time we would all be accepted into the French State Health care system.  I think I am correct in saying that once you have been resident in France (& paying tax etc.) for 5 years then you & you dependants qualify to enter the French Health system. Could someone please advise/clarify on this point please?   Sorry if this asking too much but just after some basic feedback on these points. I think, dependent upon people's feedback, if things are complicated the next stage might be for me to seek some expert financial advice. Thanks ever so much in advance. Tom                            
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