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chocolatefish

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  1. Hi parsnips

    As french residents all your assets worldwide fall under french inheritance and tax laws.

    Re. the above, does this mean that if we both died tomorrow, our estate would have to pay inheritance tax on our UK assets to the French govt? And not to the UK govt? And which tax regime would be used to calculate the tax due?

    Cheers

  2. Hello

    We've lived in France for 8 years, 2 young children. While we do have some assets in the UK (rental properties, savings / investments) we have pretty much none in France - we rent, we live on one salary so virtually no savings. Other than bank accounts, and my DHs life insurance provided by his employer, we don't have any assets in France.

    We do however have two young children. Do we need to have French wills ? Would this make things easier for them, or for whoever would be dealing with our estate on their behalf ( in the event of both our deaths while the children are still minors?)

    Eventually we probably will become property owners in France, and at that point Yes, I see we'd definitely need French wills. But at this point in time, what would be the benefits?

    Cheers for any advice.
  3. Well, you would think so, and I too in my ignorance assumed that this was the case.

    However, it seems to be down to the semantics... the French tax authorities do not directly levy taxes on UK income that has already been declared in the UK; thanks to the DTT... But they do 'take into account' such income when calculating our global income (with various abattement and tax credits to allow for the fact that it has been declared in the UK already blah blah).

    Our total global wealth (thus boosted by the UK income) is then used to identify which tax brackets our income falls into, and the % tax we pay on the income falling into each category of the bareme. So although we are not directly being taxed on the UK income... it all goes in the pot and pushes more of our global income into a higher tax bracket... savvy? So we end up paying more income tax as a result.

    He also explained the issue with social charges, the ongoing court battles etc, which I understand when I read it but cannot remember the details. Suffice to say, a lot of tax offices seem to be making policy / proceedures up on the hoof.

    But the real things that needed sorted were quite basic - the Fisc erroneously calculating for 2 rather than 3 parts in our household, and some errors in the totals on our part due to poor advice were the main reasons for our higher tax bill.

    Next year we will be wiser. It's an expensive business, living in a socialist country with a vast gaping hole where its social fund should be... it's another instance where I've had to accept that TiF baby, TiF.

    *TiF = This is France
  4. Just coming back to say thanks, to parsnips especially, for the advice.

    We're using a professional French / British accountant to sort it out for us, it was just too complicated for us. So far he's uncovered a number of mistakes we made in our return (thanks to advice from so-called interntational tax / property lawyer) plus a major error on the part of the Fisc (that our household was 2 rather than 3 'parts') and as a result has reduced our tax bill by nearly half. It's still a lot more than we'd like to be paying on income that's already been declared in the UK, but it's been really useful to follow his explanations and calculations, and the mindset of the French tax authorities, and hopefully we'll be able to do it ourselves next year.

    Cheers again
  5. I think this is similar to what many people seem to be reporting... apologies if I am going over a well trodden path, it's new to us.

    We declared UK rental income & dividends for the first time this year, with advice from the very helpful people on this site.

    We've just had our Avis d'Impot and while the impot looks about the same as last year, we have been charged around 1700euros of social charges...

    Am I right to think that we should not have been charged this?

    The Impot lists our UK income as Revenus des locations meublées, non-profess., micro regime and gives us a 50% abattement on the total. It then lists our dividend income as Revenus de capitaux mobilier declarés at imposables, and totals all these up with our French salary etc. We then receive a Credit d'Impot, presumably for the UK income already declared to the UK tax authorities. The tax payable at this point is pretty much the same as previous years.

    The Prélevement Sociaux part of the Avis indicates that all our UK rental income (Revenue de capitaux mobiliers) and dividend income (Revenus professions non salariées) have been subject to social charges. This pretty much doubles our overall tax bill.

    Where now? Down to the tax office with a copy of the European Court judgement and our HMRC tax return to prove that all this income has already been completely and utterly declared for tax in the UK?

    Also, while we are waiting to try and sort this out, do we have to pay up in the meantime and try to claim it back. We are living on one salary, and this is a big hit to our budget.

    Thanks as always for any words of wisdom.

  6. Thanks so much parsnips, that is a great help and it is making sense now. Very grateful.

  7. Thank you mrsblack. We have filed all the other years online so hoping we can do the same with these extra pages. I thought my French was okay, I can get by fine in daily life and reading most things, but the tax forms have me stumped! I have to sit with the dictionary beside me and look up every third word!

  8. Hi parsnips, thank you so much.

    1. I can't see any box asking for the montant brut in section 2b. There is a large box which is split into three sections, dividendes non eligible..., interets..., and jetons de presence. They all ask for montant net. Am I looking at a different form?

    2. Noted.

    3. Furnished, but under 15000. I guess we have to ask at the tax office. My OH who is the French speaker in our partnership, is really reluctant to do that as we should have been declaring these incomes previously, and he doesn't want to draw attention to it.

    Exchange, noted, and will do.

    It's not so much the tax / social charges etc, I do understand that the net result shoudlbe zero. it's more the prospect of fines etc for not declaring this in the past. It's not a lot of income in reality and nowhere near enough to push us into another tAx bracket. But still unsettling.

    Thanks again for your help.

  9. I need to declare the following for the first time (hopefully in future years it'll be easier!) I would be very grateful for some help completing form 2047 and what goes to where on the main form. I have found various clues on other websites, but am not sure that they are correct.

    1. Interest on UK bank accounts. What goes where on form 2047? I have calculated the gross interest from all our banks / savings accounts. Does it go in 2B somewhere?

    2. Dividends received on UK Funds. I have read elsewhere to add the dividend PLUS the tax credit, which I have done, and have my totals. Does this also go on 2B? Which columns?

    3. UK Rental income. Am I right to think that I just take the total gross rental income over the year 2013-2014, and put that figure in Section VII? Where?

    We will be completing the actual forms online, which may or may not be easier!

    What exchange rate to use? Just todays - which is 1£ = 1.35 euros?

    Sorry to be such a dunce, as I say this is my first time completing these forms. I'm tempted to find an accountant to do them - but if you've seen my previous thread, we haven't had great experiences in that respect so far :))

    TIA
  10. Cheers for that.

    Is it just bank accounts? We have a couple of tracker funds set up to receive our UK rental income, that we receive tiny dividends from, all included in our declaration to the UK taxman. Do we need to declare these to the French tax authorities too, as per normal bank accounts?

  11. I'm having difficulty finding a translation for this.

    What French word or phrase would be used to describe the crafty / arty projects that children do at home / playgroup / nursery?

    'Les arts plastiques' seems to be for adults, more fine arts.

    'Artisanal' seems to refer more to craftsmen, like joiners, jewellery makers etc.

    Cheers all

  12. Thanks to all who have responded, it has been really helpful - even if it wasn't what we wanted to hear! We will be completing the tax form this year declaring all our income in the UK, not making a big deal of it and hoping that its just accepted.

    One thing the accountant did emphasise was the great importance of providing details of all bank accounts held overseas, which we did not know about. I think I'll start a new thread on that one!

    Thanks again,
  13. So possibly this is a change that the accountants are not up to speed on?

    DH is baulking at it, and really wants to believe the accountants, as the level of information / paperwork that the French tax forms demand is way in excess of the amount of money involved - we only really make a couple of grand a year, and the interest on the UK accounts is probably 20£!
  14. Thank you both for that link, I have already read that page in great detail, it is one of the ones that alerted me to this issue in the first place.

    I guess my question is: why does the information given in the FAQs here directly contradict the advice given by 2 separate French accountants, both of whom have extensive experience of dealing with expats and their tax situations in France?

    I'm also concerned that when we 'own up' to both the rental income and the nominal interest on accounts we have in the UK, we'll end up being fined for previous years non-declaring, which as I say was done on the advice of an accountant.

    Deary deary me.
  15. Going round in circles here...

    When we first arrived in France, the accountant at my DH's employment advised that we did not need to declare UK rental income on our French tax return, as it was all declared in the UK and taxe under the UK system. Since then, we have stuck with this.

    Recently, while talking to a French friend who works in a bank, we were alerted to the possibility that we should be declaring everything in our French tax return, including all UK rental income. This led me to read further on the matter on this site and elsewhere, and the consensus seems to be that we should indeed be declaring everything including UK rental income that is taxed in the UK, and then receiving a tax / CSG credit to the effect that our French tax payments are unaffected.

    So we went to see a different accountant, recommended by French friends, and he has - again - told us that No, we do not need to declare our UK rental income as it is already declared under the UK tax system.

    Advice please. We don't know who to believe?
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