Living in France but working in the UK

[Fiona]

Hi there - hope you can help.  We are planning to move to France later this year.  I am currently contracting in IT and saving like mad so we have a nest egg which will hopefully last about a year assuming no other work.  My partner is a builder and our ideal plan is to find a place with somewhere for him to renovate to turn into a gite, or to buy a second property to renovate and sell on as a developer.  Therefore we are thinking that I may take a contract back in the UK for 3 -6 months maximum and commute to and from France for that period - and then not work again for at least another 6 months so we have the best of both worlds.  We have young children and want to spend more time as a family but are realistic enough to know that bills have to be paid and as I have the ability to earn reasonably good money in what I do it makes sense for me to keep working - but not all year like I have to here.  My question really is where would I be liable to pay tax - if I am a self employed/freelance contractor working through a UK agency for a UK company but am in the UK less than 6 months a year would I pay French tax?  If so would I then be covered for healthcare and would i have to pay is it cottisations(?).  If anyone else works like this I would be most grateful to hear from them.  thanks Fi

[Collywobble]

Hi Fi,

I'm sure that I will be corrected momentarily, but a bit of info to consider is that most (i.e. OECD) countries have a reciprocal tax treaty status to avoid double taxation. The usual rule of thumb is something like:

"did you spend 183 days or more in any one country"  if yes, then you are considered a resident for tax purposes. 

 (As an aside, it gets more complicated if you share your time between lots of places, then someones tax department will often make the decision for you)

So when you say "6 months", tax types will want the answer in days. The good thing is that you can manage the situation to suit. But, keep in mind that someone well known (actor, musician???) got hit for tax a few years back when they visited a sick mother (?) in England and exceeded the 183 day thing. Mind you I think they were worth millions.

This said, my experience has been between UK & USA and doesn't take into accound the EU social security/healthcare benefits/obligations, but I still think the 'days' bit comes into it.

cheers

[Will]

This subject has been done to death on this forum, a search should throw up all the information you need to know. In a few words, France and Britain have different residence qualifications, but have a double taxation agreement. If you work, the place where you actually carry out the work is where you pay tax. If your main home is in France you are French tax resident so you declare your worldwide income in France. Tax already paid in Britain is offset against your French liability. You pay social security in the country where you spend most time. In your situation you will also need to consider capital gains tax on the property developing and to register another business to allow you to carry this out. France is not the best place, financially speaking, to do what you propose.