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HMRC Letter re Tax liability on French Holiday Home


Frederick
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It seems the French authorities have been busy ensuring that they link my holiday home  and French bank account ownership with UK tax authorities . Does not apply to me as house is not rented out nor ever has been .But means form filling for both me and my wife as we both got one !!!

Form states they receive information from governments  around  the world about property ownership and bank account details relating to those properties .

 " We have information which indicates that you may own one or more properties overseas  that can impact on your tax liability if let out sold or disposed of . "

Forms to be returned by 31 January 2014 with a warning that a compliance check into tax affairs may result if ignored .

All part of reducing tax evasion and avoidance .

 

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[quote user="Frederick"]It seems the French authorities have been busy ensuring that they link my holiday home  and French bank account ownership with UK tax authorities . 
[/quote]

 

Not necessarily the French authorities.

I dropped by the bar in the main marina in Palma for a coffee one morning, and noticed a man sitting outside who seemed to be studying cars coming and going, and making notes.

He was rather more formally dressed than is usual for tourists, and as I went towards the door, passing within a few feet of his table, he dropped his notebook into the briefcase sitting on a chair and closed the lid, but not before I noticed the familiar crown and portcullis logo embossed on the notebook cover.

Of course, I suppose he was just a customs man on holiday who had a passion for collecting car numbers and names of yachts [:D]

 

 

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On another French Forum a poster has reported receiving a similar letter.

By way of background, HMRC is currently putting a lot of resources into identifying UK residents with second homes in the UK and abroad. Within the EU it is now much easier to discover, with automatic exchange of information between the main EU member countries tax authorities. (If you have a second home you will have been paying local property taxes, so will be known to the competent authority.)

What HMRC want to check is the source of funds used to buy the property originally, in that the cash used was previously declared and taxed if appropriate, whether the property has been rented and if so rental income declared in the UK and if the property has been sold any gains declared in the UK.

According to HMRC there are quite a few UK residents that have used non declared income or gains to buy a second home and then also not declared any rental income or gains on a subsequent sale.

Similar exercise is going on regarding expensive boats and cars!

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[quote user="Cendrillon"]

"Interesting thread. Some people we know do declare the income to the UK but not to France!!"

Very true Hereford and I suspect there are quite a few who don't declare it at all[blink].

[/quote]

Which raises the question  What  about mobile homes ? I know someone who has bought one and I think the site rents it out for him when he is not using it,

I imagine his French bank account would show income from that . As for the site owners , how do they show their income is raised . Do they have to list every owner they act and rent out  for with a contribution for tax when their accountants deal with the sites  tax affairs ?   There may be people who have already paid tax to France when it should have gone to the UK ...

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OH was presented with all the details of our french home back in 1993 just before we decided to move over when he was summoned to an inspection by the IR in the UK along with his accountant.We had never told them anything as we did not rent it out but they had everything down on paper including the priced paid and how many times we had paid Brittany Ferries for tickets too! After that unnerving experience and also being warned here in France that you are watched via your paper trails,we kept our noses very very clean.
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  • 1 month later...
Two more letters today my wife also got the same one ..." Thank you for sending back the slip in response to our letter about overseas and or UK property."

They will now look at the information I have given them  check against information they already hold and when they have done this will write again and tell me

what will happen next .

There is a telephone number so I phoned it and and asked if it is not a breach of the official secrets act if they can  tell  me if they know how many ferry tickets  I  buy  ..... Answer   "We have no idea but  hope it is many and you have a good time in France " ....  I wait the next double post on the matter !

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I have only just come to this thread - and it brings back the memory of such a letter about 20 years ago when I bought my French house.

I received a letter from the Inland Revenue (as it was then) which said something to the effect of "we know that you have just done something which may have implications for us". The letter did not say what but the house purchase had been the only action which could possibly qualify. I wrote back pointing out that the house purchase - if that had been the reason for the letter - was for personal use only. I heard no more.

The only thing which could have triggered the letter would have been the conversion of a large sterling sum into French francs and subsequent transmission to a bank account in France, since I purchased the house with a second mortgage on my UK property. I suspect that the bank concerned was obliged to inform HM Inland Revenue of any action that might involve sums large enough to look like money laundering.

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