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UK rental income


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Sorry, not exaclty French finance.

I declared UK rental income on the French tax return. I realise it should also be declared in UK but I have never completed a tax return there, it's all PAYE.

It seems in UK the tax on rent should be paid by the tenants. I don't know how that works, it seems a bother for them. Can anyone explain?
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Blodwyn,  see live link below and there are phone numbers which  I have just called, so I wasn't giving you numbers which do not work, and definitely HMRC.

Certainly not at all PAYE in the UK, we have done self assessment since we moved back. No choice, mainly french income.

+44 3000 516 644

+44 161 931 9070

Still until we left France, I never knew that a sort of PAYE existed in France, so for several  years after we left France, it was deducted from the salary before receiving it, AND was more expensive than normal french income tax!

So we paid that years before our circumstances changed. And in France all changed a couple of years ago, but that is what we ended up paying, retenue a la source it was called, and perhaps still is, for the specifics of people like we were, as I said, it was not 'normal' french income tax, but more costly.

Yes, still exists and is not the same as everyone living in France pays:-
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If the rent paid to a non-resident landlord is more than £100 per week (double that for a couple owning the property) the tenant is supposed to deduct tax from the rent (and pay it to HMRC).   We rather doubt this often happens except when it is a commercial property and the solicitors are more "with it"!  But it is the law.

O. P. The easiest way round it is to contact HMRC and get "clearance" to have the rent gross. You have to prove that you have been "good" and filed returns regularly!
I would speak to HMRC urgently. You will, normally, need to send a UK return.  We have to do this just for rental income. Property income is always liable for tax in the UK, you may not pay any though if your other UK taxable income is small.
The rent does not go on the French form in the property income boxes but on "other income" on the last page. I do not have our file to hand but can tell you the right box if need be. The figure is used to calculate tax rate in France on other income.

I should put the caveat that we have not lived in the Uk for a while now but are not aware of any change.

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Self assessment for 2019/2020 ie 5 April 2019 to April 2020 is not due online  until Jan 2021. Same same for the previous year, the January the following year.

Only online and it all needs sorting out in advance for passwords etc.

Paper declarations I believe have to be in by September following the April, but you'd have to look that up.

I usually do ours early in the year, in case there are any problems and I need to call, less of a wait[Www]

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Thanks for helpful replies. We didn't do tax returns in the UK because it was deducted automatically, and still is as husband had a public sector pension. We declare the rent in France but I realise we have not declared it in the UK. Before my husband died the rent was less than £200 a week so the tenants would not have had to bother with the tax.

I think I need to contact HMRC and will probably owe them tax. Once it's sorted, I can ask to receive my state pension gross and pay tax on it in France. (Would that mean I pay a bit less income tax than in UK?)
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You should never have been receiving other than a gross state pension, as that is how it is paid.

What happens is that they would have adjusted your tax code taking that state pension income into account prior to deducting the tax on the public pension.

So, 1) have you been declaring your state pension in France, because you should have been.
2) Get in touch with the HMRC and ask to speak to a technician, and say that you think that you are not sure if things have been done properly, could they explain.
3) Also explain that your husband always dealt with this and you are trying to get to grips with what he had done.
4) If the house was in joint names then only half the income from it, would have been down to him and the rest to you.

All may be well, but cards up front, I have found the best solution with them.

I think that you will find that as you were already paying UK taxes, that you should have always been paying income tax on your rental, less expenses. This is because your tax allowance will have been used up.

Also, please look at this link, it should be live, it says a rental of over £100 a week should have tax deducted.

In general, french tax is less. When we moved back, as I said, we were paying french PAYE, which was much more than usual french income tax, but UK was even more, so we still had to pay in the UK too to........BUT we didn't have the mutualist to pay, so it was KIF KIF! and made not one iota of difference to our income. We just found living in England cheaper. And eventually did not have to pay the CSG type thing etc too, better still.

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Hereford's answer is correct. In theory the tenants should deduct tax and pay it to HMRC, but in practice it need not happen. You can ask for dispensation to be paid your rent gross by the tenant as a non-resident landlord, and unless you have a black mark on your HMRC records, it will be a formality.

UK rental income is only taxed in the UK and must therefore be declared on your UK tax return, but the UK Land and Property pages aren't complicated or difficult to complete. You still have to declare the rental profit in France, using annexe 2044 alongside your forms 2047 and 2042, since it is taken into account to calculate your relevant tax bands in France. A proportional rebate in respect of this rental income is credited against any French tax due, to avoid paying double tax under the dual tax treaty. As a simple example, if you had say 20k euros of UK rental profit and 20k euros of other income taxable in France, the tax authorities would first calculate your French tax due on the entire 40k euros, then apply a rebate of 20k/40k i.e. 50% to the total.

If you are unsure on how to complete the relevant forms, HMRC and Les Impots will help you if asked.
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