Tax fonciere

[Angie]

Re: the new TF rules coming in next year can anyone tell me how this would affect my husband and I. He is 62 and retired, small private but obviously no state pension yet, and he will be spending more time at our house in France so will become a French resident. I will have to continue to work part time in the UK for the next 3 years. Will our TF reduce as a result of our much lower income and his residency status or will the reduction have to wait until we are both retired and both French residents? Thank you

[suein56]

As far as I am aware the change to the taxe foncière will incur a re-evaluation of the 'value locative' for the new owners when a property is sold and, seemingly, for most people this will result in an increase in the tax due.

There will be no change otherwise.

[woolybanana]

You can be sure that the tax will not decrease as there is a huge revenue deficit from the abolition of Taxe d’Hab.

[EuroTrash]

"he will be spending more time at our house in France so will become a French resident"

It might not be quite as simple as that. Have you looked into France's residency rules? because although you still work part time in the UK, France may well consider you resident here if your family "foyer" is deemed to be in France. Have you looked into how income tax works in France (married couples don't normally make an individual declaration, they jointly declare household income and taxes are based on that); have you looked into how your husband will qualify for healthcare in France once he is no longer UK resident and therefore no longer entitled to "free" NHS cover?

AFAIK there are no changes planned to taxe foncière, it's the taxe d'habitation that is being re-thought, and the plan there is for resident low-income households to become exempt over the next few years. But I think you need to clarify your residence status and its potential implications first and decide whether it's a good idea for your husband to become officially resident in France, because depending on your specific circumstances and how the tax authorities decide to deal with you, any potential savings on taxe d'habitation might be more than cancelled out by healthcare contributions and CSG.

[Angie]

Our house is only 10 years old and we are already paying in excess of 3.5k property taxes per year; hopefully this wouldn't increase!!! Its a rural property but lots of (non build) land. According to another Brit forum approximately 80% of all French owners will see their TdeH reduce significantly in 2018 or won't have to pay it at all. Guess from responses this isn't actually the case then? Thank you

[EuroTrash]

"According to another Brit forum approximately 80% of all French owners will see their TdeH reduce significantly in 2018 or won't have to pay it at all. Guess from responses this isn't actually the case then? "

As said, yes the aim is for families on low to moderate incomes to lose the burden of taxe d'habitation. Not taxe foncière.

But this only applies to résidences principales. Firstly, your situation and your residence status as a household isn't clear cut so it's impossible to say for sure whether or not you woud benefit from this; secondly if your household is deemed resident then being French residents and taxpayers wil bring obligations as well as benefits in France because you can't have one without the other., and it will also mean you lose the benefits of being UK residents eg NHS entitlement. It's not simply a matter of, if one of you spends more than 6 months in France you don't have to pay taxe d'habitation.

[andyh4]

As far as tax residency is concerned, if your husband becomes French tax resident, then you are both French tax resident. Your combined incomes will need to be declared to the French authorities. However your UK income which is taxed or considered for tax if you do not reach the personal allowance is only taxed in the UK. That is the upside. The downside is that your OH's income is taxed as if his income were starting from the value of your income.

Your husband would (because he would not be covered by UK healthcare) have to pay into the health system - currently 8% of income.

This might be worthwhile if you (actually it would only be he) are trying to establish French residency before Brexit to ease any potential problems or barriers at a later date. There is a risk in this either way since although we have seen proposals nothing is yet set in stone. Worst case is that you would in the future have to supply the same information and guarantees regarding income as say a US citizen today.

[Angie]

Thanks all, appreciate your comprehensive replies and it would seem that there is no benefit to my husband becoming a French resident so he will have to spend more time in the UK! The health care isn't an issue because I have a very generous employer who covers all private health costs for us both whether we are in the UK or France so technically we don't have to rely on the NHS or French healthcare system. This of course would change once I gave up work. Many thanks

[EuroTrash]

"there is no benefit to my husband becoming a French resident so he will have to spend more time in the UK!"

Technically yes, but if he actually wants to stay longer in France, neither France nor the UK is going to check.

You don't wake up one morning and discover you offiially became a French resident overnight, that's not how it works. It's up to you to start the ball rolling, by contacting the French and UK tax offices and filling in the relevant forms.

Unless something happens to bring you to the attention of the fisc, and you are very high earners and France realises it is losing out on a lot of tax by not claiming you, they won't make work for themselves.

[suein56]

Euro Trash wrote : Unless something happens to bring you to the attention of the fisc ..

To my mind it's more a question of .. unless smthg brings you to the attention of the uk tax people .. as they really do take notice when couples/people who own a house/home abroad visit it and how long they spend (in total) out of the uk.

[Cathar Tours]

With the new EU database system comes on line (similar to the American one) you will have to get a visa to come to Europe after Brexit. Your be scanned in and out so they will know at least your entry point.

When I returned to Germany the other week they made the Brits go through "None EU Citizens" customs. I have heard this has happened at other airports in Germany but it might have been a central systems failure somewhere as it hasn't happened before.

[YCCMB]

From litrg.org.uk - who set out a pretty comprehensive explanation of how residence in the uk Is measured for taxation purposes:

"Back to the top

How do I tell HMRC what my residence status is?

In the UK, you self-assess your residence and domicile status.

There is no formal process for agreeing your residence status with HMRC (or even for advising them of your arrival in the UK), however if you are someone who is required to submit a tax return, you will need to complete SA109 ‘Residence, remittance basis etc.’ supplementary pages if your residence status is relevant to the entries on your tax return (for example, if you have left out your foreign income and gains on the basis that you consider yourself non-resident in the UK). This is then subject to potential audit by HMRC if they wish to challenge the position you have taken."