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Computer Throwing a Wobbly with the 17.7% Tax Credit


Grecian
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Not sure if anybody else has come across this. After all the discussion last year regarding as to whether to use the 17.7% tax credit or not, as printed on the 2047, I decided to use it last year and had no problems with my tax bill. All figures were accepted.

This year I decided to apply the 17.7% tax credit figure again, and when I get to the end of my 2042 form, and hit the button to  project the income tax and social charge bill I bring up the message:

Compte

tenu du caractère particulier de certains des éléments

télédéclarés, le calcul de votre impôt sur le revenu ne peut pas

être affiché immédiatement. Néanmoins, tous les éléments

télédéclarés ont bien été pris en compte. Le montant de votre

impôt sur le revenu vous sera communiqué avec votre Avis d'impôt.

If I then go back over the 2047 and change the 17.7% to 0%, post the changes to the 2042 and project the income tax and social charge bill, it gives me a figure for the two sums as per normal.

Has anybody else had the same message appear if claiming the 17.7% tax credit figure?

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Yes it is a standard message when you claim the 17.7 among as well as other foreign items. It just means you dont get an immediate calculation of i think CSG or tax. But have to wait for your avis.

As you can only get the CSG deductible allowance in the tear of payment, for french dividends the dividend and CSG are paid in rthe same year, for UK the dividend is paid one year before the CSG on it. The system cannot take account of the difference so cannot give you an immediate calculation.

If you do not put the 17.7 in you wont get the foreign tax credit but your dividends wont be grossed up.

rgds JFB

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Isn't it true dividends in the UK, now up to £2000, are basic rate tax-free and are paid gross? Tax is then only paid by those with a dividend income higher than that or for higher tax payers?

I believe it was because of dividend income being paid gross the consensus here last year was that 0% should be entered rather than 17.7% (although I remember having to enter something like 0.1% as the program would not accept zero) and the then level of £5000 was a very high figure for dividends.

I've not read every line, but the 2047 Notes include "Dans le cas général, le crédit d’impôt est accordé à la  seule condition qu’un impôt ait été effectivement  acquitté à l’étranger." So the credit is only available if you have some paid tax on the dividend (it doesn't matter how much).
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Pomme wrote : I believe it was because of dividend income being paid gross the consensus here last year was that 0% should be entered rather than 17.7% (although I remember having to enter something like 0.1% as the program would not accept zero)

Thank you for reminding me .. yes this came up last year and caused much discussion, but honestly, I had forgotten about the not-being-able-to-enter 0%, workaround.
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Thanks for info John. Last year was the first time that I declared

online, and was able to print out a projection of CSG and tax from the

figures that I declared. As stated before I used the 17.7% last year, so

I am not sure as to why this year it has brought up that message. Maybe

the authorities have flagged me up as being a shady character, and one

to watch.[Www]

There still seems to  be conflicting opinions as

to whether to use the 17.7% again this year, me personally I am going to

use it, as parsnips posted last year it is the tax that the dividend

has borne, not what the individual has paid.

pomme, I have never paid any UK tax on any dividend that I have declared in France all the time that I have lived here. I know the rules have changed in the UK, so to be honest I am totally confused.

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Thanks, I must have missed the message from parsnips last year.

As I understand it dividends, etc are now taxed at a flat rate of 30% (12.8% income tax and 17.2% social charges) and with no 40% allowance. But there is the option of being taxed at the margin rate, 6.8% CSG, and the 40% allowance.

A few questions:

1. is my understanding correct?

2. is there a calculator which works for income which includes foreign income to help decide which is the better option?

3. How you indicate you want to be taxed using the marginal rate option?
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Blimey pomme you have gone and muddied the waters even more now! I was aware of the flat rate 30% coming in, but I thought that it started on this years income, next years form, could well be wrong about that so quite happy to be corrected. I was not aware of the other option that you mention, I would think that would be beneficial for my situation if this is true. Maybe there is somebody out there who actually know what is going on.[:D]

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I think I've found the answer on p35 of the Brochure IR 2018 in the section QUELQUES NOUVEAUTÉS REVENUS 2018 and it doesn't apply to the current tax forms.

RCM et plus-values

Les revenus de capitaux mobiliers perçus à compter du 1.1.2018 et les plus-values de cession de valeurs mobilières réalisées à comp-ter de cette même date sont imposés à un taux forfaitaire unique de 12,8 % auquel s’ajoutent les prélèvements sociaux de 17,2 %, soit au total 30 %.

Les contribuables peuvent toutefois opter pour l’imposition de l’ensemble de leurs RCM et plus-values au barème progressif de l’impôt sur le revenu (les prélèvements sociaux restant dus au taux de 17,2 %).

Revenus de capitaux mobiliers

Lors de leur versement, les produits de placement à revenu fixe et les dividendes et revenus distribués assimilés font l’objet d’un prélèvement forfaitaire non libératoire, à titre d’acompte. À compter du 1.1.2018, son taux est de 12,8 % (au lieu de, respectivement, 24 % et 21 % avant cette date). Ce prélèvement, effectué lors du versement des revenus, constitue un crédit d’impôt qui s’impute sur l’impôt sur le revenu dû par le contribuable.

Les contribuables dont le revenu fiscal de référence de l’avant- dernière année précédant celle de la perception des revenus (RFR de l’année 2016 pour les revenus perçus en 2018) n’excède pas certains montants peuvent demander à être dispensés de ce prélè- vement.

Pour les produits de placement à revenu fixe, il s’agit des foyers dont le RFR n’excède pas 25 000 € (personne seule) ou 50 000 € (couple soumis à imposition commune).

Pour les dividendes et revenus assimilés, il s’agit des foyers dont le RFR n’excède pas 50 000 € (personne seule) ou 75 000 € (couple soumis à imposition commune).

La demande de dispense doit être formulée au plus tard le 30 novembre de l’année précédant celle de la perception des revenus au moyen d’une déclaration sur l’honneur.

Lors de la taxation de la déclaration des revenus de l’année, les revenus de capitaux mobiliers perçus à compter du 1.1.2018 sont soumis, pour leur montant brut, à un prélèvement forfaitaire unique (PFU) de 12,8 %.

Les contribuables peuvent toutefois opter, sur leur déclaration de revenus, pour l’imposition de l’ensemble des RCM et plus-values au barème progressif de l’impôt sur le revenu.

En cas d’option pour l’imposition au barème, les revenus sont retenus pour leur montant net, c’est-à-dire, le cas échéant, après application de l’abattement de 40 % sur les dividendes et après déduction des frais et des déficits RCM des années antérieures. Les intérêts des sommes inscrites sur les plans d’épargne-loge- ment et les comptes d’épargne-logement ouverts à compter du 1.1.2018 sont imposables.

It is rather confusing with the "white tax year" and some things applying this year and some next.

And, if I understand it correctly (which I probably don't), I don't understand the statement about applying for dispensation before 30 Nov and how it works for non-French revenues.
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Sorry that I have not replied to your post pomme, but I have been away for the weekend.

So we haven't got to worry until next year for the flat tax changes, I do wish these politicians would stop changing things every year. If this  helps I have found an explanation in English, although whenever you read stuff regarding tax changes I am not sure that it is easy in any language.

https://www.french-property.com/news/tax_france/saving_interest_dividends_2018/

I think that if your marginal rate is 14% then there is no advantage to apply the flat tax. You would end up saving 1.2% in income tax, but lose the 40% allowance on the declared dividends. I assume that the flat tax will still carry the 0% band for the first 9800 euros, if not then it is a real non-starter.

Next problem is how to inform the tax office that you wish to opt out, I think that I will finish the tax form first, and hit the button, and then maybe email them to enquire as to how you opt out.

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