Declare French LMNP in the UK

[ldav]

Hello, I have a simple question and I have been trying to get an answer from various tax advisers and I cannot find one answer and a reference to a legal text.

My situation is the following :

- I am a French national, living in the UK and employed in the UK, where most of my income coming from my employment, a situation that will not change

- I own some properties - students flats - in France that I intend to rent as a furnished basis under the status of LMNP (Loueur Meuble Non Professionnel) - and declare the income under there status regime simplifie in France, therefore filling out the tax certificate 2031.

- My question is the following - what do I need to report to the UK tax authorities as my income ? My French tax result on 2031(benefice imposable) or the gross income ? Or the income after deductible costs, and crucially can I deduct the amortissement / depreciation from my costs for UK tax.

I am a bit lost, as some people say as long as your French net income is 0 or less (which is the case), you don’t have to pay uk taxes, just declare the loss, and some say I have to report gross revenue minus some costs (but not amortissement), which would lead to the weird result of having to pay uk taxes on a French investment where I am losing money from a French tax perspective.

Anybody had the same issue?

[Chancer]

[quote user="ldav"]- My question is the following - what do I need to report to the UK tax authorities as my income ? My French tax result on 2031(benefice imposable) or the gross income ? Or the income after deductible costs, and crucially can I deduct the amortissement / depreciation from my costs for UK tax. [/quote]

 

My pragmatic answer is to declare whichever figure is more beneficial to yourself, the lowest one be it the net revenue after the abattement (which is supposedly your costs) or the ney figure after your true costs including depreciation and repayment of the loan.

 

now its probably totally wrong as I believe that things have got tougher in the UK and that mortgage interest is no longer deductible on UK buy to lets but how would you as an immigrant or me as no longer resident know? [I] The crucial thing is that you can reasonably justify the figure you have given them, its unlikely to be contrôled anyway.

 

What you should not do is use the net Micro-BIC figure and then deduct your costs, il ne faut pas deconner!  - you would not be able to reasonably justify that and it would show mauvaise foi.

Someone else may be able to tell you the correct info as could the Inland revenue but I suspect that as you have not asked them you probably think the same way as I do.

[Rose (& Greyman)]

The correct way, if you are UK tax resident, is to ignore the French calculation rules and declare the rental profit using UK rules i.e. gross rental income less allowable costs under UK law. This does not permit amortisation. You can then take a credit for any French tax paid on this source.

This may result in UK tax payable but that's life. The treaty only eliminates double taxation not all taxation.