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Tax while living in France.


Hagg
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Hi,

My wife and I are hoping to move to France (Brittany) in the next few years. Our business in the UK is doing well and we are planning to retire there and just take income from the business as money to live on. I know tax is a complicated subject in any country and I'm only looking for a "ball park" answer but if we were taking an income of, say for example, £1000 a week from a UK business and renting a house in France, what sort of percentage of tax would we pay once the UK and French tax offices had taken their share?.

Obviously we will be consulting a good accountant once we start making serious plans but at the moment we are just trying to get a general idea to see if a move would be feasible.

Thanks. 

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If you are receiving an OAP your basic health care will be covered by an S1 form but you may choose to have a 'top up' insurance for the extras.

If you are still working that is a different matter as it might be if the UK leaves the EU but all that is open to much discussion and conjecture.

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Probably the least of your possible problems is having top up insurance. 

IF you are considered as working in France for your UK company then you could end up having to open a branch of your company in France and pay all the cotisations that are due in France. In lots of ways it depends on where your bottom is parked when you are working, as to what happens where.

Sounds to me like you could do with a very good international accountant who has excellent knowledge of the way the french system works.

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[quote user="Hagg"]

Both of us will be just under 50 and wont be undertaking any work in France.[/quote]

Ah but the French rules re residence are different to the UK rules. If your family base is in France then your global income will be considered to be taxable in France.

As others have said you will need an excellent international accountant who should be able to help minimize the potentially very expensive charges incurred just by working and living in France.

Sue

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idun's last line is exactly right. Firstly, do NOT rely on your UK accountant to organise your affairs unless they can guarantee you they have French tax knowledge. Secondly, do not just carry on as you are and then work out your tax in retrospect - the odds are you will have a very large shock.

PM me if you want some more detailed info. I am away for a couple of days but I can point you in the right direction.

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I don't see what the problem would be, your business is in the UK; just carry on paying your

tax in the UK and live in France as a long term holiday maker. As I stated

on another thread who cares how many days you stay in France. Your

paying rent, paying local taxes buying local goods, enjoy France for the

good bits and do what suits you, what is beneficial to you  is in your hands, don't let it fall into the grubby paws of French civil servants.

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What a complicated can of worms lol. Thanks for the replies.

We basically plan to move to France and let our management team run the business while we keep in touch by phone/video conference to keep an eye on things. We see it as semi retirement and definitely do not want to be sat in France working. We are happy to pay tax in whichever country we have to, but opening a branch in France would be a no go due to the nature of the business and if we were forced to do that then we would not be able to move there.

Obviously we need to do a lot of research still but I am hoping that we can find a way through it all and end up in France. 

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But there is that old thing of being a UK resident to get NHS health care.

I was talking to someone at my local hospital and their job is to make health tourists pay including british citizens who are non resident. So when I asked 'how' they would do that, they then said quite a lot of very logical things about how they would go about it, including being able to check up on when people travelled to and fro.

OK this may have been for big operations, I don't know, but people are being employed to do this, so yes, there is something in the system that says that they NHS does care, at least in some NHS trusts they do.

To the OP, well, I don't know what the money you would take from your company would be counted as. I assume that one cannot 'just' take money from one's own company without it being called something.......... a salary or dividend or whatever. But that then would affect what went on in France, because if it was a salary and you were living in France then maybe they would assume that you were working in France.

You really need very very good advice about this.

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[quote user="Hagg"]

What a complicated can of worms lol. Thanks for the replies.

We basically plan to move to France and let our management team run the business while we keep in touch by phone/video conference to keep an eye on things. We see it as semi retirement and definitely do not want to be sat in France working. We are happy to pay tax in whichever country we have to, but opening a branch in France would be a no go due to the nature of the business and if we were forced to do that then we would not be able to move there.

Obviously we need to do a lot of research still but I am hoping that we can find a way through it all and end up in France. 

[/quote]

It is certainly possible that the French authorities would class "phone/video conferences" as working in France, so it can cause real complications.

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As said, semi-retirement has very different implications from retirement. Semi-retired and still making business decisions, means still economically active, and if you're living in France and you are economically active, somehow that has to mesh with the French social security system which will involve some kind of business structure/employment structure. France doesn't offer free rides, if you want to live here you are expected to pay into the system according to your income and ability to pay. Maybe you could 'retire' from the business and then provide services as a consultant, which if you take less than around 30-odd euro a year (32k? 36k? can't remember) in total you could do under the auto entrepreneur scheme with minimum hassle. You would then pay around 25% of that in cotisations which would entitle you to healthcare etc. But you would need to look at the long term implications of becoming an OAP in France rather than the UK.

The 'keeping below the radar' policy might be worth a punt if you only had a year or two to go until retirement and didn't have much of an income so wouldn't pay much in taxes and cotisations in any case. But the more substantial your income is, the higher the stakes are and the higher the fines will be if one day the fisc start poking their noses in. The fiscal systems of different countries seem to be getting more joined up year on year, and 10 or 15 years back taxes with associated fines for failing to submit income declarations, just don't bear thinking about.

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Tinabee has highlighted a very important consideration in that the tax

residence of a company or business is not determined solely on where its

activities are based, or in what jurisdiction it is incorporated, but principally

where the mind and management is located.

So in the scenario mentioned by Hagg, if they lived in France, were majority

shareholders, remained on the board and kept in contact by phone or video

conference, then with any one of these factors there is a very strong

likelihood the French tax authorities would take the view that the mind and

management of the business was in France.

Very important to get appropriate specialised French tax advice, as when

moving to France contact will be made between HMRC and French Fisc, so not

something you can keep off the radar these days.

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We have found an expat accountant who works in France and has clients on both sides of the channel so we will get in touch with him and see what he thinks our options are. Thanks for the input everyone, very much appreciated.
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[quote user="idun"]All I can say is be careful. This needs to be 'right'. It isn't as if this accountant will be paying your social security charges etc in France if there is a problem.

[/quote]

No but any decent accountant will carry Professional Indemnity Insurance and be properly qualified and far better taking advice from them than a forum. [:)]

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The accountant came on a recommendation from someone who has used him in the past and I've read some reviews on his work. If we have any doubts about the advice we will get a second opinion.
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