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Nasty Shock


bixy
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Today we received a demand for taxe d'habitation. We haven't paid this since we were sixty. Looking at the revenue fiscal de reference, this seems to have doubled since our tax return for 2009, although our income certainly hasn't! Am I right in thinking that this has come about because of the new way of entering UK income on the tax return this year? Has anyone else experienced this?

Patrick

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In many cases, especially for those declaring on-line where there was a glitch in the site, they made the mistake of not taking the UK income into account in calculating the

le revenu fiscal de référence

and so if you had little or no French taxable income it looked as if you were under the limit for paying the taxe d'habitation.

For example someone with a Local Government pension of 10,000 plus an OAP of around 5000 was only counted as having 5000, when in fact the revenu fiscal de référence which determines the limit over which you pay Taxe d'Habition should have been 15,000.

You can see this limit here

http://www.service-public.fr/actualites/00794.html

"10 024 euros pour la première part de quotient familial, majoré de

2 676 euros pour chaque demi-part supplémentaire ou de 1 338 euros en

cas de quart de part supplémentaire."

In fact many British people are well over that when their UK pensions are taken into account.

The new way of entering this on the Déclaration has exposed the previous error.

Many have been not paying Taxe d'Habitation because it appeared previously that they were under the limit, but now the real situation is clear.

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Norman is almost certainly right over the cause of your problem.

As like as not (as you have already guessed) your RFR is the 'problem' and some time back I warned that this could bite back for some of us - it did for me, but for different reasons!

If the above is true, then with all due respect, think yourself lucky that you've had nothing to pay in previous years. 

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What would your thoughts on for example if like myself I have No Government pension just basic State pension therefore will that state pension be added to my investment income to calculate my overall income?

Last question .... has a basic state pension always been part of the overall calculation?

Thank you.
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I'm sure that Norman and MBK have this right but I'm a bit curious.  I had thought that the point about the old system was also that overseas-taxed income WAS taken into account when calculating RFR.  Are you now telling me that those whose income is taxed in the UK have, heretofore, not been paying their full cotis, been exempt from taxes like these (assuming they come below the threshold as a result) for all this time and nobody has noticed until now?
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Thanks for those replies. I think Norman has hit the nail on the head. It is what I suspected, and as he says, it's the different way of entering the info that has exposed the error. Tant pis. I guess I'm not the only one to be affected by this. I only hope they don't decide to go back through the old paperwork....!!

Patrick

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My above post query......

One of the reasons I am asking about all this is because we have not had our Avis Impot returned that applies to a number of UK people in my area. We went to the Impot office on the 16th Sept and was told we should have it by the 14 Oct. I read this (6th paragraph down in link)

Quote .....'The official went on to say that the tax notice, which normally arrives in September, might be later this year because of the backlog of changing all French resident UK nationals incorrect French returns for this year!’

In......http://www.french-property.com/news/tax_france/government_service_pensions_confusion/

Panicking... cos we dont have a Government pension so what can they be changing in our tax return, its giving me nightmares!
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[quote user="cooperlola"]I'm sure that Norman and MBK have this right but I'm a bit curious.  I had thought that the point about the old system was also that overseas-taxed income WAS taken into account when calculating RFR.  Are you now telling me that those whose income is taxed in the UK have, heretofore, not been paying their full cotis, been exempt from taxes like these (assuming they come below the threshold as a result) for all this time and nobody has noticed until now?[/quote]

Yes it should have been, but in many areas I think it wasn't, either because of a glitch on the online declaration, or because of the way some tax offices treated the income. As it wan't taxable in France they just ignored it, rather than including it in the RFR.

This happened to me twice and I emailed the office to point out the error to avoid a possible later 'redressement'.  On one occasion they sent me a revised Avis, ans on another they didn't.

What do you mean by 'not been paying their full cotis'  ?

What is there to pay?

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[quote user="milkeybar kid"]What would your thoughts on for example if like myself I have No Government pension just basic State pension therefore will that state pension be added to my investment income to calculate my overall income?

Last question .... has a basic state pension always been part of the overall calculation?

Thank you.[/quote]

The basic state pension (OAP) is taxable in France and that has always been the case, so for you nothing should have changed. I believe this is added to investment income, but as I don't have any I cant be sure...

I posted a spreadsheet to enable people to calculate their Tax liability in France a couple of months ago.

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[quote user="cooperlola"][quote user="NormanH"][What do you mean by 'not been paying their full cotis'  ?

What is there to pay?

[/quote]I pay a percentage of my RFR for healthcare.  Doesn't everybody who doesn't work and is under UK state retirement age who is entitled to CMU cover?[/quote]

Oh sorry, as I have never had the CMU I didn't realise what you were talking about..

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Just had another thought.

Those whose income wasn't taken into account may not have been paying any French tax under the old method, but may well find themselves paying a small amount now..

In my previous example someone with a Gov pension of 10,000 and an OAP of 5000 should have been paying tax on the OAP part.

But if the 10,000 was ignored then the 5000 of OAP was under the threshold for tax and so wasn't taxed.

Now I calculate that they would pay (for a single person) 184 €

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[quote user="NormanH"][quote user="cooperlola"][quote user="NormanH"][What do you mean by 'not been paying their full cotis'  ?
What is there to pay?
[/quote]I pay a percentage of my RFR for healthcare.  Doesn't everybody who doesn't work and is under UK state retirement age who is entitled to CMU cover?[/quote]

Oh sorry, as I have never had the CMU I didn't realise what you were talking about..
[/quote]Whatever, it does appear that the mistakes in RFR calculations have been benfitting those who are taxed in the UK up until this year.  It's not much of a consolation for the punishing new rules but it is something!
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Hi,

      Even people whose UK taxed income has been taken into account in calculating the "Taux Effectif" in previous years and who paid no tax, may find themselves caught by the new system of credits.  Previously they may have been on the verge of paying french tax , but the system of decote and the seuil de recouvrement has put them under the limit.  Because the new system takes the gross UK exempt income into account the "virtual " tax rate generated  may just nudge them into a higher tax band and push their french liability just beyond the relief of the decote etc, and leave them with a tax bill around 100€ on a similar income.

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