VERY IMPORTANT INFORMATION RE 2011 DECLARATIONS

[Jay]

That's OK.

I am still none the wiser. Why would they put that in the same letter as the gumph about private/state/government pensions and if it is different to last year surely everyone should get the letter!

[cooperlola]

I think that this might be because:

In the past revenue from property income earned in the UK went into Section VII (revenus exoneres) - I think this is right as that's what the FAQs say, I've never had any such myself - but now it goes into III because, like government pensions, you pay tax on it then get a credit?  Parsnips, Sunday, what do you think?

The second bit I think is just for the benefit of those who might have a government pension and a state old age pension/a private pension from another source etc - to emphasise the fact that the latter still goes where it always has.  But I didn't send out the letter so I'm just guessing at the "logic", such as it is.

[Jay]

Yeah, that makes sense. If that is the case then everyone who has income from property in in the UK should now get a letter as they "are concerned" and have a "tax credit"

[parsnips]

[quote user="cooperlola"]

I think that this might be because:

In the past revenue from property income earned in the UK went into Section VII (revenus exoneres) - I think this is right as that's what the FAQs say, I've never had any such myself - but now it goes into III because, like government pensions, you pay tax on it then get a credit?  Parsnips, Sunday, what do you think?

The second bit I think is just for the benefit of those who might have a government pension and a state old age pension/a private pension from another source etc - to emphasise the fact that the latter still goes where it always has.  But I didn't send out the letter so I'm just guessing at the "logic", such as it is.

[/quote]

Hi,

     The letters that I have seen, while being (comparitively) clear about government pensions , have been totally obscure about rents. They say to declare on 2047 sec iii page 1 (which asks for the address and country and then refers the declarant to form 2044-- WHICH IS NOT APPROPRIATE),  it then says to put the rents on 2042 page 3 box 4BA which also makes no sense.

      After much brain - hurting thought, and ploughing through the notice to 2047, I believe I have worked out a sensible way to declare the UK rents. Put the address on 2047 page 1 sec iii. Then put the gross rents on 2047 page 4 sec VI (on separate line to any Govt pension) subtract all allowable expenses from the gross rents, and transfer the net figure (added if appropriate to the govt pension) to 2042 box 8TK.

    Put nothing in VII or VIII on 2047

[parsnips]

[quote user="Jay"]Yeah, that makes sense. If that is the case then everyone who has income from property in in the UK should now get a letter as they "are concerned" and have a "tax credit"

[/quote]

Hi,

    What you say is correct, but, unfortunately it appears that only certain individual tax offices are , on their own initiative , sending out clumsily composed and translated "explantions".  After emailing the Jonzac office I got a brief email reply, which , if I had not seen the other letters, and had a fair knowledge of the system, I would not have understood, as it basically just refered to the DTT.

[Patf]

Another aspect of this topic - today I took our forms into the Impots (I had completed them just as last year as we haven't been told otherwise) and was asked to fill in new forms for UK bank accounts. I remember doing this years ago, but these are new forms.

I wonder if they will bother to check all our figures against these accounts, Or maybe just to see if we have large amounts of capital undeclared? (If only!)

[Judie]

Sorry to be a pain, but can someone tell me how to download a 2044 which I think I need for UK letting income.

Many thanks.

[cooperlola]

 

HERE Judie

By the way, all, the FAQ Sticky has been updated and the live links to the forms, etc etc all now work.

[parsnips]

[quote user="Judie"]Sorry to be a pain, but can someone tell me how to download a 2044 which I think I need for UK letting income.

Many thanks.

[/quote]

Hi,

   You don't need it.

[Chrissie]

Prepared our forms, went down to local tax office and asked if any changes had happened since last year that affected foreigners with foreign income, and specified we were British (as if the accent wasn't clue enough).  Answer "No, none.  Do it as last year."  Asked again to be sure, and got THE LOOK ("God, these foreigners are thick!") and same response, but louder.  So that's what I'll be doing!

Chrissie (81)

 

[JohnRoss]

Weird thing is that notification of Chrissie's post at 20.14 came in to my email in box some time ago but Parsnips post at 19.01 has only just come in! Do they not come in in the order they were posted? I notice also the TAX FAQS have been updated to reflect what I was told by the bloke in the tax office..............JR

PS I would think anyone doing their tax return for the first time would be well advised to read the TAX FAQS and take Cat's good advice

[CeeJay]

Yep, thanks John, have done, now await with anticipation response from Impots!!!!!

[Gardian]

[quote user="JohnRoss"]PS I would think anyone doing their tax return for the first time would be well advised to read the TAX FAQS and take Cat's good advice[/quote]

Sorry, not for me.

I have proceeded on the basis of the official documentation (tax return guide), i.e. no change from last year.

This whole business has been complete madness.

[JohnRoss]

Well time will tell. What we want to see on the Avis D'Impot in September are the magic words "Montant du crédit d'impot calculé" followed by the amount of tax we have to pay in France on our UK Govt pension entered in 8TK and then subtracted from the amount of income tax we owe! Otherwise a polite but firm letter to the tax man or send round Luigi and the boys!.........JR

[suej]

[quote user="Chrissie"]

Prepared our forms, went down to local tax office and asked if any changes had happened since last year that affected foreigners with foreign income, and specified we were British (as if the accent wasn't clue enough).  Answer "No, none.  Do it as last year."  Asked again to be sure, and got THE LOOK ("God, these foreigners are thick!") and same response, but louder.  So that's what I'll be doing!

Chrissie (81)

 

[/quote]

I had exactly the same reaction yesterday!

 I took our forms completed as per last year  but thought I had better just check again before handing them in.   Madame said that as far as she knew there had been no changes but she would confirm that with her colleague... She came back totally reassured and told me 'absolutely no changes' and then added ' whoever told you that is inventing stories'  - so there!! 

I handed them over and can only wait and see what happens..

 

 

[JohnRoss]

Is there no central/national tax authority that we can contact to get a for sure answer on this one?.................JR

[Gardener]

I emailed my local impots and received confirmation that I had filled it in correctly ie as I have always done.

Truly I think that unless anyone has had specific instructions from their own tax office to do different, I would do what it says on the form.

Why invite any possible problems?

[Boiling a frog]

I completed the return as per the new instructions and handed them in yesterday. I asked to see someone to double check.

He examined the reurn and replied that they were correct.

[parsnips]

Hi,

      To further muddy the waters, I've just found this at                http://doc.impots.gouv.fr/aida/brochures_ir2011/ud_091.html  (instruction brochures from the impots)

extracts;

"Le montant du crédit d'impôt est égal au montant de l'impôt

français correspondant aux revenus qui ont leur source hors de France.

Le montant brut de ces revenus (y compris le montant de l'impôt payé à

l'étranger) doit être déclaré sur l'imprimé 2047 et reporté sur la

déclaration de revenus dans les rubriques correspondantes, en fonction

de la nature des revenus.

Le montant brut total de ces revenus doit, par ailleurs, être indiqué ligne 8TK de la déclaration 2042..................................................

Vous devez indiquer le détail de ces revenus (identité du bénéficiaire,

pays d'où ils proviennent, nature, montant brut et charges déductibles)

en utilisant de préférence, le tableau n^o VI figurant à la 4^e page de la déclaration 2047. À défaut, vous pouvez joindre à la 2042 une note explicative sur le même modèle que le tableau n^o VI."

EXEMPLE :

Vous êtes marié sans enfant. En 2010, vous avez perçu :

• en France, un salaire de 30 000 € (après déduction forfaitaire pour frais de 10 %) ;

• en Allemagne, un salaire de 10 000 € (après déduction de 10 %).

Votre revenu global (français + allemand) s'élève à 40 000 €.

L'impôt correspondant pour 2 parts s'élève à 2 922 €.

Le crédit d'impôt correspondant aux revenus de source allemande se

calcule comme suit : 2 922 × 10 000 / 40 000 = 731 €. Ce crédit d'impôt

s'impute sur l'impôt global." (this is a similar calculation to that for the taux effectif , but used in a different way, the good thing is it seems to give the credit at the "taux effectif" rate --my note)

BUT for rents;..............................

"Revenus fonciers

Précisez sur la déclaration 2047 l'adresse de vos propriétés situées hors de France.

Puis, déclarez les revenus provenant de ces propriétés sur la

déclaration 2044, dans les mêmes conditions que les revenus encaissés en

France.(my note -I don't think this is right for UK rents see below re "taux effectif")

Reportez les résultats au paragraphe 4 de la déclaration de revenus 2042.(my note -see my note above).

Cependant, la plupart des conventions internationales prévoient

l'imposition exclusive des revenus fonciers dans l'État de situation des

biens. Dans ce cas, ces revenus sont exonérés d'impôt en France et pris

en compte pour l'application du taux effectif."  (my emphasis)

So it appears that the "taux effectif" is still alive and well ---but only for rents.

It will be interesting to examine this years "avis".

[JohnRoss]

This example is like the formula I suggested earlier, i.e.

 

Tax calculated on world wide income x (world wide income - UK govt pension) = tax to be paid in France

                                                                       world wide income

 

Does one assume a 10% reduction on all pension gross amounts as usual?......................JR

[parsnips]

Hi,

      Just to update this thread, everyone I know in the Jonzac office district, who completed as in  previous years has now been sent back their declarations , with instructions to redo  as per instructions given in the letter which has previously been quoted here.  Anybody elsewhere had the same?

[tinabee]

Another update. Flers tax office in Orne did not make any notifications of changes before the tax forms were submitted, so we completed them the same as in previous years. They have now sent out a letter in French and English to explain the new process and have also sent copies of the relevant sections of the forms (2042 and 2047) that have been modified by the tax office.

They have also included an evaluation of the tax situation (effectively the same information you normally receive on the AVIS) and the outcome is that we will pay more tax now, using the new reporting system.[:(]

[Gardian]

[quote user="parsnips"] Anybody elsewhere had the same?
[/quote]

Not down here.

[allanb]

[quote user="parsnips"][quote]EXEMPLE :

Vous êtes marié sans enfant. En 2010, vous avez perçu :

• en France, un salaire de 30 000 € (après déduction forfaitaire pour frais de 10 %) ;

• en Allemagne, un salaire de 10 000 € (après déduction de 10 %).

Votre revenu global (français + allemand) s'élève à 40 000 €.

L'impôt correspondant pour 2 parts s'élève à 2 922 €.

Le crédit d'impôt correspondant aux revenus de source allemande se

calcule comme suit : 2 922 × 10 000 / 40 000 = 731 €. Ce crédit d'impôt

s'impute sur l'impôt global."[/quote]

(this is a similar calculation to that for the taux effectif , but used in a different way, the good thing is it seems to give the credit at the "taux effectif" rate --my note)[/quote]If this is indeed how it's computed, I'm not so sure it's a good thing. 

The example implies that the German income was either 11,111€, from which tax of 1,111€ was deducted, or 10,000€, from which tax of 1,000€ was deducted.  I don't think it's clear which is meant, but anyway the poor taxpayer has paid either 1,111€ or 1,000€ in Germany, against which he's getting a credit of only 731€ against his French tax.

Is that your understanding of how it works?

[parsnips]

[quote user="allanb"][quote user="parsnips"][quote]EXEMPLE :

Vous êtes marié sans enfant. En 2010, vous avez perçu :

• en France, un salaire de 30 000 € (après déduction forfaitaire pour frais de 10 %) ;

• en Allemagne, un salaire de 10 000 € (après déduction de 10 %).

Votre revenu global (français + allemand) s'élève à 40 000 €.

L'impôt correspondant pour 2 parts s'élève à 2 922 €.

Le crédit d'impôt correspondant aux revenus de source allemande se

calcule comme suit : 2 922 × 10 000 / 40 000 = 731 €. Ce crédit d'impôt

s'impute sur l'impôt global."[/quote]

(this is a similar calculation to that for the taux effectif , but used in a different way, the good thing is it seems to give the credit at the "taux effectif" rate --my note)[/quote]If this is indeed how it's computed, I'm not so sure it's a good thing. 

The example implies that the German income was either 11,111€, from which tax of 1,111€ was deducted, or 10,000€, from which tax of 1,000€ was deducted.  I don't think it's clear which is meant, but anyway the poor taxpayer has paid either 1,111€ or 1,000€ in Germany, against which he's getting a credit of only 731€ against his French tax.

Is that your understanding of how it works?

[/quote]

Hi,

    First point-the 10% taken off the German income is the fixed 10% deduction allowed in France on all salaries and pensions, any German TAX is ignored so the figure is gross taxable income (after any German charges apart from tax.

    You are right, the new method can lead to a bigger french tax bill.   The foreign tax is not taken into account as the credit given is for any extra FRENCH tax which is calculated on the foreign income. If you paid more in the country of origin of the income , that's between you and that country's tax system. The difference arises from the use of the income  gross of foreign tax.  If you think about it it was a bit odd that the income net of foreign tax was used for the taux effectif, as that also was meant to take account of the foreign income as if it were taxable in France-- in which case it would not have been taxed anywhere else beforehand.

     Judging by a friend of mine the worse affected will be those with a large UK exempt income and a substantial french-taxable revenue as well.