Getting a feel for my tax situation - I guess this will hurt.....

[Dan Chase]

Hi All,

Just getting to grips with the finer details of the French system.....

If anyone could shed light on what could be my potential burden and which type of enterprise I would be looking at if:

1.  I lived full time in France.

2.  I owned a modest house in France outright (taxes foncere and the other one looking around 200 euro each)

3.  Income split between modest Gite Rental of around 8000 euro and interest on capitol at around 12000 euro

4.  Any ideas on heatlh charges (coming up for 40, no underlying issues, non smoker)

 

Everytime I try and get a handle on the above I find myself bombarded with options, nuances and schemes - straight forward help would be apprectiated. 

One last thing - money in the bank - better in the UK or shifted to France?  Although the rates are junk at the moment they will head upwards in the next couple of years and the money is pretty safe.

 

Thanks, Dan.

[Pickles]

I leave the rest to others in a better position to comment but ...

[quote user="Dan Chase"]One last thing - money in the bank - better in the UK or shifted to France?  Although the rates are junk at the moment they will head upwards in the next couple of years and the money is pretty safe.[/quote]

If you are living in France then you CAN get the interest in a UK bank account paid gross - it is taxable only in France. However, irrespective of the exchange rates, you might want to think about taking advantage of tax-free or tax-efficient investments in France which may increase your effective income - eg PEL, assurance vie, etc. In some cases you can take advantage of assurance vie-type contracts set up BEFORE you move to France which can be non-taxable in France after you take up residence. I don't know enough to say any more other than that the option does exist.

Regards

Pickles

[Araucaria]

[quote user="Dan Chase"]3.  Income split between modest Gite Rental of around 8000 euro and interest on capitol at around 12000 euro[/quote]

Did you mean the capital was €12,000, or that that was the amount of the interest you expect to earn?

[Dan Chase]

Hi,

I am looking at around £12000 a year in interest - this is based on current levels so, fingers crossed, may edge up a bit in the future - though I would probably lock the capitol away in 3-5 year monthly paying bonds spread accross a number of banks to help limit risk and look at receiving the fans without UK tax payable, that was untill I read the above post which looks like I shall need more advice.

.......I have a feeling I shall need a trip to Blevins or similar!

 

Thanks, Dan.

[Dan Chase]

Yes, yes, I meant Funds not fans...................

[Gardian]

[quote user="Dan Chase"]

I am looking at around £12000 a year in interest

.......I have a feeling I shall need a trip to Blevins or similar!

[/quote]

With the greatest possible respect, I think that people like them are better equipped than most of us on here to assist you.[B] 

[Bugsy]

£12,000 a year in interest, flippin' 'eck, the stuff of dreams for most of us.

I'm always puzzled when 'these' posts appear. How would anyone accumulate that sort of wealth and then have to ask basic questions on a forum.

It couldn't be a touch of "look at me how well I've done", could it.

Oh cynical me ................. [:)]

.

[cooperlola]

[quote user="Gardian"][quote user="Dan Chase"]

I am looking at around £12000 a year in interest

.......I have a feeling I shall need a trip to Blevins or similar!

[/quote]

With the greatest possible respect, I think that people like them are better equipped than most of us on here to assist you.[B] 

[/quote]I agree.  As far as your healthcare is concerned - that too is a matter for a professional.  You have the choice of getting it via a work scheme (ie registering your gites as a business and paying cotis) or getting E106/private cover for five years then joining CMU and paying 8% of your income.  As you pay social charges on the unearned (the £12k  a year interest) income, it may indeed be better not to be in the French health system but to stay private.  Thus I think only a really decent French-savvy accountant can help you with the amounts of money you're talking about.

[parsnips]

Hi,

      The OP's situation is not complicated. His income is approx 20 000€ pa, of which 14 320€ is taxable (if he opts for microBIC on the gites).His liquid capital is around £250 000 so he has no worries about wealth tax, (he has a "modest" house and gites).

      If he is single he would pay (2009 fig.) 595€ income tax and 1 425€ CSG on the interest.

      If married he would pay no income tax but still 1 425€ CSG. 

      The CSG on the interest has nothing to do with health cover, which as has been said , once E106 cover is not available, would be cheapest to obtain by registering his gites under "auto-entrepreneur", or he could go private until he qualifies for entry to the french system (a much more expensive option).

      He will also save by not approaching any of the "IFA"s---I can tell him for free what they will charge him for---his capital would be much less taxed and have other advantages , for succession in particular---if re-invested in french assurance vie plans , the best way to invest in these is NOT via an IFA (who will be looking for high entry fees and commission), but by dealing personally with one of the internet branches of the major assurance companies (NO entry fees, low management fees, and the possibility to make unlimited free fund switches online). He should look at the sites of "Fortuneo" and "Linxea" , and there are others.

[suein56]

[quote user="parsnips"]

... of which 14 320€ is taxable (if he opts for microBIC on the gites).

      If he is single he would pay (2009 fig.) 595€ income tax and 1 425€ CSG on the interest.

      If married he would pay no income tax but still 1 425€ CSG.

[/quote]

Wouldn't that be 1732€ for the CSG? 14 320€ x 12.1% = 1732.72€?

Sue

[cooperlola]

I'm only asking out of personal interest, Parsnips, it may not be relevant to the o/p but isn't there an element of CSG which is only payable by those "a la charge" of the French health system?

[parsnips]

Hi Sue,

        If he opts for AE he will presumably opt to pay his social charges monthly or quarterly so need not pay again on the gite income.

 Hi coop,

        CSG/CRDS and PS are all payable on interest and are not connected to health provision--only UK pensions are exempt from social charges for E121 holders.

[cooperlola]

Thanks. [:)]

[Dan Chase]

[quote user="Bugsy"]£12,000 a year in interest, flippin' 'eck, the stuff of dreams for most of us.

I'm always puzzled when 'these' posts appear. How would anyone accumulate that sort of wealth and then have to ask basic questions on a forum.

It couldn't be a touch of "look at me how well I've done", could it.

Oh cynical me ................. [:)]

.
[/quote]

Err..... sorry, didn`t mean any offence, neither was I show-boating.  For many years I have been holidaying in France and dreaming the dream - I have also followed many tales of woe via this and other forums, read all of George Easts hilarious yet often sad tales and witnessed my own parents dream shatter following an ill-timed French venture with other friends back in `89-`92.

I would have made a move several years ago, but, following good advice and the above observations figured it best to wait, work hard and then take the plunge. 

As for putting figures on the forum, I was simply looking for a little advice, nothing concrete, to start the process.  I have read many posts that on finance that go nowhere as there is little or no detail.

Many thanks to the other very constructive posts - it does not look quite as bad as I had first thought.....

Thanks, Dan.

[cooperlola]

On the health front, there have been some reports (I was contacted by an expat newspaper just the other day and their info' confirms their veracity) that the EU Commission is now challenging the French government's right to allow non-French European non-workers (sorry about the cumbersome description but I hope you know what I mean) entry into the health system here.  If they win their case and the government is forced to back down then your health costs would be 8% of your RFR (taxable income less allowances) if your gite were not registered under a business scheme.

See the article referred to at the end of this thread:

http://www.completefrance.com/cs/forums/2/1171711/ShowPost.aspx#1171711