oldgit72 Posted September 7, 2009 Share Posted September 7, 2009 HMRC operates a 91 day per year rule for determining whether tax is payable in the UK. Can anyone confirm whether the same situation occurs in France? I am particularly interested in situations where an individual who has become a permanent resident in France then reverts to semi permanent status by spending less than 6 months here. In other words, how easy is it to extract oneself from the French tax system once in it? Thanks Link to comment Share on other sites More sharing options...
Will Posted September 7, 2009 Share Posted September 7, 2009 France has a totally different system from UK for determining fiscal residence, and has no 183 day/6 month rule as such, let alone a 90/91 day rule. This link points to a useful summary, but it is not comprehensive, and its conclusions are debatable in parts - compare its statements about domicile with the definitions issued by HMRC for example. You would need to consult a specialist tax advisor if this is important to your affairs.Remember that 'residence' is not an exclusive term; you can be tax resident in more than one country, and where tax is paid is determined by double taxation agreements. Link to comment Share on other sites More sharing options...
Pickles Posted September 7, 2009 Share Posted September 7, 2009 Deleted because Will's post was better.RegardsPickles Link to comment Share on other sites More sharing options...
AnOther Posted September 7, 2009 Share Posted September 7, 2009 The 90 day rule is generally only applicable to UK residents working abroad and in receipt of a nil tax code and as Will says is completely irrelevant and unknown in France.I think your question "how easy is it to extract oneself from the French tax system once in it" is an interesting one though and a subject worthy of discussion in it's own right. I have wondered a few times how people who go back to UK get on. I'm sure some will just disappear and therefore either not receive or ignore their French tax return when it arrives which of course cannot be the right thing to do! Link to comment Share on other sites More sharing options...
Will Posted September 7, 2009 Share Posted September 7, 2009 [quote user="Pickles"]Deleted because Will's post was better.RegardsPickles[/quote]Thanks, but I don't necessarily agree - you mentioned social security contributions for one thing. It's quite possible to do something 'clever' to save a bit of income tax, only to find that the saving is more than cancelled out by something else, like social charges. Link to comment Share on other sites More sharing options...
oldgit72 Posted September 8, 2009 Author Share Posted September 8, 2009 That was one of my concerns Will. I am confident that with a modest pension that regarding income tax we will be better off under the French system, however being stuck paying French social fund contributions on savings income should we at some future date decide to spend more of the year in the UK is a concern. Paying higher UK tax and higher French social charges would hurt. Mind with interest rates forecast to stay low, 12% of not very much is not very much. Link to comment Share on other sites More sharing options...
oldgit72 Posted September 8, 2009 Author Share Posted September 8, 2009 [quote user="AnOther"]The 90 day rule is generally only applicable to UK residents working abroad and in receipt of a nil tax code and as Will says is completely irrelevant and unknown in France.I think your question "how easy is it to extract oneself from the French tax system once in it" is an interesting one though and a subject worthy of discussion in it's own right. I have wondered a few times how people who go back to UK get on. I'm sure some will just disappear and therefore either not receive or ignore their French tax return when it arrives which of course cannot be the right thing to do![/quote]I beieve that you are supposed to obtain a tax clearance form from the country you are 'leaving' before becoming tax resident in the UK again. From Will's link, my 91 day rule concern would not seem an issue though as should we 'return' we would have a property in the UK and be at least 6 months+1day there and then be able to show that our 'centre of economic interest' is the UK and not France. All hypothetical at this stage though as we have no wish to return to UK at present. Link to comment Share on other sites More sharing options...
andyh4 Posted September 8, 2009 Share Posted September 8, 2009 "I beieve that you are supposed to obtain a tax clearance form from the country you are 'leaving' before becoming tax resident in the UK again" I don't think that is the case. You don't need permission to leave one tax regime in order to join another. Indeed, as has already been stated, you can be in parallel tax regimes and here the DTT will determine which regime taxes you for what. So for example, I work in Germany (and am taxed there), my wife lives in France and I spend all important family events in France (which means that irrespective of my wife's residence I am regarded as tax resident). We also have interests in the UK and as such are taxed (or at least are required to submit tax returns) in all three countries. Note: not one of these conditions refers to a 90/91/180/183 day residence rule - which are generally only brought into play as a final resort when all of the "normal" tests fail to establish a tax residency. Link to comment Share on other sites More sharing options...
parsnips Posted September 8, 2009 Share Posted September 8, 2009 Hi, If you leave France during the tax year you are required to declare your revenue up to the date of departure. This declaration is made to your usual tax office (not the non-residents dept). If you receive french taxable income after your departure you should submit a special declaration 2042NR. Link to comment Share on other sites More sharing options...
Will Posted September 8, 2009 Share Posted September 8, 2009 This is the official document issued by HMRC to give guidance on residence and domicile as it concerns the UK. France has its own set of rules and definitions, so please don't try and apply HMRC's principles to hypothetical French residence issues. Section 7 tells you what is required of you for tax purposes when you take up residence in (or return to) the UK.http://www.hmrc.gov.uk/cnr/hmrc6.pdf Link to comment Share on other sites More sharing options...
HoneySuckleDreams Posted September 8, 2009 Share Posted September 8, 2009 Residence and domicility are two issues, but there is a 3rd. Liability. You can be non-resident/non-domiciled but still have a liability to pay tax.I was given the following link to read by HMRC as an aid to wether I was liable to pay tax in the UK. (My issue is the other way round. I want to declare all my earnings in France not the UK).(sorry...can't find the "add link" bit when I post so you will have to copy and paste the link)http://www.hmrc.gov.uk/manuals/intmanual/INTM261000.htmAfter talking to HMRC it is up to me to decide if I am not liable, but also have a good argument as to why (if HMRC ever get in touch and argue that I should be paying tax in the UK).They (the overseas residence part of HMRC) admitted that they don't know all the rules themselves and they said that most cases of "Liability" are dealt with on a 1-2-1 basis Link to comment Share on other sites More sharing options...
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