Can personal allowances be set against Uk income for French taxpayer?

[val douest]

I understand from reading back posts in this forum that income is taxed in the country in which it originates.  If someone is in the French tax system, with tax on normal income being paid in France, but then does some consultancy work entirely within the UK for a UK company and is paid in the UK, then presumably this income is declared in the UK and tax on it is payable in the UK.  In this case it it possible to set the income against UK personal allowances - or do these personal allowances disappear if one becomes tax resident in another country?  Your thoughts/advice appreciated!

Val

[Maricopa]

Hi Val

For income that is taxed in the UK, personal allowances are available.

M

[Gardian]

[quote user="val douest"]I understand from reading back posts in this forum that income is taxed in the country in which it originates.  If someone is in the French tax system, with tax on normal income being paid in France, [/quote]

Val ............

Income (worldwide) is taxed on the basis of residency.  Thus, if you are a French resident, there's no such thing as normal or abnormal income: it's all taxable here.

Presumably you've been through the process to divest yourself of UK tax liability, which of course implies that in para 1.

Put simply, you're either taxed here or in the UK, and if you're resident here, then that's it.

[Ron Avery]

"Income (worldwide) is taxed on the basis of residency.  Thus, if you are a French resident, there's no such thing as normal or abnormal income: it's all taxable here." 

I don't think that is true.  AFAIK,   Income earned in the UK such as rent and consultancy work done in the UK is taxed in the UK and  is not taxable again in France, although it should be declared to get your RFR, and yes you do get your UK free pay against this income.

[Will]

Regardless of the nationality of the source of income, or the currency, where it is taxed depends on where the work is actually carried out. There are some exceptions, the most common being property rentals and people working temporarily on an assignment overseas (under an official arrangement, usually defined by having the appropriate E form).

Thus if you do teleworking in France for an English company, you declare and pay tax on the income in France (regardless of whether you are salaried or self-employed). If you actually travel to England to do the work, then it is taxable in England. Income taxed in Britain is subject to British personal allowances.

If your main home is in France, or your family/dependants are in France, or you have a significant financial interest in France, you are deemed by the French authorities to be fiscally resident there (the fact that you may spend less than 183 days in France, or that you are employed in Britain and may spend 90 days or more there is irrelevant in such cases). If you are French tax resident, you are obliged to declare your worldwide income, even if it has been taxed elsewhere. Where any particular income is taxable is determined by the double taxation agreement.

Your British earnings must be declared in France - that could mean that when added to any other income it will mean that you move to a different French taxation rate. So even if you have already paid tax on your overseas income, or the income has been non-taxable there because it is less than whatever personal allowance might apply to you in Britain, you could have some more tax to pay in France.

French taxation is further complicated because the income for a married couple is assessed jointly, rather than being taxed as individuals. So it's nore or less as Ron says, but not necessarily that simple.

Payment of social security contributions is another issue altogether, that has to be considered alongside personal taxation. A good accountant in France is strongly recommended if your finances are anything other than totally straightforward - the consequences of trying to do it yourself and getting it wrong can be serious.

 

[allanb]

[quote user="Ron Avery"][quote user="Gardian"]Income (worldwide) is taxed on the basis of residency.  Thus, if you are a French resident, there's no such thing as normal or abnormal income: it's all taxable here.[/quote]I don't think that is true.

[/quote]It is definitely not true.

I think Will has covered the point, and the only thing I would add is that in order to ensure that income taxable in the UK is not taxed again in France it is necessary to declare it in the right place on the French tax return.   Another reason for taking advice, if you are unsure.

[Panda]

[quote user="val douest"]I understand from reading back posts in this forum that income is taxed in the country in which it originates.  If someone is in the French tax system, with tax on normal income being paid in France, but then does some consultancy work entirely within the UK for a UK company and is paid in the UK, then presumably this income is declared in the UK and tax on it is payable in the UK.  In this case it it possible to set the income against UK personal allowances - or do these personal allowances disappear if one becomes tax resident in another country?  Your thoughts/advice appreciated!

Val
[/quote]

Hi Val

Your question is similar to mine yesterday and it sounds like you are planning on doing the same.  I will let you know if I find out more but from what I understand so far, if you're working in the UK you pay tax and NI on your income, you declare it as income taxed in a foriegn country on your french tax return alongside declaring your french based income as normal.  Normal allowances are applied in the UK.

I am planning be employed by the UK company rather than self-employed as I think that would add further complications.  What are your thoughts on that side of things?

Panda

[val douest]

Many thanks to everyone for their information and advice.  Panda, this is likely to be a one-off, involving my husband doing some work on contract back in the UK.  I don't think he will have the option of being employed by the outfit concerned but it you are able to do so it sounds as if it might be more straightforward.  Presumably the employer will be able to give you all the paperwork to back up your status, income, any tax paid, term and place of employment etc which should keep everyone happy.  I'm sure it would be very useful to post again with your experiences and any problems when you've completed an assignment.  Meanwhile - good luck!

Val