Taxation of couples

[ando]

Hello, I'm planning to retire to France in 4 years time all being well. Lots of stuff i need to look at

but first of all does anyone know if there is any difference in the way unmarried couples are taxed

as opposed to married couples.

[tinabee]

I believe that if you are unmarried you have to each complete a tax return separately. If you have a PACS then you are taxed as a household, as if you were married.

There is a good introductory guide here

[ando]

Thanks for that Tinabee. But what is a PACS ?

[Sunday Driver]

The civil solidarity pact (pacte civil de solidarité, or PACS) is a contract between two people, of the same or different sex, that provides a formal structure for their life together. Each partner is required to give material assistance to the other, and they are jointly responsible for the cost of housing and other day-to-day expenses. Either partner is free to terminate the civil solidarity pact with prior notice of three months after complying with a few formalities.

 

With regard to income tax, the partners are subject to joint taxation beginning in the third year after they register their PACS.  The tax return is signed by both partners and filed under both names. The tax authorities may claim the entire income tax liability from either partner, and either may be subjected to tax audits in the future. In the event that the PACS is formally ended, each partner once again becomes personally liable for tax on income earned during the year of the break-up.

The partners are also taxed jointly for wealth tax, but in this case joint liability takes effect in the first year of the pact. They both sign the return and are jointly liable for payment of the tax and any subsequent audits.

 

[LesLauriers]

Quote;

The partners are also taxed jointly for wealth tax, but in this case

joint liability takes effect in the first year of the pact. They both

sign the return and are jointly liable for payment of the tax and any

subsequent audits.

SD, looking at "who" is liable to pay wealth tax it states.........

un couple en situation de concubinage notoire

: “le concubinage est une union de fait,

caractérisée par une vie commune présentant

un caractère de stabilité et de continuité, entre

deux personnes, de sexe différent ou de même

sexe, qui vivent en couple”.

I take this to read, two people living together, even without a pacs, are still liable to assesment based upon their joint wealth. Any thoughts?

[ando]

Ok Thanks for that SD. I wonder does a couple have to wait until they are classed as residents before being able to register theit PACS

as it seems that in having to wait till the 3rd year before being subject to joint taxation could involve paying more tax in our circumstances.

Any idea SD. Thanks also Les Lauriers.

[Sunday Driver]

LL

Yes, the tax foyer for ISF is structured differently to that for income tax.  Two people living together without a PACS are assessed jointly for ISF whereas, say, an adult child who is included on your income tax declaration is not.

Ando

You have to register your PACS through the tribunal d'instance nearest to your common residence, so I expect you'd need to be resident in France.  It is possible to register a PACS abroad through a French Embassy or Consulate, but to do that, at least one of the parties must have French nationality.