Tax query - Rental Income received in sterling

[busybee]

Hi,

First of all, thanks so much for all the excellent information and useful links on this site, which have helped me enormously in preparing our first tax return.

I have a query which I have not found another reference for -

Most of the gite rental income that we received last summer was actually paid by our UK clients directly into our UK bank account. I am guessing that as the income is for our property in France it just goes into box NO / OO in euro equivalent on 2042C - or do I need to declare it separately on 2047, and if so, where?

Thanks,

busybee

[busybee]

Doesn't anyone have an answer to this for me?

I would be grateful for your help please.

Thanks,

busybee

[gosub]

Why make it complicated ? declare the euro equivalent of the monies paid into your UK account, in just the same way that you would if you had received the money in France  in euros.

I am not an accountant.

[allanb]

I'm not sure what your question is.

"Is your gite income taxable in France even though it's paid to you in the UK?" - yes.

"Is the amount to be reported in euros?" - yes.

"Are boxes NO/OO on form 2042-C the right place to declare it?" - I think so; I can't see anywhere else for it.

"Does it have to be declared on form 2047 as well?" - no.

It does seem to me that the heading of form 2047 can be misleading.  It's stated to be for revenus encaissés à l'étranger, which literally might mean income "received" or "encashed" in another country.  

But the detailed instructions make it clear that it's the address of the property that counts.  And I think it's universally accepted that (for example) the taxation of a UK pension is not affected by whether it's paid into a UK bank account or a French one.  

[Ron Avery]

Allan said " And I think it's universally accepted that (for example) the taxation of a UK pension is not affected by whether it's paid into a UK bank account or a French one". 

But it is declared on the 2047 Alan.  However, in this case, declaring it or not declaring  on the 2047 is not going to make any difference to the outcome after all the 2047 is only a calculation sheet, it could be entered as income from abroad on the 2047 and then carried over onto the 2042, but as long as its in the right box on the 2042  it will be correctly treated for tax.

I must say its good to see honest people declaring UK paid gite income, there are quite a few who don't[blink]

[busybee]

Thanks very much, it was because my pension is declared on the 2047 and then carried over to 2042, that I thought perhaps the same should be done for all money received into our UK account- in these days of bank 'transparency' one wonders whether eventually they will want to know everything! Because we move money from one account to another in the Uk to get better interest, and then to our a/c in France every so often, it probably looks like we are money laundering!

Overall I have found the French tax forms no more complicated than the UK ones, once you know which bits apply to you. Taxation is always a foreign language

busybee

[allanb]

[quote user="Ron Avery"]However, in this case, declaring it or not declaring  on the 2047 is not going to make any difference to the outcome after all the 2047 is only a calculation sheet, it could be entered as income from abroad on the 2047 and then carried over onto the 2042, but as long as its in the right box on the 2042  it will be correctly treated for tax.[/quote]

I agree that it doesn't matter in this case, but it isn't always so: if you have revenu exonéré on which foreign tax has been paid, it's the net amount which is required to be reported on 2042.  But they need the gross to calculate your revenu mondial, and the only place they will find it is on 2047.

Doesn't make much sense, in my opinion, but that's what the form says.

[Sunday Driver]

It's actually the net figure transferred to the 2042 which goes towards calculating your revenu mondial.

From the Notice to Form 2047:

Reportez le total de la col. 4 du tableau n° VII à la ligne 8TI de la déclaration de vos revenus. Les impôts et charges afférents à ces revenus sont pris en compte pour le calcul du taux effectif. C’est pourquoi, les revenus à reporter sur la déclaration n° 2042 doivent être nets de charges et d’impôt payé à l’étranger.

 

[allanb]

Of course SD is right.  My thanks to him, and my apologies to Ron.