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Help with £ to Euro pay and tax issues


le shed
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    Dear All,

I am new here but it seemed a very useful source of info so I joined :)

I am moving to france in June to work 3 years for science lab in France but I will be seconded here, not full french emloyee. Basically it means I am in a complicated position (but not much different from a person on a UK £ pension I guess) that I get paid my salary in £ in the UK and the rest is up to me. I might be able to still retain NI contributions in UK though.

I think I understand the income tax and the parts. I have wife and child with one on way in september so am currently taxed on salary divided by 2.5 then 3 in Sept. (re multipled by parts).

my main issue is trying to work out what I will actually have disposable in france so I can budget! And the main focus of this is currently the Euro/£ rate. so my questions (which I have searched for  but not found difinitive answers are as follows)

1. Does the French tax return allow me to declare earnings / month therefore adjust for euro/£ rate as I go through the year, or will I be at the mercy to gain/lose at teh end of a year by picking one rate or the current rate.

2. Assuming the above is monthly I guess that I would pay tax on my total income that month regardless of it it was brought to France in euro at that current rate. Therefore having a fixed rate for tax porposes but the ability to transfer the actul funds at a more favourable time.

3. Is French income tax applicable to total gross salary or salary minus social security?

Appologies if this has been done to death.

Regards in advance,

Leigh

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1.  In France, tax is declared annually in arrears.  The official exchange rate is published for the previous year in time for the annual tax-return fest!. But it is quite legitimate to work out the rate which you actually got.  For instance, my gross income is paid into a French bank account and I just add up the total and declare that.  My o/h's income (pension, as mine is) is paid into the UK.  In this case, we just get cash out of a machine, and I then work out the average exchange rate for the year, based upon all the withdrawals which I made.  As long as you can prove the rate, you are OK.  But use the official one if in doubt.

2.  You pay tax annually in arrears, as said above, so it makes little difference.  Whenever you transfer the money, that is the rate you declare, unless you use the official rate.

3. Gross.

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Dear Cooperlola,

Many thanks for the time to reply. The answer to 1. is comforting.

Regarding to 2. I guess one would calculate the rate when transfered to france and any remining funds in the UK then get declared as savings.

I am happier now knowing that I can work my money out, many more questions to come though I guess.

Best regards

Leigh , future grenoblois

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You are welcome.

However, regarding 2.  No, you declare all your earnings for the year, but base the rate upon that which you got when you made any transfers.  Sorry if I misled you.

Welcome to the forum.  My only encounter with Grenoble was at the station on my way to meet some freinds in Autran.  I fell over, and when I looked up, three dishy Frenchmen had stopped to help me.  (I was a bit younger then....[:D])

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Dear cooperlooa,

I understand that I declare all income. I will most likely not transfer is all to france though so I expect I will declare that left in the UK based on rates at end of year.

grenoble the city itself does not seem to be the most aesthetic of places but the mountains make up for that :) :) Am looking forward to renting nice little house (currently in small flat in Oxford) giveing teh sprogs some garden to run about in and possibly even getting some chucks. :) life is on the up.

regards

leigh

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Just a quick clarification...

If you use the official exchange rate, then you just apply it to your total income for the year.

If you opt to use actual exchange rates, then you calculate the euro equivalent as of when you actually receive your income - in your case, it's the day it hits your UK bank account. 

What the rate was when you subsequently transferred the money to France is immaterial.

 

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