Tax - Exchange Rate

[Chas]

I heard yesterday that the exchange rate for tax this year is €1.4892/£1. Can anyone confirm this?

[Ron Avery]

The figure being quoted may be for all those brits with second homes in the UK so that they can calculate their wealth tax[Www].

The rate I use is the rate that I got when I received my income from the UK.  Some French tax offices issue a figure based on an average but it is not compulsory to use it.  If for example you took your money out of the hole in the wall and only got 1.43€ why should you pay tax on a higher amount?

 As long as you don't take the proverbial and can show evidence of your calculation should it be needed then use the rate of exchange that you actually got. 

[allanb]

[quote user="Ron Avery"]The rate I use is the rate that I got when I received my income from the UK.  Some French tax offices issue a figure based on an average but it is not compulsory to use it.  [/quote]I agree with Ron.  For instance, if your UK pension is paid into a euro bank account, then the income to be reported in France is simply the euros you received -- no need for any exchange calculation.  

Whether you would be entitled to use the "official" average rate, if it gave you a better result, is an interesting question.  I suspect that in practice either way would be accepted as long as you did it consistently from year to year.

[Owen]

Hello,

As far as I am aware if you receive income in sterling then the rate you use to convert into Euros for the purposes of a French tax return is that applying on 31 December. Not absolutely certain but I think the rate to use for the coming tax return is 1.4825.

Regards

Owen