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Bastet
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"and we have our reasons for choosing to continue paying tax in the UK.  Since there's a double taxation treaty, we don't have to pay tax on it here too

Not at all how it works, there is NO CHOICE.  For those who still belive that you can choose to pay tax in the UK and live in France, here is a message I received from  Inland Revenue Centre for Non Residents"

"I would advise that your do NOT have a choice in the country to which you must pay tax.  You will be liable to tax in your country of residence, and failure to apply for exemption from UK tax may result in your being liable in both countries"

Also if you are not tax resident in France you can look forward to a hefty French CGT bill deducted from the proceeds by the French Notaire if you sell your French house as they will not believe it is your only home if you pay tax in the UK (unless of course it is an army civil service type pension).

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Re-reading Mersons' posts, I think you'll find that they are tax resident in France because they've made several tax declarations here - as evidenced by the fact that they've had social charges applied to their foreign bank interest.  Their UK income would have been assessed for French tax, but their UK tax would have been credited against that under the UK France double taxation treaty. 

With regards to their house sale, their French tax status will be sufficient for them to qualify for exemption from CGT.

 

 

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Has anyone any information on this question please?

What is the position, in France if a person is resident, registered and taxed under the French system, if they are over retirement age (assume 65) and start a micro-enterprise?

They will be in receipt of a UK retirement and company pension and have the correct UK documentation re health cover etc and will join a mutuelle for health top up costs.

Are they still liable for social cotisations and at what level?

Obviously, they would be captured for French income tax on their global income, whatever its source or type. But how about other charges?

 

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I agree with Ron. If Les Mersons are living full time in France, even though for the moment they have escaped Income Tax in France they run a real risk that a new Fonctionaire will examine their file and levy French tax leaving them trying to reclaim the tax paid in the UK. Apart from the usual exceptions such as government pensions, rental income etc etc.  that must be taxed in the originating country, income tax should be paid in the country in which one is resident, its not a matter of choice.

For many  people the income tax liability is less in France than it would be in the UK.

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SD, I take your point about the tax returns, however people who have holiday homes in France and let them out make French income tax returns and that does not make them tax resident does it?  I posted about the choice thing as it still amazes me when people say we have chosen to pay tax in the UK or France, as there just is no choice.

It would appear that mistakes still happen and possibly the civil service pensions taxed in the UK clouds the issue and confuses a lot of tax functionary's in France, and that is how some people are allowed to pay tax in the UK that should not, but as BJ has said it is often better to pay tax in France than in the UK anyway, particularly if you are married and have children.

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Thanks for the comments and information.  Re Sunday Driver's comments, that's how we've always understood the situation.  The UK Inland Revenue know that we live in France and the french Inland Revenu know that all of our income is generated and taxed in the UK.  We've hidden nothing and have never been told that we must apply for exemption to UK tax.  Everyone's situation is different.  We've sent in a tax declaration every year and we've paid our quarterly cotisations for health cover based on our Revenue Fiscal de Reference.  As tax residents in France, with this being our only residence for the past five years, we're not liable for CGT.  

Sheila

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I am now very confused and don't know which applies to me, can anyone help please?!

I have been living in France for two years with my family. For the last 6 months I have been returning to the UK to work whilst my family remains in France. I have made a tax declaration for this year and as I hadn't earnt any money it was straight forward. I am currently paying UK tax and NI. For next year I was told to declare my UK income on my French tax return and then if I had to pay tax to pay it and claim back what I'd paid to the UK. What do I do about social cotistations? Are they generated from the tax return. Am I supposed to tell someone? We are in the system everywhere already. Basically who do I pay to? The UK are now paying the child benefit again. Do I pay to both ? Our health is still covered by the UK on a working E106 so if the health and child benefit are paid for by the UK would I not just pay the NI and not the soicial cotistations?? It is all rather confusing!

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Just to clarify my earlier post regarding the treatment of tax under the DTT, you declare your UK income in France and are assessed for French tax.  You obtain the credit for the UK tax paid by submitting a claim form to HMRC who will reimburse any tax paid, then amend your tax code to allow future income to be paid gross.

Pumpkin:

As explained earlier, if you hold an E106, then you do not pay social contributions on your UK earned income. 

 

 

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