Filling out my tax return - Idiot's Guide!

[RichardA]

Hi all,

I'm just tring to do my first french tax return as a French resident. [8-)]  I receive UK income from 3 sources: bank interest, rental income and a very small business activity carried out in the UK. So far I have forms 2042, 2047 and 3916.

I've searched the forum extensively, but found some mixed advice, so any help would be very much appreciated! What I would ideally like is for someone bright out there to tell me in which form and specific box any (or all!) of the following go in:

UK interest: Can someone please tell me exactly which boxes to write the relevant figures in. (This is received net of tax, but I know the official way to reclaim the UK tax paid).

UK rental income: Again, which form I need and which boxes to put the numbers in. This made a small loss this year after interest and costs. Does that make a difference?

UK business: Carried out and taxed in UK, but where would I declare the small profit on my French tax return?

Merci beaucoup en avance! [:)]

Richard

[Cassis]

Mixed advice because everyone writes from their own experience and it's not one size fits all, unfortunately.  Unless you can find someone here who knows the tax system inside out you may be better off asking your local tax office - they are usually very helpful and not intimidating once you talk to them!  Alternatively there are numerous services out here to help you fill in tax forms and advise on the system - you could try Vincent Grey at Club95 who offers a French tax return and advice service for about a hundred pounds/150 euros.  But you may strike lucky and find someone who can give sound advice for nothing.

Phil

[Gastines]

I presume you have the Pink form? Which is for any income recieved from outside of France.I believe thereis a box to suit all your seperate points.You should also have one fromUK  In Rev to giveto your tax office here.They send it to Paris then onto UK. This ensures that any income you get from  UK, excempt of tax, you have declared here. Just returned mine so expect a few nice letters from UK in about 2-3 months!!

Regards. B&B St.Malo      ourinns.org

[Ron Avery]

150€ a time!!!!!!

 Les Lauriers, Sunday Drive r and me should go into business[:-))].

I think the original poster is not really trying hard enough, I have no problem with helping those who have had a go and come to a  problem, we have all been there,  but I get the impression perhaps wrongly, that not a lot of effort has been put in to sorting this out for himself.  If that is not the case, Richard I apologise, but all the information for his  requirements on pensions, interest,  rent , income etc had been posted recently under two threads under Finance and just needs looking for and reading.

 If he has a specific question, other than I cannot speak French so how do I fill out my tax return?   I am sure people will be happy to help or he could try the French english speaking tax help line by E-mailing Mme Riboulet. 

[Ron Avery]

[quote user="Gastines"]

I presume you have the Pink form? Which is for any income recieved from outside of France.I believe thereis a box to suit all your seperate points.You should also have one fromUK  In Rev to giveto your tax office here.They send it to Paris then onto UK. This ensures that any income you get from  UK, excempt of tax, you have declared here. Just returned mine so expect a few nice letters from UK in about 2-3 months!!

Regards. B&B St.Malo      ourinns.org

[/quote]

Gastines I am sure you are trying to help but if I was looking at your post for help doing a tax return I  would be totally confused now.

The UK tax form as you call it is the double taxation indemnity form FD 5 and that is not part of the tax return process, it can be done at any time.  It has to be requested from the UK non residents department at Nottingham and as you say it enables the UK to repay tax paid in the UK after you have left the country and ensures that the future payments of pensions etc are made gross, But Richard said he already knew about that process.  the FD 5 does not help if your bank will not pay interest gross either. 

The "pink form"is the 2047 he already has, it is best not to describe tax forms by colours as they change, in 2003 the pink form was the 2042.!!

[Gastines]

I stand corrected.As Richard quoted .My FIRST tax return, I thought he may be unaware of the UK form. As someone once said," I'm leaving now and it may be some time before I return".

Regards.B&B St/Malo   ourinns.org

[RichardA]

I'm sorry if it appears as though I wasn't trying hard enough! I spent many hours last night going through multiple threads on the forum trying to find help on the subjects indicated. Whilst a lot it was all very helpful (and much of it from your goodself Ron! [:)] ), I was still a wee bit unsure as to exactly which column on the tax return to enter my figures, and as it's my first return I wanted to do it right! I apologise if it didn't come across that way...I do know I should pay my local tax office a visit, it's just finding the time...

Anyway, Gastines, many thanks for the info about form FD5, although I'd already found that, ready to fill in at some point in the near future!

Just to let you know I have been trying [;-)]  here's the conclusions I've come to so far! Please put me right if I've made any errors.

Official Euro/£ exchange rates for any date I've found are available here.

My best guess at entering UK interest would be on form 2047 (definitely pink this year!), section IV, part B: Column 1 = "Royaumi Uni". Column 5 'Total net collected in euros' = Gross amount of UK interest (or is it net UK interest after tax deducted??). Enter the total in box A and carry forwards to form 2042, section 2, box TS. Any UK tax on interest is to be claimed back with a UK personal allowance if applicable or IR form FD5.

I think form 2044 is only if you have French rental income? Therefore my UK rental income (actually a loss!) should therefore be declared in form 2047, section VII (carried forwards to form 2042 box TI). Column 4 = gross rent, column 5 = tax paid, and column 6 = my costs and interest payments.Is this correct?

I would also guess the small 'business' income would also be entered in form 2047, section VII, gross amount in column 4, tax + NI deductions in column 5.

The tricky bit of course is working out UK tax deducted as the UK/French tax years aren't very conveniently arranged to say the least! I know I could go and see an accountant, but his fees would probably wipe out my business' entire profit for the year!

Richard

[RichardA]

Well I'm getting there!

I've just received the following reply from infotax-southwest:

1.for a sole trader, with a permanent business in UK,
you have to fill in
form 2047 4 heading VII  to have the benefit in box TI
on form 2042 page 4 point 8 box TI
the benefit is not taxable in France, but you have to indicate it

2. for the house in UK
the rents are only taxable in UK,
you have to fill in form 2047 page 4 heading VII
and form 2042 heading 8 box TI
and  form 2047 page 1 heading III the country of origin

Richard

[RichardA]

[quote user="RichardA"]

My best guess at entering UK interest would be on form 2047 (definitely pink this year!), section IV, part B: Column 1 = "Royaumi Uni". Column 5 'Total net collected in euros' = Gross amount of UK interest (or is it net UK interest after tax deducted??). Enter the total in box A and carry forwards to form 2042, section 2, box TS. Any UK tax on interest is to be claimed back with a UK personal allowance if applicable or IR form FD5.

[/quote]

Please, before I finally fill in my tax return and send it off, is this the correct way to declare UK interest, and under column 5 'Total net collected in euros' do I enter gross or net UK interest?? [8-)]

Thanks, Richard

[Ron Avery]

Richard

Your understanding of the complertion of Form 2047 is the same as mine.  My understanding in column 5  is that that this can only be net if it has been taxed in the UK and you are not going to or are unable to claim it back as would be the case with an off shore 16% flat rate tax.  You would then show the tax paid in column 7.  If you receive interest gross from the UK or intend to claim back the tax then it should be the gross figure in column 5.  As you say this goes forward onto Form 2042 K into box TS on page 3 section 2.

You don't have to go through the FD 5 route every year if you are only needing to get the tax back on savings from the UK.  If you have already completed an FD 5 for your UK generated pay/pension AND the value of the savings interest is below your UK freepay (you do not have to declare UK pensions etc already taxed in France back to the UK),  you simply complete a Self Assessment for the UK and you get the tax paid back that way.  This is because the total of your income is only your savings interest and as that does not reach your free pay level you get all  the tax paid back.  This method of tax recovery is recommended by the Non-Residents tax office in Bootle.

[RichardA]

Thanks Ron, that's a great help. I'll try and compile something to stick in the FAQ for this section when I get time, as I'm sure others will be in the same situation each year.

Richard