working out tax

[searcher30]

if someone lives in France for 6 years then back to the UK how does it work for tax? where do they do their declaration?

Thanks in advance

[Sunday Driver]

The general principle is, if you're resident in France, you pay tax in France.  If you return to the UK, you pay tax there. Naturally, there are some specific variations dependent upon your particular circumstances.

[searcher30]

My apologies,

the post should have read:

if you live 6 months in france and 6 months in uk where do you do tax return?

Do you have any advice on this?

 

Thanks in advance

[Sunday Driver]

It depends where you are domiciled for tax purposes.

Article 4 B of the French tax code, states that the following persons are deemed to be residents of France for tax purposes :

• any person who has his or her home or main abode in France; or

• any person who carries on a professional activity in France, whether as an employee or not, unless he or she proves that this activity is carried on therein incidentally; or

• any person whose centre of economic interest lies in France.

The Uk Inland Revenue states that you will be treated as resident for a tax year if

• you are in the United Kingdom for 183 days or more in the tax year, or
• you visit the United Kingdom regularly and your visits average 91 days or more a tax year over a period not exceeding 4 years, or
• you come to the UK for a purpose that will mean you are in the UK for at least two years.

It looks like France has first call on you.  You'll also need restrict your UK visit to less than 183 days.

[Will]

It's perfectly possible to be tax resident in more than one country at the same time, and it may well be to your advantage, particularly if you are working, to make sure you are in Britain for the magic 183 days in order to avoid high social charges in France. You declare in both counties, but are only taxed once on any particular item.

[Ron Avery]

[quote user="Will the Conqueror"]It's perfectly possible to be tax resident in more than one country at the same time, and it may well be to your advantage, particularly if you are working, to make sure you are in Britain for the magic 183 days in order to avoid high social charges in France. You declare in both counties, but are only taxed once on any particular item.[/quote]

Will I didn't think  you can be tax resident in two countries, well not according to what I received from HM Income tax.when I moved here.

"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"

So to me that says if you are in France +183 days then that is your country of residence, same for the UK.  However if you have income like rent etc generated in another country it must be declared in that country and you must have exemption from tax in the UK or France,  as appropriate,  so as not to get taxed in BOTH countries.  I think the important point is that you cannot play ducks and drakes and be tax resident nowhere!!

[Will]

Not entirely so Ron, though you are right in essence. Different countries have different residence qualifications. You can easily be French tax resident by virtue of your main home or your family being in France, but be UK tax resident if you spend more than 183 days there. You can be either 'resident' or 'ordinarily resident' according to UK taxation guidelines and can often arrange things so you meet the most tax-efficient criteria.

"Residence in both the UK and another country (from IR20, HMRC)
1.4 It is possible to be resident (or ordinarily resident) in both the UK and some other country (or countries) at the same time. If you are resident (or ordinarily resident) in another country, this does not mean that you cannot also be resident (or ordinarily resident) in the UK. "

As there is a double taxation agreement between Britain and France you will avoid being taxed in both countries on the same item, but still have to declare, and possibly pay, tax in each country. Domicile is a different matter, and you don't have a choice, at least as far as UK is concerned. If you do intend to work the system in this way you need the advice of a good accountant of course because it can get complicated. UK publication IR20, see http://www.hmrc.gov.uk/pdfs/ir20.htm, tells you a lot more.

Dual residence won't be relevant to many people, such as those who do not work, but for somebody who, for example, has his main home in France, where his family lives and he spends a lot of time, but whose work is self-employed and UK-based, it can make a lot of sense. By meeting UK tax residence qualifications then he will pay tax and NI in UK, will qualify for E109 for dependents, and will avoid the very heavy French social charges.

Mrs Conq worked for the Inland Revenue (as it was then), training tax staff in London before moving to France.

[Sunday Driver]

[quote user="Will the Conqueror"]

Mrs Conq worked for the Inland Revenue (as it was then), training tax staff in London before moving to France.

[/quote]

Insider information. [;)]