Live in France/work in UK. Tax position

[Kaf]

I'm sure variations of this question have come up before but I am totally confused. As I know there are many other families out there in the same position, I would be grateful for their experiences, please.

Our "foyer principal" is France; I live here permanently and our son goes to school here. My husband, however, works in the Uk. He pays UK tax and Nat ins and on that basis we get child benefit from the UK and E106 entitlement for healthcare.

Hubby is correctly taxed in the UK; he is there more than 183 days per year, all work is carried out in the UK and his employer is a UK company. While there, he rents accommodation.

Because our main home is in France, we are regarded also as residents for French tax purposes. We have no French income whatsoever.

Last year we went to the tax office and a very helpful man helped us fill out the required tax declarations; 2042 and 2047. Fine, no tax liability.

This year the tax office here in France are insisting that we do not have to fill in the 2047 (declaration of foreign earnings), that we declare all UK earnings which will be liable to French tax and that we claim back the tax paid in the UK. Surely the 2047 is required to say that the money was earned in the UK?

Can anyone with similar living/working arangements please let me know if this is the case. If so, where does that leave us with regard to our UK benefits? Are we still entitled to them or do we have to pay through the French system.?

Failing any advice available, can someone recommend a good English speaking accountant in 22?!

Hope to hear from someone who can help

Regards

Karen  

[Crevette]

Hi Karen,

Sorry no-one has posted back to you - same goes for a few posts of mine. I think there are lots of points to the french tax system which are very hard to understand - the same goes for french tax inspectors (I have had differing oppinions given).

I am a bit confused about your tax situation from the information you give - it sounds from your situation that they are now considering you to be fully resident in france for tax purposes. The rules of residency are not always quite so straight forward as the 183 days rule (this from both a PWC tax inspector).

Also it may be different because I would imagine you file a "joint" tax declaration and that "only half of you" is resident in the UK...

Anway, the obvious question to pose them is "why" - you can ask them by e-mail I think, if it would be easier.

For further info, there is a web site called "taxationweb" where you may be able to get further help. If not then I'm afraid you may need to contact a tax agency - although it will cost.

Good luck, (and sorry not to be more help),

-Rob-

[Ron Avery]

You are not going to get an answer on this site because your case is unusual and nobody is really qualified to advise you.

If your husband works in the UK, the best thing to do is for him to contact The Inland Revenue Centre for Non Residents in Nottingham, they advise on all double taxation issues and they must be advised of your situation otherwise you may find yourself being taxed in Frnce on the income you receive from your husband who has already paid tax on it in the UK.  The phone number is 0115 974 2135

or look at www.inlandrevenue.gov.uk  and do a search for "non residents"

[Will]

I agree - I for one would rather keep silent than give what might be misleading or incorrect information. Both the original question, and Crevette's situation, are outside the normal run of things and need qualified advice. Both people seem to have a pretty good grasp of taxation, I guess more so than most other forum users.

All I can say additionally is that because tax residency qualifications are different in France and UK it is possible to be tax resident in both countries simultaneously. While you cannot exactly choose where you are taxed, you can work this situation to your advantage with the help of a good specialist. My understanding of what normally happens in this situation is that you pay the tax in the country from where it originates and, for tax paid in UK, you notify this on the appropriate part of the French form. Any extra tax due on overseas earnings is then assessed by the French impôts.

I haven't heard of paying tax in one EU country and claiming it back in another, but that's not to say there aren't situations where this might apply. I have heard of French officials telling you the wrong things though...

[Kaf]

Hi

Thanks for the replies. I have already been in touch with the non residents section of Inland Revenue, but they can only tell us the Uk position, naturally.

Our situation isn't actually that unusual; I know that there are hundreds of families who have a partner working in the Uk but the family live in France. Presumably they have got things sorted.

Incidentally, I did discover that the double taxation regulations do not actually relate to salaries; they only concern investments, rents etc. Apparently there is provision for us to get a credit of UK tax if we have to pay any tax in France, but we have to apply for it.

We have to declare the earnings anyway, so we'll put it on the tax declaration as we did last year and see what happens. I did do the estimate of what our French tax payment would be if we do have to pay anything and it is minute compared to what we have to pay in the UK.

Karen

[Ron Avery]

"I have already been in touch with the non residents section of Inland Revenue, but they can only tell us the Uk position, naturally"

Not in my experience Karen, you should talk to Nottingham again, they certainly do know about what is taxable in the UK and what is taxable in France.   I found them really helpful, There are clear rules about this and they will yell you exactly what you should declare in the UK AND France.

Before you can claim back any tax paid in the UK on any income also taxed in France, you have to get the forms from Nottingham or their website, there is a French and English copy, and these have to be taken to and stamped by the French to show that you have declared the relevant income to them.  They then forward the forms to Nottingham and they authorise the payment of the UK tax paid back to you probably from their Bootle Office.

[Richardbk]

I would have thought that since your husband spend more time in the UK than in france that you should fill in the section TI on the back of the 2047 that relates to income not taxable and liable to CRDS. I.e the front page would be left blank, but if you yourself have any indirect earnings - e.g investments than the centre sections need to be filled out.

regs

Richard

[Me0wp00]

we're in the same situation and I'm fed up of going to the tax office to get it sorted out and them saying *just say no earnings in france*

My hubby is also in uk for more than 183 days, gets paid and pays ni and paye in uk. The tax office here *dept 36* sent me a reminder tax form, I went in with all his wage slips ready to declare everything, I explained I don't earn anything in France, hubby lives in uk and comes back for maybe 3-6 months of a year and pays his tax in the uk. They completed the form saying nil earnings and told me that the year he comes home for more than 183 days I have to declare his earnings as world wide income but not to bother until then.

However, I know this isn't strictly correct and so am quite prepared for them to come knocking again asking for back tax but I can only go there and offer to pay tax so many times.

[Kaf]

Yes, this was whay happened to us last year, although they did want us to declare hubby's earnings in the section at the back of the 2047.

This year they seem to have changed their minds.

They have at least decided now that we do need the 2047, which I knew all along , but the person I was dealing with kept insisting we didn't. I had downloaded a copy from the website and was going to fill that in, but they have now sent us an official one. Hopefully, they will also decide there is no tax to pay once they have all the details.

This is obviously a clear case of every official having their own interpretation of the law. I'm just going to make sure that I have copies of all rulings in writing, put the figures on the back of the 2047, including details of tax paid in Uk, and hope for the best. We have no non-earned income so it should be fairly straightforward to sort out once someone makes a decision! At least I know that if we have declared everything, we have done all we can to comply with the rules.

Karen

[Akakus]

Hi

My situation isn't so very different, except I'm single: I live in France but work in England, where I am taxed in the normal way (as I work for a British company but don't get around to going into the offfice much!). My problem, though, is this: I have been advised to fill in 2042 and 2047 and, though my French is good, am finding both forms impossible to understand: are you able to recommend a tax specialist or any on-line help? I'd be ever so grateful! Thanks!

[Chrisb]

We are in the same position, my husband commutes weekly to the UK. We have just filled in our tax-return for this year, and as it was our first, we asked for a hand to fill in what was required, and the 'Inspecteur Divisionnaire' duly obliged. ALL we did was fill in the first page of the 2042 with our names and address, number of children on page 2, how many at college etc on page 3, then his income roughly translated into euros in the box marked TI at point 8. (by roughly I mean he asked us and a couple of other people drifting by the office what we thought the exchange rate was, then gave hubby a calculator to work it out!) He then wrote in 'Autres reseignements etc' "Salaires percues en Angleterre (Income Tax)", we signed it, then he stamped and signed it and said 'all done'!!

I asked if he thought there would be any tax to pay, and he said not at all, we were covered by an agreement between France and the UK, and it didn't matter what his income was there would be no more to pay. At no time did he ask how many days my husband spent in France or anything like that - it was all completed in about 2 minutes, and he gave us a copy to follow for next year. I even admitted that we didn't fill in a return last year as we had only been here a few weeks, and hadn't had a Tax d'habitation bill this year and he just wagged his finger, said that we were very bad, then shrugged and said he hadn't heard what I had just said!!

I am just relieved that it was so straightforward!!

Chris