tax on uk property & double tax agreement

[Westoncromwell]

Am I correct in assuming that if you are a uk citizen residing in France and receiving rental income from the uk, then this income is taxed solely by the Inland Revenue (because of the double tax agreement) and the reason that it has to be declared to the French Tax Authorities is so that an assessment can be made on this uk income (after deduction of the uk tax already paid) as to what your cpam/national insurance contributions should be and this is levied at 8%.

Am I also correct in assuming that there is no furthersocial charge of 10% levied on this income as it is treated as being 'tax paid' in the uk?

Would appreciate any input,

thanks in advance

[Owen]

Hello,

You are getting a bit mixed up here. You are correct that the UK retains the right to tax your rental income.

You have to declare your gross UK rental income on your French tax return. In fact this rental income and allowable expenses is declared on a separate form (2044) to the main return in France. However in France the expenses you can offset against any rental income are slightly different than the UK and also there is a different tax year. Your profit is then entered on the main tax return. This figure along with other forms of revenue are then added up. From the gross figure certain allowances are deducted and can be quite generous. The net figure is the "revenu fiscal de reference". If you are affiliated to the CPAM under residence criteria (as opposed to E Forms or employment in France) then your financial contribution is calculated as 8% of the difference between a threshold, currently 6721 Euros, and the "revenu fiscal de reference".

The 10% charge to which you refer is CSG and CRDS which is levied on most forms of income in France. However it is not levied on UK rental income.

I have no hesitation in recommending you visit your local "Hotel des Impots". They may well have a member of staff who deals with the affairs of expats and I have found them extremely helpful.

Regards

Peter Owen
[email protected]