tax on uk rented home?

[Polremy]

help me please someone!
we live here in france and rent out our house in england.
rent is paid to mr polremy who has no other earnings in either country. paid no tax until now under the non-residence landlord scheme. our house agents have just forwarded a nasty letter asking for tax for 2002/3 tax year unless we can prove we were out of the united kingdom for less than 6 months (which we werent). as the amount earned was only around 4000 for the year - and thus less than his tax allowance - i presumed that no tax would be payable. is this right? please somebody tell me he IS still entitled to a tax allowance in the uk!!

[Liz]

Yes, he is entitled to the UK tax allowance. I suggest you take it up with the UK tax authorities to find out the procedure.

Liz (29)

[Bobdude]

It is probably because you didn't inform the Inland Revenue in advance before you left the UK (there are special forms to be filled in) We are in a similar position to you, and after we returned the forms the letting agent is allowed to send us the full rent without deducting tax, but we will still receive a taz return from the UK in France.

[Owen]

Hello,

I do not think you need to be too concerned. As long as you are straightforward in your dealings with the Inland Revenue over this matter it should be OK. At present they are simply exercising their right (almost unique to the Inland Revenue in the UK) that you are guilty until proved innocent ie; you have to prove that you are not liable for tax - they do not have to actually prove that you owe.

As lurcher21 said you should have filled in a couple of forms on becoming a non-resident of the UK. And I think your agent was negligent in not advising you of this as this law has been in effect since about 1995.

Under international agreement the UK will retain the right to tax any profits on the rental income. You still have to declare this income on your French tax return and because of the different tax years and what you can offset your profit figure will be different. But again because of the the double taxation agreement I would suggest there will be no tax to pay in France although I would emphasise that I am in no way qualified in tax matters.

Regards

Peter Owen
[email protected]

[Westoncromwell]

I note that under the 'double-tax agreement' with France that tax is paid for property held by a uk citizen in the Uk to the Inland Revenue.

However I understand that this income still has to be declared to the French Authorities. What is the reason for this declaration?

Do you have to pay social charges or 'national insurance' to the French Tax authorities on top of the UK tax that has been paid in the UK ? In the UK there is no levy of National Insurance on Rented Income but must this be paid in France and if so at what rate ? Anybody know ?

Thanks in advance