Tax on UK and French income?

[Hannah]

If we had income from a rental property in UK and also income from a gite in France, plus interest from savings, how would we be taxed? Would be able to get taxed in the UK on the UK rental income thereby using the better tax allowances there, and then be taxed on the rest in France? Or would it end up the same because we would have to pay the difference between the UK and French tax anyway, because the French tax is more?

I know we can get our UK income paid tax-free through the Inland Revenue then pay tax on it in France, but I think it will cost us more this way. Are there different ways of doing this to pay the least tax?

Can anyone help at all?

Thanks.

[martinetchris]

Hannah

Our suggestions would be :

1. Do a search on the LF site - there's been loads of discussions on just these subjects.

2. Buy "Taxation in France" published by Pannell Kerr Forster (Guernsey). It will answer all these questions and more besides - all for about 25 !

www.pkfguernsey.com/

From our experience, if you are French resident :

- you can't "choose" to pay tax on one kind of income in one country rather than the other - the respective tax regimes dictate which income you declare and/or pay tax on in which country.

The Double Taxation Treaty ensures you don't have to pay income tax on the same income twice (e.g. enabling you to state on your UK tax return that you haven't declared certain specified income as you're resident in France and the income is taxable in France).

However it doesn't cover French social contributions (10% above allowances) or CMU (8% above allowances)

- UK rental income is taxed in UK but not income taxed in France. However, it is taken into account in France in assessing your overall tax rate and in CMU contributions (but not social contributions). What expenses (e.g. mortgage interest) can be offset against income for French purposes can depend on whether the Uk property is furnished or unfurnished.

- French Gite income is taxed in France but not UK. It is also subject to French social contributions and is taken into account for CMU purposes also

Of course, we're not tax experts, so don't take our word for the above - others may well (will ?) have different views/experiences. At the end of the day, buy the book and get expert advice !

Good luck !

Chris and Martin