Tax on capital in UK...boring

[tim_ironmonger]

I am sorry if this has been asked 1000s times before (I have searched on the archived threads)

The questions are as follows.

I would be living permanantly in France.

The capital raised from my house sale would be put into a building society account here in the uk, would I pay tax on this amount at source? or would I have to fill in a seperate French tax return.

I would not be working in France.

Sorry again if this is common knowledge, but I would rather check.

Thanks

[freddy]

You would be taxed by your bank in the UK at 20%, but the Inland Revenue would expect you to submit a Tax Return and your UK liability could be higher than this if the interest amount takes you well into the higher rate band (or lower if it is a smaller amount due to the banding structure). The French would also expect you to declare this worldwide income, and would tax you also if you declared it. You would however be able to offset your UK tax against your French liability under the Double Taxation Treaty, so effectively as French income tax is generally higher you will end up paying the French rate.

Another consideration is that it would form a part of your taxable wealth from the French point of view and if your worldwide declared wealth (with a few exceptions) is over EUR 720,000, you would be taxed again on some of the capital, rather than just the interest.

[0Helen]

>I am sorry if this has
>been asked 1000s times before
>(I have searched on the
>archived threads)
>
>The questions are as follows.
>
>I would be living permanantly in
>France.
>
>The capital raised from my house
>sale would be put into
>a building society account here
>in the uk, would I
>pay tax on this amount
>at source? or would I
>have to fill in a
>seperate French tax return.
>
>I would not be working in
>France.
>
>Sorry again if this is common
>knowledge, but I would rather
>check.
>
>Thanks

We have just been discussing this with an independant advisor. The best way seems to be to set up a trust. This also helps to avoid inheritance tax I feel the cost of paying for knowledgable advice is offset by the savings made, either now or in the future - not to mention peace of mind.
Cheers,
Pat