tax problem!

[Roland]

Could anyone help with this question?

My wife and I have owned a property in France since 1991.  From 1993 onwards we have rented it out to English clients during the high season, but we mainly use it as a maison secondaire  that we use for our own holidays.  We pay taxe d'habitation and  fonciere plus water and other local taxes in France, but when we began renting it out we consulted a tax expert in the UK who told us that because of a tax treaty between England and France we could elect to pay tax on the rental to the UK authorities or the French authorities.  We chose the UK alternative, and have paid tax on the income on the property (such as it is, it isn't much) to the UK government.  However, there is now a new law in France that requires us to register the property.  When I rang the local tax office I was told that as the house was in France I was obliged to pay tax on the income to the French government.  When I pointed out that we already paid taxes in the UK I was told that tax was due in France as well!  Can anyone enlighten me on this?

[Pickles]

Assuming that you are UK resident, then you should declare and pay tax on the rental income (minus allowed deductions) in France. You then declare the whole income in the UK, get the usual allowances and can set off the tax paid in France against the UK tax liability.

Regards

Pickles

[Ron Avery]

Pickles is absolutely correct and the so called UK tax expert may just have cost you money.  The tax is due in France and it may well now have to be paid, you will have to claim the tax you have paid back from the UK if it is not too late. 

Unfortunately there are a lot of people out there, and down the pub over here who utter the sort of rubbish advice that you have been given, hope you can remember your tax expert's name because I would bill him if you end up out of pocket.

[Nick Trollope]

Is it a "new" law? I think that this system has been applied since well before 1993.