Tax on Gite Income

[mcclom70]

What is the UK and French tax position regarding the income from a gite, I currently live, work and pay tax in the UK?

Do I have to register with anyone in France before renting the Gite?

[trishg]

I was aware that I needed to register with the French tax authorities but had problems finding out how to get into the French tax system. The income also has to be declared in UK although tax deducted in France will be allowable against UK tax bill.

I have now found a UK accountant specialising in French tax affairs, and registered in France. They have sent very helpful booklet and I will be using them to sort out 1st year and to make sure I am registered with all I need to be. After that I am hoping to be able to cope alone as I have a lot of experience with keeping accounts.

While you are getting it sorted out make sure you keep records and receipts for everything. It also helps to keep separate bank account(s) for dealing with lettings.

[Liz]

You should contact the Centre des Impots des Non-Residents, 9 Rue d'Uzes, 75094, Paris CEDEX 02. They will send you the necessary form for declaration. No need to tell them in advance as the return is done annually in arrears; the tax year runs from January.

[Adrian]

This has been raised many times before but briefly...

If it's just straight gite income and you are domiciled in the UK then it is remarkably easy and you don't need an accountant. To get the forms either write to the tax office (address as posted by Liz) or use the link below. If you write you will get two copies of both forms - only one needs completing, the other is for your records to save you the photocopying (helpful lot, aren't they!) If you download them print out two, so that you can keep one for yourself:

http://www2.finances.gouv.fr/formulaires/DGI/2002/2042/tch2042.htm

The main "gateway" to the site is available in English at
http://www.service-public.fr/etranger/english.html

The tax position is very straightforward for small gite businesses. You are taxed at 25% on 50% of your income (i.e. 12.5% of the gross). You cannot offset anything against this tax - expenses are allowed for in the 50% of your income which is not taxed. Therefore all they want to know is how much you earned from the rentals.

The cerfa forms you need are 2042 and 2042c. You can ignore any other forms you may get sent. Unlike UK self assessment forms they take no more than 5 minutes to complete!

Form 2042

Page 1
Fill out sections 1 - 4 (name, address, DoB, spouse, signature, etc).

Page 2
Tick whichever applies (married or single) at Section A

Ignore the rest of this form.


Form 2042c

Page 1
Fill out name and address and sign at the top of page
Fill out address of French property at section 5

Page 2
Enter total amount of income at section B in...
box KO if income to be registered in your name
box LO if income to be registered in your spouse's name

Ignore the rest of this form

Send both forms to the Paris address at the top of page 1 on Form 2042

Job done!

You will get a notice telling you how much (if anything) you owe sometime after July. Due to the civil service strikes this summer they are very behind and we haven't had ours yet. If the amount you owe is below 300 they will waive it as it costs more to collect than that! Now's there's a first for a tax office!

Adrian

[mcclom70]

Thank you all very much for your information.

Do the tax rules change if the GITE income is paid in Sterling by UK Holidaymakers to a UK Bank Account?

[Musicmonkey<ADDRESS><STRONG>Musicmonkey<STRONG><ADDRESS>]

I am confused by this. When I contacted the UK tax authorities I was advised that as I am domiciled in the UK any tax from property abroad must be paid in the UK. The thread suggests the tax should be paid in France.

If the income is declared in both Countries how do you avoid paying tax in both jurisdictions? (There are supposed to be laws to prevent this.)

Does anyone have a definitive answer on this one?