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what to declare on tax form


Llantony

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We have yet to complete our first tax return in France.  An English acquaintance (who certainly has a lot more money) says we'd be stupid to declare UK savings accounts as 'They'll never find out'.  Just declare bank account interest and don't mention building society account, bonds etc. (if we get some).  He reckons ISAs don't need to be mentioned anyway but I'd have thought the interest is income and if we aren't in the British tax system they aren't tax free.

Of course we don't enjoy paying tax on our already dwindling funds, but we have never had the choice before, our earnings were taxed at source - as is OH's pension now we are retired. I'm a bit of a wuss about doing something potentially illegal.

The way the exchange rate has gone, I wish we'd put money into a Livret A in France but it doesn't seem a great idea now and the pound has been going down ever since we arrived last summer!

 

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Having a lot more money than you doesn't make your English acquintance any less stupid than he is.

He's clearly unaware of the recent EU Savings Tax Directive which requires that financial institutions report to the local tax authorities information relating to accounts and investments that generate savings income which are held by individuals who are not resident in the country where the account or investment is based.  This information is then passed to the tax authorities of the individual's country of residence who can then compare the information received to the information declared on the individual's tax return..... 

 

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Hi!

I confirm what sunday Driver wrote.

France has just increased the penalties for not declaring:

  Utilisation de comptes à l'étranger

Actuellement vous êtes tenu de déclarer, sur votre déclaration de

revenus ou de résultats, les références des comptes ouverts, utilisés

ou clos à l'étranger. Le défaut de déclaration est sanctionné d'une

amende de 750 € par compte non déclaré et les sommes qui y sont versées

ou prélevées sont présumées constituer des revenus dissimulés.

Pour améliorer ce dispositif, le projet propose d'augmenter le montant de l'amende de 750 € à 1 500 €.

Lorsque les actifs sont situés dans un Etat ou territoire qui n'est pas

coopératif en matière d'échange de données fiscales et bancaires, le

montant de l'amende pourrait être porté à 5 000 € et le délai de prescription du non-respect de l'obligation déclarative serait allongé de 3 ans à 6 ans.

Yours,

giantpanda

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I can only agree with all that has been stated above.

I think the way to look at this is - Would you knowingly try to defraud the UK tax authorities???

I the answer is No, then why on earth would you even contemplate trying to defraud the French authorities ....

If the answer is Yes, then you deserve all you get when the walls come crashing down around you (That may sound a bit harsh, but it amazes me that any otherwise upstanding citizen would even consider this option)

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Some are reluctant to declare because they imagine that the French authorities want to know your capital wealth. In fact, all other things being equal, it's the interest earned that they want to know. If you fall under the minimum (about €11k - €12k), and depending on circumstances, you won't have anything to pay anyway.

Then you'll be legal and can rest easy.

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[quote user="Nell"]...it amazes me that any otherwise upstanding citizen would even consider this option...[/quote]

How do you know that he's "otherwise upstanding"?  If he's the sort of person who contemplates tax evasion, he probably parks on double yellow lines as well. 

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Hi Llantony,

I'm afraid that it is your friend who is doing something stupid, as he will get caught and he will get penalised. As stated above, we now have the EU savings directive, which basically means all countries within the EU (and some countries not in the EU) now share all information. This includes bank accounts, savings etc. You are duty bound by law to declare your worldwide assets no matter where they are in the world; whether taxable or not, thus by leaving off any assets / income, you are indeed breaking the law in your new host country. ISAs are taxable in France as the French do not recognise their tax free status, no more than the British fiscal authorities would recognise a PEA (the French equivalent). If you arrived in 2008, then your first return should be put in by the end of May this year. You will not be sent one, you must go and get it, or download it from the government tax website www.impots.gouv.fr

There are places that you can put money that are in Sterling and are tax efficient in France, switching into Euros when you wish, so missing the ‘livret A’ boat is not a problem.
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I am not and will never be an angel and the thrust of this post is very similar to others I posted elsewhere.

'If you go into a shop and the shopkeeper gives you change of £20 and you only give her £10 and you knew that and yet accepted the change who is guilty in this.  The shopkeeper who has genuinely made a mistake or those who recognise the mistake and do not volunteer as much and benefit'

Once your mind is taking you down this route then you face problems.  You could and possibly would get away with it but seriously I have seen people going to prison for defrauding people and if you defraud either HMG or the 5th Republique then you stand a chance of being potted.

I say all of this as a lawyer but for balance would point everyone in the direction of the Ken Dodd case when the defence was that my client has never ever believed in banks and this was years ago!!!!!!

Of course it was at Liverpool Crown Court and in front of a home jury.

It is pointless to take risks for banged up 23 hours a day I tell you (not from personal experience but from clients experience) not pleasant.

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I'm not a he and I don't knowingly break laws and never park on double yellows! 

I was quite upset to be shouted at and told I know nothing about money if I declare everything. Just posted hoping to confirm that not mentioning any income was a bad idea.

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[quote user="allanb"][quote user="Nell"]...it amazes me that any otherwise upstanding citizen would even consider this option...[/quote]
How do you know that he's "otherwise upstanding"?  If he's the sort of person who contemplates tax evasion, he probably parks on double yellow lines as well. 
[/quote]

See I knew you were a fine upstanding citizen Madame Llantony [:D] 

I have just re-read my posting as you seem upset at some replies. Sorry if you took my post personally - I was speaking Generally and trying (albeit not very well) to say that as general law abiding people, I don't understand why some then try to evade their taxes. [:-))]

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So easy, when posting, to give the wrong impression.  I meant I was upset by the friend (he of course has completely forgotten that he shouted at me and has no idea he made me feel upset and depressed) who said it was idiotic to declare everything - in his case to his French accountant.  He will probably get away with it because he is cleverer than me - at arranging finances, putting money into bonds or whatever.  Never having had spare money before and now living on a small pension with a bit of money in UK accounts, I' ve not had the practice. 

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I have had a query from the Impots regarding the amount of interest the Nationwide reported and the amount I declared. It was a small error on my part and was painlessly resolved but it shows that UK banks do report - whether in all cases or just at random I don't know but I personally would not recommend taking the risk.
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[quote user="Nell"]

[quote user="allanb"][quote user="Nell[/quote]

 I was speaking Generally and trying (albeit not very well) to say that as general law abiding people, I don't understand why some then try to evade their taxes. [:-))]

[/quote]

I think that I understand, would you like me to explain why they try? [:D]

After that flippant comment it is definitely time for bed followed by une grasse matinée

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[quote user="Nell"]

[quote user="allanb"][quote user="Nell"]...it amazes me that any otherwise upstanding citizen would even consider this option...[/quote]

How do you know that he's "otherwise upstanding"?  If he's the sort of person who contemplates tax evasion, he probably parks on double yellow lines as well. 

[/quote]

See I knew you were a fine upstanding citizen Madame Llantony [:D] 

I have just re-read my posting as you seem upset at some replies. Sorry if you took my post personally - I was speaking Generally and trying (albeit not very well) to say that as general law abiding people, I don't understand why some then try to evade their taxes. [:-))]

[/quote]

Hi,

   On reading this thread I am struck by the way people confuse sensible financial management to(legally) minimise one's tax liability with (fraudulent) tax evasion.

Anyone subject to a tax regime (particularly one so shambolic and full of holes as the french one) who does not make themselves aware of all the (legal) allowances and exclusions is not acting virtuously, but against their own best interests.

    Those who "declare everything" for example may be unaware that there are many forms of income which are exonerated from tax, and do not even have to be shown on the declaration , among these are : sums resulting from the sale of shares or parts of investment trusts etc. including all capital gains up to a total of 25730€ p.a.;overtime payments as defined in regulations;invalidity pensions paid to victims of work accidents; military invalidity pensions;war widow's pensions;allowances paid to handicapped persons;pensions awarded to victims by the courts-ie to road accident victims;rent received for part of your principal residence (eg b&b) not exceeding 760€ p.a. --or if it is the principal residence of the tenant, not more than118€ per m2 p.a..

     I have only listed some of the exonerations most likely to apply to french residents of UK origin, and have ommited the myriad exemptions mainly applicable to french nationals.I have also not gone into the many was legitimately to reduce your tax bill--donations to associations, employing people on CESU, etc.

    Making yourself aware and benefitting (legally) is not a disreputable pursuit, but plain common sense.     

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What I find startling is the amount of people who are determined to take their financial matters into their own hands. I come across people who are stunned when I tell them I paid to get professional advice. Nell has just made it painfully clear that tax in France is a highly complex subject and it is in a foreign language to boot! Usually the people who have done it by themselves don’t even speak French and struggle to get through to save a few pennies on the advice. However, it all goes horribly wrong when they get a fine from the fisc or they find that they have been overpaying for years and that they cannot claim it back (at least not over three years).

It is well worth speaking to a French accountant or suitably qualified financial adviser, at least for the first return, to be sure you have set out your stall correctly and then in subsequent years you can do it by yourself feeling comfortable. My financial adviser helped me with my first few returns for free (as I invested some money with him). I do my tax returns on my own now as I have got used to it, but he is always there if I have any questions, thus I am totally relaxed about my tax declaration.

Forums, such as these, can be helpful, with good information, but I have seen so much misinformation too, that could lead people into serious trouble. There are many English speaking professionals out there who can help, so there is little excuse for getting it wrong.

Kate
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I don't like to disagree with a first time poster but I just can't keep quiet on this occasion.

Not everybody's tax affairs are complicated and, contrary to what you say, lots of people on the forum are perfectly capable of reading and understanding what's required.

Pay a professional, by all means, if you feel happier about it.  And, BTW, not everybody does it themselves in order to "save a few pennies on advice".

Some of us do it because we want to get to grips with the challenge of submitting a first tax form and the sense of satisfaction in accomplishing the task is very great indeed.  At least, that was the case for me.

Now, if there's something I really can't do, I'd be more than happy to pass it on and to pay someone else to do it.  And I'm not just talking about dealing with one's own financial affairs; that also applies to many, many tasks that people here on the forum have tackled for the first time in their lives (roofing houses, using a ride-on mower, cooking their first rabbit, whatever) and it's an enjoyable (mostly pleasurable) learning curve and enriches one's experience of living in France.

Please don't let me put you off posting further but I did think your post was just a little bit patronising.  If I have read it in the wrong way, then of course you must ignore me and put it down to my grumpy mood on a wet and miserable Sunday afternoon.

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Hmm.  Well, I did use an accountant when I first came here, for just that reason.  I wanted to do it correctly and doubted my own ability (not to understand the language, but the tax implications) to fill the form in.  That was before I used this forum or any other like it.  Looking back and having now done the tax return myself, I think I probably threw money away as we have just two pensions and a tiny bit of interest from a building society current account. It takes me about 10 minutes to do our tax return.  For this I used to pay 300+ euros.  Now, I know that the accountant took all the liabilities for any errors of advice etc, so I don't think I was being ripped off or anything. However I do think there is less need to be scared of doing this yourself if you tax is relatively uncomplicated and your French of reasonable standard.  Added to which, the staff at the Impots can be really helpful.

Each to their own, I say, according to their circumstances.  With exchange rates being what they are, I simply can't afford to pay to have my hand held any more.

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Coops, after you kindly gave me the name of your accountant, I was quite happy to have given her our stuff to sort out.

Then, after reading more around the subject and asking many questions on this very forum, I felt I could give it a go myself.

Also, we arrived on 1 April (April Fool? Never!) so we had practically a whole year to learn about things and just get a grip.

Our affairs were simple and they wouldn't have challenged a bright(ish) 10-year old.  Plus, SD was on hand and I gleaned all that I needed.

It was such a proud moment when the avis came back and then the Contributions Sociales demand and I felt like a cat who had had the cream.

The feeling of self-satifaction and elation was worth it all.  Won't say I just dashed it all off, especially the viager (spelling?) bit but, all in all, it was a positive experience and I'm looking forward (almost) to submitting our second return!

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[quote user="cooperlola"] Well, I did use an accountant when I first came here, for just that reason.  I wanted to do it correctly and doubted my own ability (not to understand the language, but the tax implications) to fill the form in.  That was before I used this forum or any other like it.  Looking back and having now done the tax return myself, I think I probably threw money away as we have just two pensions and a tiny bit of interest from a building society current account. It takes me about 10 minutes to do our tax return.  For this I used to pay 300+ euros.  Now, I know that the accountant took all the liabilities for any errors of advice etc, so I don't think I was being ripped off or anything. However I do think there is less need to be scared of doing this yourself if you tax is relatively uncomplicated and your French of reasonable standard.  Added to which, the staff at the Impots can be really helpful.

Each to their own, I say, according to their circumstances.  With exchange rates being what they are, I simply can't afford to pay to have my hand held any more.

[/quote]

Hi,

    I agree absolutely, the average retiree has a perfectly straightforward tax situation, and with a bit of advice for  the first time,  and most importantly keeping full records during the year,

they can do their own declaration in 30 minutes.  As  for accountants, I have personally completed in 20 minutes very simple declarations for friends who were previously paying an "accountant" £250-£300. I know they have to make a living, but surely that is exorbitent

   As cooperlola says thestaff at the "impots" are generally helpful, and no one is going to be penalised if they make honest mistakes. Get a copy of the "Charte du Contribuable" which sets out their approach.

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