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Declaring UK rental income as French tax resident


skywalker

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Hello,

I'm hoping someone can guide me here.

Currently resident in France and working here paying my taxes.

I'm also renting out my UK property and declared this to HMRC last year as I always do. I now need to fill out my French tax return to declare the 2016 UK rental income. I'm a little confused with form 2047 and the field 8TK.

As per the below figures, do I just need to enter £3,389 converted to € ?

Rental income: £10,744

Profit after deduction of expenses: £3,389

Personal allowance: £10,600

Thanks!
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[quote user="Patf"]I don't know if furnished makes any difference.

I was just going to add that I don't think there's anywhere you can put your UK personal allowance on the french tax form.

[/quote]

Hi,

    See this;

https://www.french-property.com/guides/france/working-in-france/letting-property/taxation/furnished-accomodation/

This deals with french lets , but you can declare like this , although you will finally be exempt; or to keep it simple you could declare as unfurnished , if the gross rent is less than 15000€.

Your UK personal allowance is not relevant in France.

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Unless you are affiliated to an accredited accountancy body or accountant (centre de gestion et associations agréés/expert comptable agréés) the tax authority will increase your reported gross income by 25% for the purposes of assessing your liability to income tax. A tax reduction of €915 is available if you are affiliated.

 

What is that all about? [8-)]

 

Do they assume that you are taking 25% on the black or am I missing something?

 

Why would you need an expert comptable at several thousand Euros for a regime with a fixed abattement where all you declare is your chiffre d'affaires?

 

I must be missing something or has the rag got it wrong?

 

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The idea of the International Tax Treaty of which the UK and France are members is that if you pay tax in one country on something you can't pay in another.

You can pay tax on your rental income in the UK and then you don't have to pay tax on it in France. I believe in France you will still have to declare as a global income for social charges which you will more than likely have to pay either way round but they can't charge you tax. To prove you have paid the tax in the UK you should ask HMRC for P60 or whatever it is called or any other proof like your UK tax form/bill.

Seems to me your making a lot of work for yourself.

Tax allowances are only for the country in which you are paying the tax so if you decide to declare the income in France then only the French tax allowance will apply. If you decide to pay tax in the UK on this income then the UK tax allowance will apply.

If you really are still unsure then see and expert (accountant).
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Well at least the last sentence of CT's post is accurate. Sadly much of the rest is inaccurate or suggestive of things that are not in fact correct.

This shows the dangers of relying on boards for legal information (which includes taxation). There are many self appointed experts. I would exclude Parsnips from this since his knowledge and understanding is close to encyclopaedic.

But as CT states, if you are still unsure then consult an accountant - one with French/UK taxation experience and not the local high street man.
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This is gives some explanation of the 25% increase and the 915 Euros reduction.

http://www.amarrim.fr/expert-comptable-immobilier/ladhesion-a-un-centre-de-gestion-agree/

I think the answer to Chance'rs question is Yes they do assume the accounts will be wrong unless prepared by an upstanding professional. Perhaps PWC might be available...........

PS The real reason for the increase , is that up until 2006 there was a discount if your accounts were prepared by a professional. When the law was reformed, they abolished the discount, but reintroduced the incentive t use an accountant the saving by increasing the tax if you didn't use a professional.

The 915 Euros deduction is an allowance towards the cost of the accountant. The allowance is a 2/3rds of the cost of the accountant, with a maximum deduction of 915 Euros.

Very French!
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I think the article must be wrong (no surprise there) it says that as a micro-bic declaring locations meublées non pro that it will be majorised by 25% unless you join one of the agreed accountancy bodies but to do that they say you must renounce the micro-bic system, now that makes sense because they will have no books to audit and a micro-bic does not need to submit accounts.

 

In any case I have not had any majorations declaring under micro-bic for the last 3 years.

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No I think it says that in order to " benefit" from this arrangement you have to give up on micro-bic. It suggests that most people would want to do so anyway so as to benefit from actual deduction of expenses.

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Those famous words again - "Well they would ,(say that) wouldn't they!" [:D]

 

My costs are 13%, falling year on year as I get more direct repeat bookings (down from 18%) and I get an abattement of 71% leaving me imposable on 29%

 

I dont need an expert (comptable) to tell me that I dont need an expert [:)] even though they try (and fail) to convince me that I would benefit from their services.

 

Article is wrong though, there is no 25% majoration on revenues declared under micro-BIC.

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"I think" is not "I know" and there is a lot of "I think" in these posts so if I was the OP I would go see a professional because nobody here knows what they are talking about as can be seen by all the contradictions.

What your seeing is their personal interpretations of what they have read yet none of them have any French professional accountancy qualifications. Not to mention if they tell you wrong it's a bit difficult to say some bloke on a forum told me to do this even more difficult to sue them for wrong information.

Personally I would just pay tax on the rental in the UK and use my personal tax allowance there and keep quite with regards to the French tax authority.

PS. Andy go look it up, your wrong and I am right yet again.
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OK since you insist CT.

you wrote:

The idea of the International Tax Treaty of which the UK and France are members is that if you pay tax in one country on something you can't pay in another.

There is no international tax treaty. There is a series of bilateral double taxation treaties. That is not the same thing.

If you do not believe me (and I am sure that you won't) I suggest you look at the DDT between the UK and France and compare it with the DDT between France and Germany. Both are likely to be of interest to yourself and your family - just as they have been to me and mine. I urge you to take the French versions of both to avoid any possible translation issues. You will find areas of similarity, you will find common areas and you will find complete differences.

There is no international treaty however.

You also wrote:

If you decide to pay tax in the UK on this income then the UK tax allowance will apply.

To remain legal, there is no decision or choice (and I think you have been told this by others in previous posts on taxation, but you continue to ignore the advice). The DDT between the UK and France specifically tells you where tax has to be paid - viz. the country where the property is located. In the OP's case this is the UK. No choice - except to try and avoid paying any tax at all.

Edited to add, but you are right that the income also has to be declared again in France and will potentially impact on the French taxes to be paid.
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You really need to keep up with whats going on.

It's now called the "Multilateral Convention (MLC) on Mutual Administrative Assistance in Tax Matters" which will soon be superseded by a bilateral EU agreement and is an agreement between OECD member countries. Have a look on the HMRC website for more details.

I may not be an expert in such matters which is why I say go see one but then neither are you so don't try and muddy the waters by pretending to be one.
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Chancer , I agree that the article fails to make clear that the 25% addition only applies once you either volunteer for benefices real or cease to qualify for micro-bic as a result of revenue exceeding the 82,800 ceiling.
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CT

I think we have been discussing at cross purposes.

The multilateral convention relates to exchange of data on tax payers and residents between different countries.

The Double taxation treaties relate to the rules that two countries apply when there are issues of cross border taxation. MLC does not replace the DTT it is complementary to it and facilitates the checking of tax declarations.

So in the OP's case the DTT defines that his rental income from a UK property falls under UK tax regulation. The MLC allows the French to check with the UK that such tax as is due has been paid in the UK.

None of which actually helps the OP so let's leave it there.
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