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Unusual tax question.


vette

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We bought a house and came to live in France in 2006.

I went to the tax office and filled out the neccessary forms but as my main income is a Government pension I paid no tax here due to the double taxation treaty.

After 18 months, I returned to work in the UK whilst the girls stayed in France, my only house was and still is the one in France. Whilst in the UK I stayed in various rented rooms as in house sharing. I came to France every third weekend for the following 5 years but in the first year, after visiting the tax office, I was told that as I was in the UK more than France it wasn't neccessary to complete a tax form. My good lady has continued to complete her own tax forms since being here.

I have now re-retired and have a couple of Government pensions plus a couple of normal company pensions all taxed in the UK. Presumably, as my primary income is still one of the Government pensions the whole lot will remain under the double taxation treaty.

My question is this, will the first 18 months that I was tax resident here count towards not having to pay CGT if we sell up, or will I have to start afresh. There is also a part of me saying that the info' I was given by the tax lady might not have been correct as my main and only home was still in France.

Not the normal sort of question I suppose, but if anyone can shed some light I would be very grateful.

P.S. I havn't been back to the tax office as yet but will in due course.

 

Regards. Les.

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[quote user="vette"]

We bought a house and came to live in France in 2006.

I went to the tax office and filled out the neccessary forms but as my main income is a Government pension I paid no tax here due to the double taxation treaty.

After 18 months, I returned to work in the UK whilst the girls stayed in France, my only house was and still is the one in France. Whilst in the UK I stayed in various rented rooms as in house sharing. I came to France every third weekend for the following 5 years but in the first year, after visiting the tax office, I was told that as I was in the UK more than France it wasn't neccessary to complete a tax form. My good lady has continued to complete her own tax forms since being here.

I have now re-retired and have a couple of Government pensions plus a couple of normal company pensions all taxed in the UK. Presumably, as my primary income is still one of the Government pensions the whole lot will remain under the double taxation treaty.

My question is this, will the first 18 months that I was tax resident here count towards not having to pay CGT if we sell up, or will I have to start afresh. There is also a part of me saying that the info' I was given by the tax lady might not have been correct as my main and only home was still in France.

Not the normal sort of question I suppose, but if anyone can shed some light I would be very grateful.

P.S. I havn't been back to the tax office as yet but will in due course.

 

Regards. Les.

[/quote]

 Hi, As has been said - no CGT on principal residence ; nor, if you should leave France, within certain limits ; see here, extract from CGI article 150U;

2° Au titre de la cession d'un logement situé en France lorsque le

cédant est une personne physique, non résidente de France,

ressortissante d'un Etat membre de l'Union européenne ou d'un autre Etat

partie à l'accord sur l'Espace économique européen ayant conclu avec la

France une convention d'assistance administrative en vue de lutter

contre la fraude et l'évasion fiscales et à la condition qu'il ait été

fiscalement domicilié en France de manière continue pendant au moins

deux ans à un moment quelconque antérieurement à la cession.

L'exonération mentionnée au premier alinéa du présent 2°

s'applique, dans la limite d'une résidence par contribuable et de 150

000 € de plus-value nette imposable, aux cessions réalisées :

a) Au plus tard le 31 décembre de la cinquième année suivant

celle du transfert par le cédant de son domicile fiscal hors de France ;

b) Sans condition de délai, lorsque le cédant a la libre

disposition du bien au moins depuis le 1er janvier de l'année précédant

celle de la cession ;

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Your government pensions will continue to be taxed in the UK, but your other pensions (UK state, company pensions) should be taxed in France. The double tax treaty has changed since 2006, so you need to be aware that you may pay tax in France, but will be credited for the amount of French tax that would have been due on the government pension amounts. Also, to ensure that you are not taxed at source on UK state and company pensions (i.e. have the wrong tax code) you need to complete a "France Individual" form. This must be stamped by the French tax office when you submit your French tax return and sent back to the appropriate UK tax office.

http://www.hmrc.gov.uk/cnr/france-individual.pdf

The deadline for completing paper tax returns is 20th May.

You should complete a tax return as a household, not as separate individuals, if you are married or in a civil partnership.
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Thank you for the advice folks.

Yes, the house is my main and only residence and has been since our  move here in 2006.

I will go and brave the tax lady. At least if it's the same one, she is very helpful.

 

Regards. Les.

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It is probably also worth completing form P85 for the UK tax man to state when you formally moved to France and ceased to be a UK tax resident (possibly when you retired?) So that all the dates and claims match up

http://www.hmrc.gov.uk/cnr/p85.pdf

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After speaking to the UK taxman, I found out that now I don't pay higher rate tax anymore, my new tax liability is just £3.08 per week.

Probably the only perk of having a tax free pension due to being injured in the line of duty.

I'm sure that will raise an eyebrow with the French tax lady. 

Many thanks. Les.

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[quote user="vette"]

After speaking to the UK taxman, I found out that now I don't pay higher rate tax anymore, my new tax liability is just £3.08 per week.

Probably the only perk of having a tax free pension due to being injured in the line of duty.

I'm sure that will raise an eyebrow with the French tax lady. 

Many thanks. Les.

[/quote]

Hi,

     If you have an injury pension for a  government "in service" injury , you do not have to declare it anywhere .  It is totally  exempt.  reference  BOI-RSA-PENS-20-20-20,§40.

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