Tax on Interest

[bixy]

I am due to make my first tax return in France this coming spring. I became resident in France on the 1st October 2007 and it's quite clear that income received during the period to the end of the year needs to be declared. But what about interest which is paid yearly? I expect to receive interest from French accounts in early January and from UK accounts in April. How is this declared? Do I declare three months worth or will this be declared only when I do my tax return in 2009?

Any advice greatly appreciated.

Patrick

[Sunday Driver]

Your spring 2008 declaration is for income earned in the 2007 tax year, so calculate the interest from 1/10/2007 to 31/12/2007 and declare that.  Interest earned after 1/1/2008 goes on your 2009 tax declaration.

 

 

[bixy]

Thanks for your answer SD. Still not quite clear. So interest that is added for the year ending in April 2008, would a proportion of that be entered for 2007 or not?

Patrick

[mint]

As I understand SD, you only declare when you RECEIVE the interest.  That is, interest paid to you in April 2008, you declare it in 2009.  I hope that's correct as it's what I intend to do!

[Sunday Driver]

French bank interest is paid annually, usually in the beginning of January.  The bank recap sheet that you receive at the same time states that the interest is declarable for the tax year in which it was earned, ie ending the 31 December gone. If Patrick's account was running prior to his becoming tax resident, then that's when the pro-rata applies. The UK account works on the same principal, but the difference in tax years means that he receives it during the French 2008 tax year, so it would be declarable in Spring 2009.

 

[bixy]

Many thanks - now very clear.

Patrick

[mint]

See, SD, I HAVE been paying attention, haven't I?  Wait till the spring, and I will be asking you for advice about filling in the tax form!  That's OK, isn't it, SD?  You always know it all and I do like the way you SPELL it all out![:)]

[Jane M]

I'm in a similar situation to Patrick, so all of this is very helpful.  Presumably we also have to declare on this first French tax return any financial goings-on which happened in England from 1 Jan to Oct 07?

[cooperlola]

No you only declare financial goings on from your arrival date.  The French aren't interested in what happened when you were a UK resident.