cjm

I anticipate not being the only one to have received the above seeking to tax us on rental income from a UK property, though resident in France. Comments elsewhere suggest this is a misinterpretation (sic) of the double tax treaty that entered life in January 2010. The tax is for that year. Payment is required by 15 November with interest payable for later payment. Like many we declare tax in the UK and also in France (as 'world' income), but we pay tax in UK only (at least until now). Elsewhere is a suggestion that French tax ought to re-read Note 17 with the Tax form 2047 Déclaration des Revenus Encaissés à L'étranger.
Comments most welcome.

cjm

I have spoken with HMRC and they advise that the double taxation treaty has not been breached by the French; however, the advice was that the French government has altered its own internal tax rule.
But, when I argued that we are being taxed on the same declarations we submit to the UK, eg pensions and rental, the response was far from clear and they repeated that the double treaty is being honoured.

From elsewhere I found this, which may or may not be of any use. I shall be telephoning the British Embassy later this week and may get some better advice there.
Quote: ... for the benefit of anyone else who's received such a demand, and who holds an S.1 (used to be known as an E106 or an E121) that you are exempt from payment. If you wish to dispute it with your local tax office ask them to read Note 17 of their Form 2047...

DEJW

Is it perhaps not "tax" but "social security" (NI in the UK). I have the pleasure to pay this SS on pensions, dividends and bank interest (does anyone here remember back to those days!).

DejW

cjm

Went to local tax office, but vacances mean we have to go back next week, will advise. The woman we are seeing we have seen before and she has helped untangle the rules, new and old. There is a new tax France is seeking to levy, question is does it break double taxation treaty; initial comments suggest French civil servants as confused as we are.

dmu

Hi, I read on a regional forum that Residents in France have to pay these Prélèvements Sociaux on all worldwide unearned income.
UK citizens can apparently then reclaim from HMRC the tax they paid in the UK.
Best to pay by the due date to avoid the fine, and contact HMRC with proof of payment.

cjm

Certainly considering that dmu, but office personnel said not to be too concerned as we had sought to talk through the matter and this can be done before the deadline.
Our issue has been and remains that in declaring all income from all sources in the UK, where for one pension it has by law to be taxed there, seeking to levy a tax by France, when tax has already been paid in UK, is not in keeping with the double taxation treaty. I feel this has come about, to be fair, by our failure to provide sufficient details in the correct boxes on our French tax return, so a chat at the tax office, who we have always found helpful, may provide an acceptable solution.

cyrian

If it is on "unearned income" then there is no NI paid in the UK.
NI is not normally refundable in the UK unlike income tax.
Unearned income can be taxed in the UK and declared in France - in which case no more income taxshould be paid.
It can be un-taxed in the UK and then declared on the french tax return.
If tax is paid twice then contact HMRC as stated above.
Lots of luck

DEJW

If it's any help I did rather nicely out of French taxes last year. I declared on my Fr tax return my UK based dividends (tax paid) and my UK based pensions (also paid with tax deducted). The Fr tax authorities decided that my worldwide income was below the bar so they refunded to me (in France) the tax that I had paid in the UK! (Merci M Sarkozy). I still had to pay soc Sec on the dividends and pensions.

DejW

cyrian

We pay a small amount of social contributions in France but pay no NI in the UK.
If we became tax-resident in France then I would expect to pay social contributions on our UK income.

dmu

AFAIK, the Prélèvements Sociaux are Taxes which were created (in an attempt) to fill in the deficit of the Sécurité Sociale. All French taxpayers who declare French and worldwide dividends, interest, rental incomes,.. pay them.
Personal contributions to the French S.S. aren't concerned.
This is from a French point of view - apart from my not-worth-mentioning Pension for 5 years' work in the UK, we don't have any income outside of France, so can't help re the double taxation question.
Good luck!

cjm

Thank you Cyrian, a nice compact response, as with dmu. I will cut and paste and arm myself ....

cjm

Well visit to the local tax office was helpful, if only to make us aware that we had placed items in a wrong column, hence issues (some) created. Have a new meeting arranged and will now go armed with UK tax returns and HMRC response forms, showing tax paid in UK.
We have both spent time researching via the web to understand what is and what is not payable/allowable in France. But, there are some contradictions. French impot treat old age pension and company pensions as privé, they accept Govt UK pension is UK taxed. However,depending on income UK can tax both company and old age pensions. But, France impot also want to tax income from UK rental property, even though HMRC say they are the primary tax route.
And when you start to look at what the rules/advice is regarding how long stays in UK can be for you not to be classed as resident it gets even more confusing.

cjm

Went again to impot on Lundi, the officer there had obviously done some research. We took lots of copied docs re our UK taxes and P60s, it was agreed they would revisit the calculations. Result was €300 reduction. However, as the tax was levied on UK income, we need to discuss further and hopefully get HMRC to credit us with the French payment we have made. Not much money, but we need to have it right. There does seem to be confusion re penions paid in UK. France accepts government pensions (eg teachers, NHS etc) has to be taxed in UK, the issue of pensions privé seem less clear; UK old age pension and company pension seem classed as privé. Both are declareable in UK. It was also necessary to remind the impot that UK has first and exclusive rights on tax for UK property income. So, partial result.

cjm

Need to change the focus of my original post to look at Tax Habitation, about which there were posts back in Spring this year.
Our tax reduction (as above) followed assessment on a figure we partly got wrong and partly because the Impot taxed us incorrectly.
We have just received our Tax Habitation charge and on the document is the original (now incorrect) income total for us both, as originally declared.
We shall now have to take new Impot paperwork (when it arrives) to the Impot to seek a fresh calculation on the Tax Habitation. No issues there and will share when I know more.
However, in the earlier Spring posts there was a mention of some or all exemption of the TH for retired people whose income fell below a thresh-hold. I'd like to find out more about this and what the thresh-hold is. Also a mention was made to retired people not being liable for the TV licence. Anyone know how that might work? Is it also linked to income, or based on age and what age?

dmu

Hi,
http://vosdroits.service-public.fr/F42.xhtml
or google "exonération taxe d'habitation" for other results.
Basically, if your "Avis d'Imposition" for income tax is NEANT, you're likely to be exonerated (just the Taxe d'H, not Foncière). On the other hand, if you paid "prélèvements sociaux", your unearned income will be taken into account....
I believe exoneration of the TV licence is subjected to the same conditions.
Hope this helps, but your Impôts can advise you best....