Mitzyboy

Incidentally (interesting to see if its different in France) in Spain UK rental income has to be declared in Spain for taxable purposes if you are a Spanish resident.

cjm

Interesting development. We have two pensions, one 'government', mine private, former is taxed at source. We declare all to HMRC as we have property income in UK. We chose to be taxed in UK. We are now planning a visit to the Impots to clarify situation. As we pay no further tax in UK, I cannot see how France can tax us, we have no income in France. We cannot have all pensions paid in France, that is not allowed on government pensions.
Will keep you posted.

Mitzyboy

You misunderstand. You have to have a government pension taxed at source, and that is agreed between member states. If you choose to be taxed in your country of residence, i.e. France, then you will take advantage of the allowances in France.

So if you have a government pension and a private pension and you have elected to have them both taxed in the UK .... you are probably/possibly paying tax unnecessarily

I'm not sure about your property income, but certainly in Spain that is required to be declared in Spain if you have been there over 180 days and have therefore become a tax resident

Im_and_Er

Can we be crystal clear on one crucial point, where you pay your tax is not a matter of choice or election but is determined by circumstance.

A non public service pension is taxable in France and the only 'choice' you have is whether or not to to submit the necessary forms to have it paid net of UK tax. If you do not the The Impots will tax you again and therefore you will be taxed on it twice.

Assuming that is of course that you tell the truth on your French tax return. If say you are declaring net amounts because you have paid tax in UK then you are committing tax fraud.

cjm

Full declarations have been made in UK and France. In effect, they are the same. I'm starting to think the matter is a mess, everyone seems to have a different take on what is right or wrong. My understanding, rightly or wrongly, was that you cannot be taxed twice on the same income. We chose to pay tax in UK. HMRC, despite many and I mean many conversations has never indicated any other route. If the so-called allowances in France against the same set of figures are not as great, this may be an answer.
Tomorrow I see the Impots and hopefully will understand more. The tax demand we have in France is very small, but I wanted to clarify the position.

Mitzyboy

I just dont seem to be able to make things clear.
If you live in a country then you eventually become a tax resident there. In Spain its 180 days. You dont choose where you pay your tax (with the odd exception), you pay it in the country you live in and have therefore become tax resident.

So no, you dont pay twice because of the double tax treaty. But you pay it where you should pay it otherwise it can get complicated.

In Spain if the tax rate is higher there than in the UK and someone is paying in the UK, then the Spanish will want the difference between the two.

Basically (although I dont know your full circumstances) you are paying tax in the wrong place because you think you have the choice .. thats how it seems anyway.

cjm

Mitzyboy, I do hear you . But we opted to pay tax in UK, tho it may be greater. At no time has anyone previously suggested there is no option to me but to pay primary tax in France. I am wondering if the French tax people have fully understood our tax return, though we thought we had added information to clear up any confusions when referring to tax paid in UK. Your comments have been helpful in raising the issue More news after we meet the man/woman from the minsitry!

Mitzyboy

Go to the French tax office and ask them if you were to live in France permanently and had income from the UK, where would your tax burden be.

cyrian

My understanding is that you become tax resident after 183 days. That does not mean that you cannot pay tax in other member states. It is not just rental income - it applies to income tax; capital gains tax etc. If you are tax resident in France then you should declare any such income and tax paid.
You would then become liable for any further tax due in France where the appropriate tax is greater than the UK tax - you however dont get refunds if it is lower - you just dont have any further liability.
Conversely, if you are a UK tax resident and say sell a french property then you are due to pay french capital gains tax and then the difference between that and the UK liability back in the UK.
It is not a matter of where the tax burden should be but where the final calculation takes place.
In this example (CJM) I dont think that there is any doubt that the final calculation should take place in France

Ka Ora!

France has a special Tax Form for Overseas Income it's the "Declaration d impots de etranger" They just like to know about it. No more Tax is deducted.

Mitzyboy

So why is he being charged more tax then?
So are you saying that the tax rules in Spain are completely different to those in most other EU countries. I.E, if you become a tax resident in France, you dont have to pay your taxes there?

Annetje

FULLY AGREE

Ka Ora!

Spain is a law upon itself France would prefer all the Taxes were paid here but has set itself up better to prevent double taxation to residents. You have to remember income tax here is a different beast to most places. IE: Married or Pac'sed partners income tax allowances are combined If you have 2 children they count as one adult and are combined. So for example in our household unit only my wife works but there are two adults and two children which gives her an allowance of three people. I forget the exact figures but it means she can earn about 15+ k before income tax is due. They also collect the tax once a year so the onus is on the employee to give their tax rather than the British Paye system.

Mitzyboy

Its not just Spain, it's most of the countries signed up to the double taxation treaty
Your example shows that a couple with a Government pension, for instance AND UK income would probably be better off declaring their tax in France.

In Spain you can also claim allowances for children btw

cjm

Okay, said I would do an Arnie! Spoke with tax people today. Now it's that 'dork' moment. We entered a rental income in a wrong section. So now resubmitting forms correctly, same figures, but in right places.

Did discover that a private pension from UK is taxable in France. A government (employee) pension is not, where the tax has been paid (Double Treaty [note to dork: must readit]), but our local office has asked for proof of payment and tax and they want it in French. Spoke to UK tax people afterwards and they chuckled. "We only issue in English," they said. Ho-hum. But now getting fresh UK document anyway to see if that can do the trick.

Upshot is, because of my error, we are not currently liable for tax in France. A very kind senior tax lady guided me through my incompetence.

I do though tend to agree with Cyrian's interpretation and I will look more closely for next year. If anyone knows a good web source for free info, please PM me.