Taxes
 

Hi,
I have sought several sources of professional advice on this but it all appears very confusing. My spouse has just got a well paying job in a low tax jurisdiction. The kids and I are planning to move to France soon.

We were considering tax implications and it seems that my spouse will have to pay income tax in france as the kids and I are living here. That will be a substantial cost and would completely derail our move to france. I was wondering as to whether someone has an experience with spouse working abroad who could avoid taxation in france.

I understand that working in UK and france the double taxation can be avoided but UK taxes are pretty high too. My spouse's jurisdiction has c 5% tax and hence we were wondering if we can avoid taxes on his income (since he lives abroad) or if we can just pay tax on what we spend in france. Going to extreme lengths we could consider a divorce or legal separation if that helps.

Thank you for reading this.

Re: Taxes
 

Some one more in the know will give more detailed advice, but if you and your children are Resident in France (according to your other thread they'll be at school in the Lyon area), he would declare his income to the French Fisc, as his family's centre of interest would be France. If you were living in France on your own, you would have to declare your "worldwide income" yourself, whatever the source, and be liable for tax on it.
In any case, no one on an open forum can recommend ways of tax-evasion!!

Re: Taxes
 

Hello,
His retirement didn't last long. ;)
You are probably correct that he would be considered tax resident in France because his family live there.
You need to find out if there is a double tax treaty between his country of work and France and what is says.
I wouldn't recommend a divorce or formal separation otherwise you would lose rights including inheritance rights should your OH die.
i.e. If you should inherit anything from his estate (I suspect that it would have to go to his children as per french law) then you would pay 60% inheritance tax on it.
In addition, you would have to complete the process before you arrived in France because you don't have a french marriage contract (there are 2 different marriage contracts) and it would be slightly more complicated.
You would be best to consult an accountant who specialises in international tax affairs.
Have a look online at the English-language newspaper "The Connexion".
There is such a firm that writes an article in it.
You can also look at his salary and the possible additional tax he might pay and consider whether it is worth making your life more complicated.
If you pay additional tax in France and therefore in addition, social charges then your family would be covered for healthcare under the French system.
Good luck

PS That is a tricky one first thing on a Sunday morning.

Re: Taxes
 

It's not confusing at all. Except in very specific cases you are obliged to pay taxes in the country where you are fiscally resident, them's the rules. Tax authorities are well aware that there are cases where people would prefer to do otherwise, and they know from experience what dodges people try and they are on the lookout. You're not the first person to be in this position. So if you are determined to try clever tricks, they will have to be very clever indeed. Claiming a sudden convenient separation or divorce is likely to be investigated and if the facts don't add up (ie you still spend time together, share the money etc) then your claim will be classed as fraud and will work out a whole lot more expensive than if you'd paid the tax in the first place. So you need cast-iron expert paid-for advice based on your complete circumstances and background, not just what you hope to pick up for free on a forum from a sketchy picture.

Why are you so against paying taxes in France, if you like the country enough to live here? Do you think it's fair to have a good salary coming in but live here without contributing your fair share, at the expense of other French taxpayers who in many cases aren't as well off as you? It's a fair system, why do you feel entitled to cheat it? I don't understand what you mean by 'derail your plans to move to France'. Everybody is left with enough to live on after tax, why do you think you wouldn't be?

Have cake and eat it springs to mind. The obvious answer is that if you don't want to pay your taxes here, don't move here. You can't cherry pick the best of everything - ok I'll pay the lowest taxes, use the best health service, live in the place that offers the best lifestyle, the best weather... it doesn't work like that.

Re: Taxes
 

You say, "That (income tax) will be a substantial cost and would completely derail our move to france"
Income tax is one thing, but another less spoken of are 'social charges.' (Cyrian in his post #3 gave a passing mention of these).
Many folks moving to France either to work or for retirement, as often as not, are completely unaware of these charges, and when added to the income tax bill are somewhat shocked.
To be clear, retired persons generally are not liable for social security charges and contributions on their pension income. However, investment and rental income, and capital gains will incur charges.
For those that are self employed, the level of contributions are dependent on the legal and tax status of the business.
Praemonitus, praemunitus.

Re: Taxes
 

Hey, you're plagiarising me!:sneaky:
It's certainly true that social charges and Inheritance Tax for unrelated heirs aren't often considered by prospective expats.

Re: Taxes
 

I just knew that comment would wind-you-up on a Sun morning;)

As for unrelated 'heirs', pity the legacy from Right said Fred .....

Re: Taxes
 

It just made my French Mothers' Day!!;)

Re: Taxes
 

We had built up a retirement nest egg and thought we would retire but he just got an offer which is too attractive to refuse. A 40% tax on his income creates a huge liability per year for us (hundred of thousands of euuros). I just see that as a communist mafioso style extortion rather than a fair payment. We pay for kids' education, our healthcare and consumption based taxes like anyone else. We are in no way a burden.
Our problem is that expert advice is all contradictory (from 3 paid sources); hence the dilemma. We could stay away for another few years until my husband really stops working but even if he doesn't step foot on the french soil he could get taxed. We are happy to pay some tax on the 70k or so maintenance expenses but not on the whole bit and i thought there may be people on board with similar circumstances or may know an expert who really knows what they are talking about. thank you.

Re: Taxes
 

I think you mean, which would be too attractive to refuse if it wasn't for the liabilities that would come with it in certain circumstances. You have to see things in context.

There are lots of things in life that would be wonderful if you could take the upsides without also taking the downside. But since you can't, it makes the decisions less clear cut, you have to weigh things up carefully and sometimes you come to the decision that in fact, although at first sight it looked too good to be true, the cons outweigh the pros.

No offence meant, it's a forum and I was simply expressing a view, but if you come onto a forum of people who live in France and have invested in the country and followed its politics, and you say you fancy living here and take advantaging of what it has to offer but you don't think it's fair to expect you to pay the taxes - well what do you expect :eek:
It's not just about not being a burden. France operates on the principal that everybody pays in according to their means, so that everybody can be looked after according to their needs. That's what's made France is what it is, and if you find that unacceptable and consider it mafioso style extorsion, maybe France isn't a good choice. That's what Gérard Dépardieu and plenty of others decided, and that's why they don't live in France any more. Maybe they would quite like to, maybe they miss the French lifestyle, I don't know, but they made their choice.

It doesn't surprise me that you get contradictory advice, that's generally the case in grey areas.

Re: Taxes
 

Why do you think that the tax would be 40%?
Income tax is per family - not per individual.
You have 2 adults and 2 children which means that you have 3 allowances against tax.
French income tax starts at lower levels % and rises in smaller steps.
There are other ways to reduce your tax liability in France if you get advice from a professional.
I can't help with french tax but I recently had a discussion with a retired french accountant about perfectly legal ways to reduce or offset UK tax.
I agree with ET that citizens are expected to pay the appropriate tax.
Remember, in the UK, someone may be liable for the 40% tax rate but that is just the top slice and their total tax payment would be something like 30% - 33%.
You have to look at the total tax paid and what benefits you have gained e.g. healthcare, pensions etc
If you can't live with that then France is not for you.

Re: Taxes
 

Just to add that I have no problem at all with paying as little tax as you legally can, it would be daft to pay more than the taxman requires.
But at the risk of sounding like a red under the bed, anybody who is paying hundreds of thousands of euros of tax in France has more money than one family needs, and has no business crying crocodile tears and making out that the state is taking the bread out of their children's mouths.
All IMHO, of course.
Plenty of people pay these kinds of taxes. I know that because I see the figures, it's part of my job. I admire them, and I appreciate them because France would be a poorer country if they all buggered off to live abroad or dodged their responsibilities.

Re: Taxes
 

As indeed, many of them have. I read last year, that if you rank "French cities" by size based solely on the number of French citizens that live there, then the sixth largest French city is ..... London! :blink: IIRC there are 400,000 French citizens living in London. ETA: A bit of internet research suggests another 60-80,000 in New York.

The French government will tax you until it hurts if you have a decent income and any wealth.

To the OP: If you are concerned about the high rates of tax in France I recommend that you either you postpone your plans to relocate to France, or find somewhere else to emigrate to that is more agreeable to you from a taxation perspective.

Re: Taxes
 

:lol: although I think most of the French don't go to London because they ARE rich, they go there to GET rich because the UK is regarded as the number one get-rich-quick economy. Not sure how lightly the superrich are taxed in the UK these days although I get the impression that each UK budget shunts a bit more of the tax burden off of the very rich onto those further down the scale.

I'm surprised there are so many Froggies in New York but I guess that must be for the same reason, because it's seen as the go-ahead business hub of the world.

Re: Taxes
 

I see quite a few articles on the subject of french people leaving france, making money, getting ahead in their careers or just experiencing a new lifestyle (like the rest of us really). The same articles also show that these people RETURN to France in great numbers when they have children or get older.

To the OP - France is France and with that comes high taxation/charges sociales. If you think France is tough, try Denmark or Sweden? It's all relative.