bazzer70

As the forum has been a bit quiet I thought I’d post.
We are getting the keys to our new home on 28th of this month - exciting! This year I plan to spend about 4 months on France so as to hopefully make the final decision of whether to move permanently.
if I do d move permanently I figured Jan or Feb next year - I would therefore become liable for French taxes for the 2023 calendar year.
my big question today is: I would sell my UK home before the final move - hopefully time it so I can hand keys over to buyers, and get in my car to move to France. Do I have to make sure the sale is totally finalised in 2022? I worry that should the sale be delayed and I get the dosh in 2023, the year I become a French tax resident, I will incur French taxes on this capital amount - capital gains or whatever?
as always I am grateful for input.

cyrian

You should not be liable for taxe fonciere for 2022 because you were not the owner on January 1st.
When you register for this tax, you will declare whether it is a primary residence or a secondary residence.
The benefit of a primary residence is that you don't pay taxe d'habitation.(and there is no CGT)
You should Google Capital Gains Tax in France which is totally different from the UK.
There are lots of articles on this subject in magazines about living in France.
If you are French resident and you sell your UK home then you need to pay CGT in the UK and declare this in your French tax return.
I am fairly sure that you would only be taxed on any gain for the period during which your UK home was a secondary residence.
Not sure how that would go on a French tax return.
You may (or may not) be required to pay any additional tax in France.
The sale of a primary residence is not taxed in the UK or France.
You can change your french home from a secondary residence to a primary residence when required.
From an income tax point of view and assuming you have income the best time to leave the UK is at the end-of-October because you can reclaim the maximum amount of your income tax.
From a tax return point of view it is best to move on January 1st-ish. You would be liable for tax in the UK up to that date and you would start the new French tax year (January yo December).
I think that if it was me I would sell my UK home before I became tax resident in France just to make life easier.
HTH

EuroTrash

For sheer simplicity I would move on 6th April, everything else being equal.
On your first French tax return you would simply need to state the exact date on which you arrived, and declare your income between that date (6 April or whatever) and 31 December of that year, France won't be interested in your income before the date you became resident/fiscally resident.
The UK, on the other hand... I have in the past had nightmares over HMRC's rules for split tax years.

EuroTrash

Just thinking about this... Does it make any difference to the taxe foncière whether you're resident or non resident? Is it even recorded on your bill? Maybe it is, I don't know. I know there are certain reductions you are eligible for if you're tax resident and you have a low income but a high taxe foncière that exceeds a certain proportion of your income, but I thought you had to apply for them.
As I always understood it, your residency status for taxe d'habitation is decided by the computer - you don't tell the tax office what your status is, the tax office tells you. TdH is billed in quarter 4, in arrears, and the compter decides whether or not you were resident on 1st Jan of year N according to whether or not an income declaration was submitted from that address in year N declaring your income for year N-1. If a tax return was submitted, your taxe d'habitation for year N is calculated based on your income in year N-1, and unless you're a high earner your bill will be nil. If no tax return was submitted in year N, i.e. you weren't tax resident as at the end of year N-1, you will be charged the full amount.
That is how I always understood it but I have doubts now because it doesn't always seem to work quite like that..,

cyrian

ET
No it doesn't make any difference for taxe fonciere.
You have to get into the system and when you buy a property you register as the new owner and declare if it is your primary residence or not.
For French 2nd home owners, they would then be potentially exempt from TdH on their primary property in France while still paying TdH on the secondary.
You can change the status of a property if circumstaces change.

bazzer70

Thanks everyone
I think I will hopefully have my UK house sold towards the end of this year while I am still resident in the UK.
I hope I understand correctly that there’s zero chance of France wanting any capital gains tax from the sale because I was NOT a French resident at the time and will have spent less than 6 months of 2022 in France - even if I decided to start my French residency in say November this year (if the UK house is sold quickly I’ll need somewhere to live - my French house)
Hopefully I will only move at beginning of January so try to keep it simple. My only worry now is that if I do move to France in say November, having sold my house just before, it will muddy the waters (even though my total time in France in 2022 will be less than 6 months.
I apologies if I’m a bit dim but all this makes my head hurt!
id be grateful if you’d confirm I have understood correctly.

cyrian

You will not be liable for CGT on your primary residence in the UK or in France.
If you leave the UK at any time during the UK tax year then you will be assessed for UK tax on a "split-year" basis.
You can Google this for more info.
You would then complete a French tax return (always a year in arrears) stating when you became tax resident in France.

Pulaski

I know _nothing_ about French taxes, but I would, assuming it didn't otherwise cause massive inconvenience, plan to leave the UK _after_ April 6 when I had received taxable income _after_ April 6 equivalent to my personal allowance. To keep the numbers simple, let's suppose that my taxable income is £48,000/yr and my personal allowance is £12,000, then the optimum time to leave the UK would be around July 6, because when I do my tax return for HMRC I will get all the tax that was deducted from my income, refunded.

EuroTrash

Are you saying that because you understand HMRC split year treatment, or because you don't?
Hands up I don't understand it. All I know is there are certain criteria you have to meet in order to qualify for split year treatment and if you don't qualify then the UK will treat you as tax resident for the whole of the tax year. So in your example, are you sure there would be no risk of the OP being considered tax resident by both France and the UK?

I got a nasty and rather expensive shock when I moved from France to the UK mid February to start a new job. I naively assumed that since I'd paid tax and social security contributions in France up to finishing work there at the end of December, HMRC wouldn't put its claws into me until I started my job there in the March. However it turned out I didn't qualify for split year treatment, and I ended up having to pay UK NICs for the whole of that UK tax year, i.e; on my earnings in France between April and December which I'd already paid French social contributions on. It made no sense to me that I should have to to pay UK NICs retrospectively for a whole chunk of time when I'd been in France covered by the French social security system but apparently it was correct. I can't even tell you what happened with tax, it all fried my brain so crispy that in the end I just paid what they asked for and vowed that next time I moved, it would be in April. Which it was.
You could well be right and that is the best thing for the OP to do, but you need to understand exactly how it works and which factors must be taken into account. It could be dangerous to make assumptions because these things defy logic, the devil tends to be in the detail..

bazzer70

My last post vanished! Try again…..
My original post was because I was concerned that if my UK house sale is delayed and I only get the proceeds in January 2023 - the year I become tax resident in France and therefore my French home is deemed my primary residence - that the French could have some claim on the proceeds of my UK home.
I can’t wait until April to move - at present my plan is to move early Jan 2023.
I might even move in November if sale goes through within 3 months. I will certainly ensure I spend less than 6 months in France during 2022. Could this cause complications I wonder?
thanks again all

EuroTrash

But France does not in any case levy CGT on the sale of principal residences.
So if your home in the UK was your principal residence at the time of sale (it doesn't matter if the sale takes a while, as long as the house was put on the market while it was still your principal residence, and you haven't rented it out or taken it off the market since then), even if it were technically deemed taxable in France, zero tax would be levied.

But have a look at France's criteria for tax residence because you seem to think that one can come to France as a visitor, stay for up to 6 months, then transition to calling oneself resident and start the clock again as if one had just landed. That's not how it works. Being in France as a tourist who will return home at the end of the visit, is a totally different status from being in France as a resident who will not leave at the end of the 6 months, you can't arrive as a tourist and stay as a resident. If you come to France with the intention of living here, particularly if you no longer have a home in the UK, you will be considered resident from the date you arrive, not from a date 6 months later or from 1st Jan of the following year. When you complete your first tax form you will be asked for your date of arrival in France. If you write on the form that you arrived on 10 November, you are expected to declare your income from 10 November. Hence the risk of being considered tax resident in two countries for part of the year.

French tax rules for arrivals outlined here https://www.impots.gouv.fr/portail/i...s-revenus-dois
- note the instruction for new arrivals to complete "une déclaration de revenus n°2042 indiquant les revenus imposables en France que vous avez perçus depuis la date de votre retour jusqu'au 31 décembre N"

and this seems a good summary of the conditions for HMRC's split year treatment
https://www.expertsforexpats.com/exp...verseas%20test.
- you could probably meet this condition

• You cease to have a home in the UK
  If you move abroad during the tax year, no longer have a home in the UK and subsequently spend fewer that 16 days in the UK, split year treatment may apply to you. However, this is on the provision that you are either a tax resident of another country within six months or have your only home by the end of six months.

bazzer70

That’s brilliant Eurotrash - thank you.
I do I think understand the residency bit - this why I plan to spend less than 6 months in France during this year at my secondary residence - holiday home (2022). I will be back home in UK in the latter half of this year to then put my UK (primary residence) house on the market and hopefully sell it during 2022 and then move to France in January 2023 - so I can legally declare that I have only moved to France at that time.
It is good to now know that should my UK sale be delayed that nobody can impose any taxes because it was my primary residence at the time I marketed it. That was my main concern.
thanks once more

EuroTrash

That sounds a fine plan. Sorry, I hadn't properly understood from your previous posts.
As per link above, if you move in January 2023 I think you might just have to make sure that you then spend fewer than 16 days in the UK between the date of your move and the end of the UK tax year if you want to claim split year treatment from HMRC. (I think that's where I went wrong, I'd spent too many days in the UK.)

I have no idea how HMRC treats CGT on the sale of a principal residence. I was quoting France's rules but HMRC will likely have different rules. In my experience HMRC will try to tax everything in sight, given half a chance.

G-J-B

I moved to France on this date for that very reason, I had the freedom to be a little flexible and figured it would make my life easier, and it did.

Pulaski

I'm not sure. I used to think I understood the rules, but maybe I don't. Edited to add: I do know that NI contributions are not a "tax", so they do not follow tax rules. If you're employed in the UK then NI contributions will cease when you cease having earnings from employment in thr UK. I would also recommend that anyone who leaves the UK for employment overseas should request to make voluntary NI contributions if they have less than 35 years of contributions, and are eligible to do so. I have paid for about 15 NI qualifying years and I am on track for a full UK pension despite I will have worked outside the UK for more than 30 years by the time I retire.

What I do know is that empirically, I, and others here on BE, got 100% of their annual allowance applied to their earnings after April 6, and the fact that a number of others had the same experience tells me that it wasn't a freak occurrence for me. The only circumstance I can think of that might cause a denial of split year treatment is if you're self employed, as the "last year" rules for anyone who is self employed are intricate and arcane.

In any case there are offsets available that should ensure that any taxes you were compelled to pay in one country should have a credit available in the other country, and international tax treaties general include the rules to enable credits for tax paid and to avoid double taxation under most circumstances.