scrubbedexpat056

So, next question. We are gradually working our way through the maze of establishing ourselves in France permanently with the health and tax situations. Our UK accountant will approach HMRC to try to get them to let us carry on paying our tax yearly rather than getting our tenants to do quarterly accounts and sending them 20%. We have unblemished tax histories including 15 as landlords so we are hoping that will get us around that problem. This is assuming that we will still be fiscally resident in UK, though I understand that this is down to HMRC and the French tax authorities. But assuming things stay as they are we will need a UK sterling bank account for the tenants to pay the rent into and pay our bills and tax from. Of course, we already have one, but I have been reading that you can't have a UK bank account as a non UK resident. There again it only says you can't open one, not that you can't keep one. Various people on this forum have mentioned keeping home bank accounts open. Maybe being fiscally resident in the UK is what makes it work?

EuroTrash

If you live in France then you are fiscally resident in France, that is pretty black and white..
Your rental income is still taxable in the UK. But once you live in France, then you pay tax in the UK as a non resident. It doesn't make a lot of difference in practice, but the biggest difference is that you only declare to HMRC, and pay tax to them, on income that is taxable in the UK. You declare your worldwide income in France and you pay tax on eg your UK state pension in France.
This might help
https://www.gov.uk/tax-uk-income-live-abroad/rent

As regards the bank account, most banks will let you keep your account open if you move to France. As you say, it's if you try to open a new account as a non UK resident that there tends to be a problem. So best advice is, don't close any account you may need. Also, don't forget to declare all UK accounts to the fisc when you fill in your tax return here, because the penalties if you forget are eye watering..

dmu

FWIW, I've been with Lloyds all my life, but when they realised that I was no longer resident in the UK, they moved my Current Account to an Offshore Account on the Isle of Man.

scrubbedexpat056

Thanks for the replies. I clearly misunderstood the meaning of fiscal residency. I thought it meant where your principal earnings came from and where it was taxed irrespective of where you lived more than 6 months in the year. And thanks for the heads up on the bank accounts. One complication could be that my wife has power of attorney for her parents and has a joint account with her father so she can pay the carers and the home for her mother. None of the money is hers, but I guess we are going to have to supply a mountain of paperwork to support that.
DMU, from what you said I assume you didn't tell your bank that you moved to France. How did they find out if you don't mind me asking?

dmu

I told them when I was settled in, and the computer sent Statements to my French address. When a human being realised that I wasn't in the UK any more, they moved the account to the Isle of Man. This was last century and things might have changed since.
I forgot to mention that there's no regular income going into the account and irregular payments out when I go to the UK, so your case may be different.

EuroTrash

I'm with the Halifax and they didn't fuss about me living in France. Once every few years, when I go to my online account it takes me to a page where I am asked to confirm that I still am resident in France, I tick yes, and it changes nothing.
Your bank needs to know you have moved abroad, especially if you get any interest on your savings because otherwise it will keep taxing the interest at source. Savings interest is taxable in France if you live in France, so you want your bank to stop taxing it at source otherwise you will pay tax on it twice. This explains how to notify HMRC https://www.gov.uk/government/public...nce-individual Then whatever date you tell HMRC you left the UK, you should write the same date on your first French tax return as the date you arrived in France.
I don't see why your wife would have to explain or provide any paperwork about her parents' affairs, unless specifically asked. If it's not her income she isn't expected to mention it on the tax forms, the fisc are only interested in your and her income. Declaring your UK accounts simply means declaring their existence by providing a list of account numbers and details, they don't look at what money is in the account. The only time they would see activity on the account, would be if for some reason they decided to do a tax inspection, and if it's in a joint account that she doesn't use for her own personal finances I can't see it being queried at all.
Essentially France makes no difference between residence and fiscal residence; if you meet the residence criteria you are normally fiscally resident here, and I seem to recall you've just joined the health system which only residents are entitled to do. Definition here https://www.impots.gouv.fr/portail/r...sidents-france and I guess you meet the first condition, basically France is where your "foyer" is. Don't confuse paying tax in a country with being fiscally resident there; it's not unusual to for a person to pay tax in 2 or more different countries but you are only classed as fiscally resident in one country, and that's normally the country where you have your primary residence and live your life. Where each source of income is taxed, is defined by the tax treaties, but usually it's where you physically are when you carry out the activity, or for rental income where the property is located.
The six month thing is a red herring really, it's not actually a defining criterion in tax residence for either the UK or France, although obviously a person usually does spend most of the year at their primary residence.

EDIT - also, if you have ISAs or Premium Bonds then the interest / any winnings are not tax free for non-UK residents, so you might want to think about moving it to a tax free savings scheme in France.

cyrian

For some strange reason they stopped deducting interest at source a couple of years ago.
Previously, you were paid the interest net of tax at the basic rate and either had to apply for an exemption if you didn't pay tax or claim a refund on tax paid from HMRC.
Now you are paid interest gross but you have a "Personal savings allowance" (PSA) which means that the first £1k of interest is tax-free (£500 for higher rate taxpayers).
There is also a "dividend allowance" of £2k.
You then have (supposed) to declare these figures in a tax return.
HTH

EuroTrash

Ha, I didn't know that had changed. Thanks Cyrian.