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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3360
Experience:  FCCA FCMA CGMA ACIS
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I own a furnished apartment in France which Ive rented in

Customer Question

I own a furnished apartment in France which I've rented in 2012 and 2013. I have not declared the rental income to the UK or French Authorities.

I am a non-resident for French taxes. The rental income for 2012 and 2013 was £4472.23 and £5064 respectively.

This was my sole source of income for the period. I have been concerned probably unnecessarily for sometime about it and would now like to declare it (however small the tax).

I have the following questions,

What would be the rate of tax in France and the UK? Would the social charge element in France apply to a furnished apartment. There seems to be some confusion on this point?

Would there be any penalties associated with the non-declaration and if so what would be the level in the France and the UK?? This I am concerned about!

How do I go about declaring in France? Do you have an address of the French authorities?

The apartment is located in Nice on the Cote D' Azur.

Thank you.

Gerard
Submitted: 3 years ago.
Category: Tax
Expert:  bigduckontax replied 3 years ago.

Hello Gerard, I'm Keith and happy to help you with your question.

 

As far as UK taxation is considered you are below the tax threshold and there is no liability to taxation. You should ask your local tax office for forms to make self assessments for the years in question. You should have done this long since and HMRC could charge you penalties for failing to self assess, but as there has been no loss of revenue they may be lenient

 

French tax kicks in at income over about 6K euros and is at 45%. Like the UK there is a sliding scale and as far as I can see your income approaches the limit and there might be some at 5.5%. Furnished rentals are classed as a commercial activity. You can download a tax return on line and submit on line also. At this stage no need for an address. Social charge is 15% of net rental income. This is a mere overview however. French taxation is exceedingly complicated and you are always advised to employ a local agent in such matters. As for penalties little data is available. For minor matters it can be as low as 5%, but for outright evasion can be as high as 80%. It is time to make your peace with tax authorities and declare.

 

I do hope I have been able to help. I am going out for a bit to take the wife to a car boot sale [swindle they are, no one ever has a car boot to sell], but will be back by 1100 hrs at the latest to answer any follow up questions you may have so please hold them off until then.

Customer: replied 3 years ago.

Keith,


 


Thanks for your informative message.


I hope you enjoyed the car boot sale finding some interesting objects.


 


Understand from your message that a French Tax form can be downloaded on line and submitted on line. Can you give me the website and perhaps the reference of the tax form?


 


I have a French mortgage on the property, can interest payments offset the potential tax liability?


 


Read in the Sunday Times (16 March 2014) that non-residents can reduce their turnover by 50% should the lettings be furnished as opposed to unfurnished. Is that your understanding?


 


In 2013 I had to replace my shower fittings at a cost of Euros 477.44. Can this also reduce the tax liability??


 


Kind regards


Gerard


 


 


 

Expert:  bigduckontax replied 3 years ago.
You have been advised that it is essential to consult a local French professional in this matter as French tax is so complex. This is an UK information site not a French one.

When you mention the 50% you are presumably referring to the Micro Enterprise where 50% of your net profit is taxed at 35%. It also provides a simplified accounting system.

For tax returns go to 'impots.gouv.fr' to lead you through the process.

Mortgage relief is only available in the first 5 years of the loan. It is capped at 1.5K euro for the first year and 0.75K for the next four, per person.

The rules appear to apply to net profits.
Customer: replied 3 years ago.

Keith,


 


regarding the 2nd paragraph of your response.


 


The article in the Sunday Times was dealing solely with rental income.


I quote the relevant extract from the Times


 


'Ways for nonresidents to reduce the tax burden on rental properties across the Channel include letting them furnished, in which case owners pay tax on just 50% of their turnover'


 


Not being a qualified accountant I assume that the rent received and where the apartment is rented furnished, the rental income can be reduced by 50% for tax purposes.


 


Is this correct?


Gerard


 

Expert:  bigduckontax replied 3 years ago.
Not quite Gerald; it's the net profit from the property rental which goes through the Micro Enterprise system, but nearly right.

Regards

Keith
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3360
Experience: FCCA FCMA CGMA ACIS
bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 3 years ago.
Thank you for your support.
Customer: replied 3 years ago.
Relist: Other.
when I approached just answer I was of the opinion that you could deal with French/EU tax problems. Indeed when I first put my question your drop down menu covered EU.

When dealing with Keith who seemed very knowledgable on UK matters, he stated in his response that you were a UK site only. I felt I couldn't proceed further with the enquiry.
Expert:  bigduckontax replied 3 years ago.
I must explain that your question came up on the UK Tax site which is why I told you we were a UK site. I did research the French tax side and advised you accordingly. I see one of my colleagues is also looking into your question at this moment.
Customer: replied 3 years ago.

Keith,


 


Is someone coming back to me?


 


Kind regards


 


gerry

Expert:  bigduckontax replied 3 years ago.
Gerry

I couldn't possibly comment! I do know that when I made my last post another expert was also looking at your question, but dropped his lock shortly after declining to participate. It is sitting waiting for someone to pick it up and run with it, sorry.

Regards

Keith
Customer: replied 3 years ago.

Keith


 


I think this will now 'fall between the cracks' and will not be concluded.Can it be passed to the admin department for re-assignment?


 


Gerry

Expert:  bigduckontax replied 3 years ago.
I have passed your question to the moderator.
Customer: replied 3 years ago.

Thank you

Expert:  bigduckontax replied 3 years ago.
Pleased to be of assistance.
Expert:  Nicola-mod replied 3 years ago.
Hello,

Thank you for contacting JustAnswer.co.uk.

It was brought to our attention that you asked a Tax question about France, where we do not have active professionals in that category. As much as we would like to assist you, we have to be honest and say that the best we can do is maybe to provide an internet researcher who might be able to find your answer. We realize that option is not ideal, and we always want to provide our customers with the best possible answer.

At this time, we'd like to give you the option of leaving your question open. Keep in mind that you're never obliged to accept an answer that you're not satisfied with, and you can try it out before you accept. Or, we can close your question page for you, if you prefer.

Please let me know how you’d like to proceed,
Nicola
Customer: replied 2 years ago.

Hi Nicola,


 


I will keep it open in the hope that someone may be able to answer the question.When I put the question, I was particularly concerned about the French taxation and I saw on your website that EU was covered or so I thought.


 


Are you likely to get someone who could be in a position to answer?


 


Gerard

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