Have Tax Questions? Ask a Tax Expert for Answers ASAP
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.
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??
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?
Is someone coming back to me?
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?
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?