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TonyTax
TonyTax, Tax Consultant
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Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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Can you advise on French tax issues?

Resolved Question:

Can you advise on French tax issues?
Submitted: 3 years ago.
Category: Tax
Expert:  TonyTax replied 3 years ago.
Hi.

I cannot see your previous question. I've answered some questions which involve UK and French CGT here in the past so let me know what your specific question is and I'll take a look.
Customer: replied 3 years ago.

I will start again - I lost my question half way through -I don't think you got it.


We rent out our French property as a holiday home in the summer. For the first time, with a new Council, we have been asked to register with our local commune to pay the 'Taxe de Sejour' ie a small amount per night for everyone who stays in our property.


This is a local tax, requested by the commune. What we need to know is: if we register locally to pay this taxe de sejour, will this automatically mean that the main French tax authorities will then know abaout our rental and ask us to pay tax in France on our rental income?


We submit accounts in the UK for our French rental income, all received in the UK, and pay tax in the UK where there is any little profit made, but we have not registered to pay tax on the rental in France as well.


I look forward to your response.


Rosalie

Expert:  TonyTax replied 3 years ago.
Thanks.

Leave this with me while I draft my answer.
Expert:  TonyTax replied 3 years ago.
Hi again.

Assuming that you are not tax resident in France, then you will only be liable to French income tax on income derived from sources in France, in your case income from your holiday home. This is covered in Article 6 of the France/UK tax treaty here. You will be able to offset any tax you pay in France against any UK tax liability you have on the same income, though there may be differences in how the taxable income is calculated between the two countries.

Given the current French government's desperation to raise taxes from wherever it can, I'd be surprised if registering locally for the 'Taxe de Sejour' does not reach the national tax authority in France and I'm surprised that you haven't been contacted by the French tax office already. From my dealings with them, they seem quite efficient. In the UK, many people didn't register for self-assessment where they have a property in the UK they let and have been approached several years later by HMRC who have access to property transaction databases such as The Land Registry. I'm sure the French tax people have access to similar information. It may be that you have not been approached yet because you let your property privately as opposed to via a local agent. There is some information on French property tax here.

I'd advise you to seek out some local advice to assess your situation in more detail. It may be that you have little or no French tax to pay but it's always better to approach the tax authority before they find you.

I hope this helps but let me know if you have any further questions.
Customer: replied 3 years ago.

Thank you for that. If we do approach the French tax authorities as you advise will there be any penalty to pay on the years that we have rented our house prior to registering with them, and if so how far back can they penalize us?


Rosalie

Expert:  TonyTax replied 3 years ago.
You can find information on the French tax penalty regime here. The retrospective time limits can be found here.

As I said in my previous post, it is always better to approach any tax authority before they find you. Unless, you are fluent in French, you might consider having a local tax adviser or accountant put the figures together for you and to advise you on the likely penalty, if any.
Customer: replied 3 years ago.

Many thanks - but just before I leave and happily rate your answer, how do you suggest I keep your replies so that I can access them in the future?


Rosalie

Expert:  TonyTax replied 3 years ago.
The question will always be open so long as you don't ask for it to be closed. You can either print the answer so you have access to the content as well as the web page address and/or you can save the web page address and send it to yourself in an email. If I were you, I'd print the dialogue and email the web page address to myself.
TonyTax and other Tax Specialists are ready to help you
Customer: replied 3 years ago.

Thank you for your advice. I have left a rating for excellent service. We will try to get some local advice as well to make sure that if we do approach the French general tax authorities we do it properly.


Rosalie

Expert:  TonyTax replied 3 years ago.
Thanks for the rating and the best of luck with the French tax office.

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