Hello all I’m new to this group. I accidentally married a Frenchman and obtained a carte séjour just under two years ago…. So I need little advice on firstly tax and secondly pensions..
All my income comes from uk rentals. My understanding was that as it was a uk income it’s purely needs to be declared to uk government and pay tax there? But im now understanding that I have to fill in a French tax form because of the carte séjour which automatically makes you a French resident ? ??? Even though I spend 50/50 in uk?
Second question is about taking 25 % lump sum out of uk pension……am I opening up extra taxation in France and uk by doing that ( I haven’t done anything yet as worried about tax) Sorry you’ve probably heard this all before.
Maybe someone could point me in the right direction. Thanks Dawn
Not at all an accident in marriage, but didn’t do all the research before hand into what implications this has on tax, pensions, residency with carte séjour. Just wanted it to be easier to see my husband. Now just want to sort it out without nasty tax surprises….
The carte de sejour is only issued to French residents so it’s really the other way around, you’re French resident so you’re issued a CdS. Since you’re French resident then you’ll need to do a French tax return.
You’ll only get taxed once and my understanding is that, as you’re French resident, it will be in France, though someone else will be better qualified than me to comment.
The tax treaty between France and the UK means property derived income and capital gains are reported in the UK and taxed by the UK.
This is exceptional as normally all your worldwide income is taxed by France as primary for other types of income or capital gains. The only other type of income that is reported to and taxed by the UK if you’re a French resident that I’m aware of, is government-type pensions (and a few local-government type pensions). Otherwise income from anywhere including UK is reported to France and tax paid on it to France.
Obvs the UK income figure will have all possible taxable expenses booked against it resulting in the lowest net profit being reported in the UK ahem.
You report the net income from that on your annual Frsnce tax declaration which you do every year in the March-April-May or so window everyone is required to submit it in.
If the net property income (after tax as declared to UK) from the UK pushed you into a higher French tax band you will be taxed on your total income including that, in France at a higher rate if the total income declared in France including the declared UK net property income has crossed into another tax band.. But not directly by France on the UK property dervived amount.
Lump sums are taxed at 7.5%. Currently there is an abattement of 10% disregard of such amounts so net tax rate 6.75%. Don’t count on both continuing forever though - the big issue is that France too is strapped for cssh so tax will chsnge.
If you take the lump sum on, say, 2nd January then you are not reporting it till following year march - april- msy then paying any tax due in France later that year. UK chancellor will still force initially 40% or even more to be deducted on payment to you by a particularly nasty version of emergency tax deduction at source that you cannot avoid even as a non-resident..
As soon as you’ve arranged lump sum get a France Form Individual (look aound this site) signed by your local French tax office for it (and any other UK derived income - 1 signed form per income source - and send to HMRC (provably and keep tracking proof) to prove you should not be taxed in UK at the end of the dsy on it. As soon as it’s paid chase HMRC for refund having also submittef the FFI form. And chase and chase. 1 year or so not out of the ordinary for HMRC to keep their grasping mitts on it.
@KarenLot - Back in the day, I learned to type on a real typewriter and there were no letters or numbers on the keys so you couldn’t cheat and look - so I developed a very fast and accurate typing speed. In one job I had, you were rewarded by increments to your salary for your typing (and shorthand) speeds. I was well rewarded as I could type at well over 120wpm (shorthand 180wpm). One boss I had didn’t bother with dictating his letters to me. I just used to type as he spoke. Those were the days …..
If you are married, accidentally or not and no matter whom to, then if you also live in same house you declare as a household. Which you should have been doing since you arrived with the intention of staying. So you/your husband needs to correct previous returns if you have not been declared.
If you don’t live together then you have to go through a process to be allowed to declare separately.
The uk rental amount is reported on your joint return and you are credited with the tax you would have paid in France. You don’t pay tax on it directly. But the negative thing is that if your rental income takes you jointly into next tax bracket then you will pay more tax,
Just as well, ss my shorthand was only 110wpm. Impressed with yoir 180wpm! Didn’t know that wss possible !
Later, professional colleagues got worried when I typed in meetings because they knew I was fast enough to type every word they said as they said it.
The computer project I’d been hired to work on in Paris was clearly going to be canned after about a week. But I managed to prolong the nunber of days I got paid by making myself useful taking the notes of everyone else’s interviews with their part of the clients, verbatim at talking speed in the meetings. Quieter on a modern laptop than an old manual typewriter ,which would have made it impossible! Nothing the client said was lost and all they had to do was edit the transcript I handed them and voilà comprehensive client minutes.
Excellent pay rate as Rollout Manager for basically a secretary’s work. But sadly secretaries as the oid ones were are a very rare breed now.《Brag over》
I think you may possibly, and potentially be dual tax resident in the UK and France. Obviously this is very fact specific and we lack the detail but it’s a reasonable working assumption
In practice, I would report to each country, sources of income from within that country and provide a note on the tax returns that you are a resident of both countries. It’s beyond the scope of this thread to get into the details of tax treaties etc, but this approach, whilst not strictly technical, is likely to produce the right answer in terms of who gets to tax what income.
In France, you and your husband would file jointly as married, but whereas he would report his worldwide income/gains, you would only report your French source income (if any!).
In the UK, we have independent taxation, so you would only report your rental income, and not any of his UK income (if any). You would NOT need to report your 25% tax free pension lump sum, provided you don’t take any more from the fund at this stage. If you do in future, you would report that excess over 25% on your UK return.
Following the logic of reporting income to the country of its source, you would not report the pension to France unless and until for example you moved full time to France. Then you’d go through the various hoops @KarenLot referred to earlier , to get the UK and France to agree that only one country, France if that’s where you’re then living, gets to tax the pension going forward.
Ideally, you’d be advised to take proper UK/French tax advice on your situation, but it may well be the case that the (presumably small) amount of tax at stake is disproportionate to the likely costs of tax advice, unfortunately.
You pay taxes in uk on rentals … you declare in france these earnings in a specific area … you will not pay tax a second time around ( rule of no double taxing)
