I wonder if this might be a little misleading and cause people to think that they are free to choose whichever is most beneficial to them, rather than following the rules.
The tax treaty does set out very specific criteria for cases where an individual meets the tax residency definition of both countries:
2. Where by reason of the provisions of paragraph 1 an individual is a resident of both Contracting States, then his status shall be determined in accordance with the following rules: (a) he shall be deemed to be a resident only of the Contracting State in which he has a permanent home available to him; if he has a permanent home available to him in both States, he shall be deemed to be a resident only of the State with which his personal and economic relations are closer (centre of vital interests); (b) if the Contracting State in which he has his centre of vital interests cannot be determined, or if he does not have a permanent home available to him in either State, he shall be deemed to be a resident only of the State in which he has an habitual abode; (c) if he has an habitual abode in both Contracting States or in neither of them, he shall be deemed to be a resident only of the State of which he is a national; (d) if he is a national of both Contracting States or of neither of them, the competent authorities of the States shall settle the question by mutual agreement.
If challenged by the tax authority of the country where (s)he has “opted” not to pay tax, (s)he must be able to justify this situation with reference to those rules. So it is true that you have the option insofar as you can arrange your situation to bring about the result you want, but if you meet the French residence criteria, it is not enough to simply say, I meet the UK residency ties test and I want to pay tax there. You have to go through the tie breaker rules in the tax treaty, in order, until you reach one which is decisive.
Of course it is true that residence and fiscal residence are separate issues and are not always the same, but in most cases they are closely linked. For instance, most people who have a CdS would by definition have a permanent home available to them in France and have a centre of vital interests there (rule a) , because these are also very close to the criteria for legal residence in France under the WA:FoM rules.
My point is that living in France but classing yourself as not fiscally resident involves treading quite a fine line and saying you can “opt” to do that, risks making it sound a lot less complex than it actually is.
Having gone round the subject… have we come to the conclusion that a non-EU-spouse can come to France with the EU-spouse and simply needs to apply for a visa (for however long) ???
Seems reasonably straight forward to me…
I think it’s straightforward as long as you don’t trigger the 90/180 day ‘Schengen’ thresholds in France.No visa needed for Brits accompanying their EU spouses to France in that scenario.
Others may take a different view, but above that 90/180 day threshold, the safe route is either a visa job, presumably a long stay one, or a CdS if you’re prepared to take a more bullish/aggressive position and are braced for, and can respond appropriately to potential pushback from the authorities.
As I said earlier in this thread, it is simple in that the spouse of an EU citizen has the right to join their partner AS LONG AS THE EU partner is legally resident here…
I work for and associate with several people with holiday homes here who now have CDS’s, the conversation is always the same - ‘morally we’ve done nothing wrong but don’t talk to me about the legality’.
Tim17 don’t you wonder about their reaction and what will happen when they come ‘home’ one day and find a form from the Fisc waiting for them requesting details of their income and capital gains dating back to the beginning of their residence in France?
I am sure our newest French citizen @JaneJones would be interested in their reaction too.
I’ve long stopped caring what people do, if I did my mental health would suffer. I have an EU based client who rents his house but has not registered with the Mairie and doesn’t declare the earnings, his excuse whilst laughing was - ‘it’s the ******* way’. I have clients whose renovations don’t meet building regs or pool security regs or any sort of regs, I do as I’m asked but always point out the legality in writing before I do any work so there is no doubt where the liability lies. Is it right of course not but works work and fortunately I’ve only got a short time before retirement so it will soon be someone else’s problem.
No of course not!! They can come for the 90/180 days like anyone else. However if they want to stay permanently (or pretend to stay permanently) then they need their partner to be a legal resident here too.
People forget - because France never enforced it - that pre-Brexit British people should only have stayed for 90 days without completing various bits of admin.
I’m not suggesting permanently, but a spouse of a EU-person cannot stay more than the 90 days even if the EU-Spouse is staying a little longer… ???
It just seems a little bizarre to me.
What about the Carte de sejour Temporaire, available for up to a year and renewable…
Exactly, that is the correct route. There is usually one correct route for each specific set of circumstances.
But there is a small amount of cost and hassle involved in taking the correct route, and some people find it hard to accept that. They are firmly convinced that they should be able to do as they like regardless of the rules and regulations.
Phew… thanks for confirming this… I was beginning to imagine couples having to separate because the non-EU-spouse had to go back “early” 'cos the 90 days were up. “no, you can’t stay 95 days - get out NOW!!!”
I know several people which have exactly that attitude despite everyone telling them that they’re going to get caught eventually and they should mend their ways.
I am old fashioned I know but I find it sad when adults choose to do the right thing solely because they are afraid they might caught. That is how small children operate when they are too young to understand the difference between right and wrong. It seems people are not taught/do not learn this any more.
I expect somebody will say “but these are stupid rules” but once you get into the habit of justifying yourself like that, every rule you do not want to obey, becomes a stupid rule.
Jane,
I do not believe I suggested that people are free to choose. I also said it depends on a persons circumstances and they should be encouraged to ascertain their compliance with the regulations. The OECD treaty stands and by this treaty my circumstances are not only accepted by the French Tax Authorities but also the UK. This is in writing from both authorities. I am by no means unique in the situation and there are accountants in the UK who assist with declarations to comply with both authorities. It is unregulated financial advisory firms who have a vested forward financial interest in ‘scaring’ individuals into a path that may not be required.
As an adjunct there is an ongoing problem in that the Tax d’Habitation is still payable by these individuals. It is not valid to discriminate a person under the rules of the OECD Tax Treaty on their tax residence and to do so is a violation of the Treaty. This is the sole overall purpose of the Treaty to protect from that, this will hopefully be resolved in the future but does require some more legal muscle to resolve it.
So to reiterate my original advice. Do not accept the advice of so called Financial Advisors in France without doing your own due diligence as your circumstances may qualify you to remain a UK Fiscal Resident.
and you went on to clarify. It just struck me that a person looking for a way round the visa rules might read that as meaning that it is perfectly OK for everybody to do this regardless of circumstances, and think this would save them the hassle of getting a visa. Whereas in fact, the negotiations with the tax authorities would likely be far more complex than a visa application, and wouldn’t necessarily have the desired outcome.
It will be interesting to see what happens with this. I don’t actually see it as discriminating on the grounds of tax residence - what it does is distinguish between a primary residence and a secondary residence. A tax resident pays TdH on their secondary residences. There are other instances where promary residences are treated differently from secondary residences, for instance for CGT.
