Hi Jane, Here’s my very delayed reply to your question about allowances…
I asked if people calculate and declare UK rent profit in France using the amount calculated for each tax regime i.e. UK and France, using each country’s respective methods and allowances? Or calculate the amount using the UK tax regime, perhaps adjusting the period e.g. Jan – Dec for France?
You replied that do the latter and asked what respective allowances?
So one example was in the UK you get a tax rebate for mortgage payments and in France they would allow you to deduct the payments from rental income - appreciate you may not have a mortgage.
In France there is a flat rate deduction allowed of 30 or 50% depending on whether property is furnished or unfurnished and various maximum levels of income.
Of course whether France tax authorities would allow French methods and allowances to be used to calculate the UK income would be a question.
They may well take the approach that the UK profit (or loss) should be calculated using UK methods- which is what you do, except you said you did an adjustment to align figures to January to December for France?
I’ve just done my UK tax return for April 2020 to 21 and in fact have a small loss for this year - next year will be back in profit, so that was why I posed the question - do I use the UK loss this year for France 2021 – i.e. declare nothing and then declare the April 2021 to 22 UK profit figure as France income in 2022? (and possibly deducting my finance spend as well).
Or like yourself do some sort of adjustment for the period. I appreciate that once one determines a method one should stick to it and that may be run it past the France tax office before finalising the 2021 declaration. As I didn’t have any rent income in December 2020 I didn’t declare any in that, my first, return. In fact I was considering selling it instead to avoid the CGT but changed my mind.
Being able to utilise a 50% flat rate deduction on UK rental income would be very attractive - I presume it would be down to the individual tax officers to decide?
Finally appreciate this might be better posted in the Filing UK tax self assessment.- UK rental income thread but it is all about filing in France though! Maybe one can cross reference?