My hubby and I have bank accounts in the UK that generate interest, we know we need to pay tax on this in France. We both have S1’s so know we won’t have to pay the 30% flat rate. Does anyone know what % we pay if we have S1’s?
Hi you should qualify for * Prélèvement de Solidarité (Solidarity tax) – 7.5%
This is the 17.2% element of the CGT (30% total 12.8% Tax 17.2% social)
So 12.8% Tax and 7.5% social charge - 20.3% total.
Just filled out our tax form, it seems we’re only paying about 12% on our interest. Does this seem right, we checked and double checked our form as did our accountant friend.
That will be just the tax - should be declared on your 2047 as capital gains made overseas. Then at the end of that annex there should be the different boxes for social charges and it’s the box which relates to my post above. I am not an accountant and haven’t submitted a tax return with an S1. Most of my clients have worked in France and don’t qualify. If you are unsure you can ask the tax office. Or when you submit at the end you can select to add notes. I would explain you have X gains from interest and hold an S1 so your understanding is you qualify for reduced social charge to 7.5% on capital gains made overseas. They will likely make the amendments and if when you get the return back in Aug/Sept you can check to make sure it adds up. Hope this helps… good luck
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Thank you Ill do that
Is it the case that our earned income is treated separately to unearned income? If it is, as I suspect, then the 20% on unearned income would fit with the amount of predicted tax we were told we need to pay when we filled in our form online.
Obviously Dave is the expert here but that is most definitely the case! Very different rules and allowances pertain.
Earned income still attracts social charge except the health care part because you have an S1 the state where your pension is based is covering health so that part isn’t applied to income. Also a different sliding scale for pension income based on the amount of pension income the household receives. Just to make it a little more complicated! I even pay someone to do my personal tax return. I am fairly well informed as I have to be to advise my clients but sometimes the right advice is to pay a professional accountant. That said the information is there but in lots of different places and different situations means different reliefs and approaches to declaration…
Thanks, I do get someone to check my return to make sure all is ok. I have read quite extensively myself, as I like to make sure I understand it all, it’s only become more complicated this time around as higher UK interest rates meant the interest on our savings is rather higher than in past years. They have been so low in the past, we paid tax on a paltry sum of interest and didn’t really notice it.
Yes alot of people in the uk now need to declare this income as bank interest is paid gross and the personal savings allowance in the UK ranges from £1000 per annum to £0 for ART payers.
At the moment with the exchange rate around 1.17 it might be a good ideas to exchange to Euro and add money to Livret A and LDDS bank accounts as both pay 3% at the moment with no need to declare or pay CGT. Per person that’s €35k into easy to manage assets and fully liquid.
Cash still isn’t doing great vs inflation so if you have more that 6-12 months emergency capital plus coverage for any large planned expenses then it may be an idea to review the surplus. Reinvesting this into tax efficient accounts might be suitable for you… obviously a lot to consider on an individual basis but worth thinking about.
There are tax efficient accounts that are French compliant and offer investment in GBP if you feel the rate might get better in the future.
A bit of growth, tax efficiency and reduction of admin are all good things to work towards.
Thanks for the info. I have been looking a using the Livret A and LDD combo now that interest rates in the UK are coming down. I’m just waiting for my fixed term to mature so I can free up some money.
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