Hi
We have a rental property in the Uk which we have always declared on the French tax return but which has always been taxable in the uk and thus we haven’t had to pay any social charges in France although it has been included in the ‘revenue fiscal de reference’ for tax calculation.
This year, when I completed the tax return we were asked for an “attestation” from the Uk tax office saying that tax was payable on this income in the uk. The UK tax office in the UK told me that they had no knowledge of this requirement and that it shouldn’t be necessary because of the treaty. So instead, I sent a copy of the tax calculation from the UK which is £0 as it’s not a lot of income and it falls below our tax allowance in the UK. So now we are being charged 216€ per month in social charges for the UK property income in France.
I had an informal chat with a tax expert in the Uk who told me that we shouldn’t be paying social charges in France and the following from the Blevins Franks website/
“UK rental income and government service pensions are not directly taxable in France, but you still have to include them as part of your taxable income – a credit is then given for the French tax and social charges liability. This applies even if no actual tax is paid in the UK. Conversely, UK bank interest earned by French residents is taxable only in France. With UK dividends and real estate gains, tax paid in the UK is offset against your French liability. If your French tax bill is higher than the UK’s you will pay the difference.”
Has anybody else had this issue?? Have things changed this year??
That’s rubbish! No attestation needed. Rushing to prepare things for people arriving tomorrow but if no one else pops up with the clause from the double tax treaty I’ll look it out later in the afternoon.
No I’m not a pensioner, I work pretty much full time as an English teacher. It’s possible that I’ve made a mistake on the tax return and I do have an appointment with the tax office on Thursday morning but I just wanted to make sure that I know what I’m talking about before I go in. We’ve been here for nearly 19 years and we’ve had the rental property all that time without any problems previously.
I have a property that I rent out in the UK and can confirm that it is taxed in the UK and dealt with in France as per what you quote from Blevins. So taxed in the UK and 0 tax and social charges on the rental income in France. I have declared the UK rental income now on the last two French tax returns.
All very familiar.
Since arriving here in 2008 we have always declared uk rental income to both Uk and French authorities and been treated as tge Blevin explanation.
This year for reasons only known to our local Impots we were not given the usual credit against social charges and having a number of properties in the uk yiu can imagine my horror when looking how much tax France wanted.
Needless to say I contested the judgement and eventually normality has been restored. No attestation was necessary to submit but just up to date uk tax returns.
My advise is when submitting french tax computations in April/May 2023 for year 2022 make sure they are accompanied with uk tax return showing rental income right up to date ie uk tax year 2022 to 2023. It does require completing uk tax forms very early but it will show you have paid uk tax for the french tax year 2022.
Thanks for that, it’s maybe complicated by the fact that we don’t actually pay tax in the Uk because the income is quite low and therefore below the level of our personal allowances. I did give the French tax office a copy of the Uk tax return but it says 0 to pay, so I wondered whether that’s why this has happened (they’ve never asked for any evidence before now).
It makes no difference if you are under or over the personal allowance threshold in the uk.
It would be the same if it were the other way around and you were living in the uk and declaring French property income in France. Exactly why the double tax treaty was agreed.
You need to appeal your case.
May be a heads up for those with overseas income, as the economy tightens we may find greater scrutiny on our tax returns. Not an issue if one has been above board but it might involve more paperwork than previously.
Not sure any of us are in that league! HMRC has a large team of inspectors that survey the half million “wealthy” tax papers, those who pay higher rate tax. For the rest of us there is a small handful that do spot checks!
All automated now Jane. Anomalies spotted and letters issued without human intervention. A quick tweak of the all powerful algorithm and thousands can receive demands for “attestations”.
Tax authorities are looking for coins down the back of the sofa at the moment, so I won’t be surprised if I’m asked for proof of tax paid abroad where just a declaration sufficed before. The issue comes when the form of proof required doesn’t tally with the form of proof the foreign tax authorities issue. I’ve had that one before.
This thread has come when I am thinking about my declaration of rental income for this year first rental declaration so I hope I can jump on it as several people who have done declarations have posted.
I’ve decided to use the route of declaring the actual amount of rental profit calculated on the 2021-22 UK tax return.
I have read in grahams text guides from last year (Credit to Isabel want)
Declare rental amount in section 4 2047
Then 8TK on 2042
Presume NOT 8TI “revenues exonneres mais retenu pour le calcul de taux effective” because the France / UK Double tax treaty has the relief through generating a French tax credit - and amount to be declared without deduction of UK tax
Then boxes 4BE & 4BK on Form 2042
Only though is isn’t box 4BE the simplified return I.e. an automatic deduction is applied for expenses?
For declaring actual profit could it be
Régime réel, revenus fonciers imposables 4BA,
dont revenus de source étrangère ouvrant droit à un crédit d’impôt égal à l’impôt français 4BL ?
Just a thought…
Also someone posted last year as follows -
“Who knows whether I do it right, but for the UK rental it’s on the 2047 on line 5/51 and then I just transfer profit over to box 5EZ/5FZ. French rental is 5NZ/5/OZ”
Are you talking about France rather than UK? As only a small percentage of people actually submit a tax return in the UK so not sure what would be automated?
