We have recently given away our UK house and surrounding land. We are still living in the property but are no longer the owner. We have no financial gain from this. We have owned a French property for over 10 years. Will this change our Tax fancier and Tax habitation? I plan to move to France later this year.
Taxe d’habitation is calculated differently for tax residents and for non residents (although sometimes the answer is the same). The key date is 1st Jan, so if you become tax resident in France during 2017 and you submit a declaration of worldwide income to the French tax people in May 2018, for your income between the date you moved to France and 31.12.17, your taxe d’habitation for 2018 will be calculated on the basis of your tax declaration.
Any property you, as a UK tax resident, may own or not own in the UK, is of no interest to the French tax office.
Hope that answers your question.
I thought that second homes in France pay a higher rate of Taxe Fonciere and Taxe Habitation.
That depends on the commune, some do and some don’t.
You may be thinking that the fact you no longer own a property in the UK and your house in France is the only house you own, automatically means that this now becomes your primary residence, but that’s not the case, it will remain a second home until you move to France and meet the French residency criteria. As a UK resident, by definition your primary residence is in the UK.
The “main home” concept is quite important in France because it has various fiscal implications. Whether you are an owner occupier, a tenant, or living rent free in a property, is not a factor in establishing which your main home is, It’s not at all unusual someone to own a house in the country which is their second home, and rent a flat in town which is their principal residence. Your principal residence is where you run your life from/spend most of your time/the address your car is registered to/etc, and most important of all, the address you use for your income tax returns. In practice, the fisc will only recognise it as your principal residence once they’ve processed a tax return from you at that address.
Anna - not entirely sure about that one…up for discussion.
Physical presence is not the primary factor in determining fiscal residency. If there is any doubt, it simply comes down to the accurate determination of your ‘centre of activity’ be it personal, monetary or both. Naturally the worth of your global assets plays a huge part in determining this. So, if for example, the bulk of your assets are located in one country, that alone could possibly trigger fiscal residency in that country.
I guess my question would be - is Barbara actually a UK resident now she has no property there? As we know, it’s not just about counting days!
Why would she be a French resident if she’s living in Britain?
My house was a second/holiday home for almost 20 years before I moved here full time. I never received a reduction in property taxes during that period. For most of that time it was my only property and I lived in rented accommodation in another European country.
I cannot see that “not” owning where you live means you are no longer resident in that country…
Woops…I did say it’s open for discussion…just throwing it out there.
Maybe my previous post was just rubbish…it has been known!
Just asking questions.
@anon88888878 …OK so you’re a litter lout… and I’m the Park Attendant…
Regarding French property taxes…not sure why the OP thinks anything should/might change…
but, when they get here in France… they should trot along to the Mairie and tell them they are now here to stay… get on the Electoral Roll… and do all those other important thingies that are part of being here full-time… yeah
I get what you’re saying but nothing is going to change automatically is it, just simply because on paper Barbara has given her UK house to her children. .
If she wanted the fisc to agree to regard her as fiscally resident in France and HMRC to agree to regard her as fiscally non-resident in the UK, she would have to initiate it. In theory I guess it would depend what she still has in the way of income and investments in the UK, but in practice getting out of HRMC’s clutches is like getting out of a thorn bush; once you’ve been resident there then the residence test seems designed make it difficult to be classed as a “leaver” if you still have "ties in the UK (family, accommodation etc) and you still spend time here. For the purpose of the UK residency test, it doesn’t matter whether you own your accommodation or rent or stay with family, it just has to be available to you, and the number of days you can spend there without being classed as resident is in inverse proportion to the number of ties you have to the UK - can be 30 days a year or fewer. But it’s hypothetical really because if you start muddying your residence status you risk finding you have no healthcare entitlement when you need it, which could cost a darn sight more than the difference in taxe d’habitation, so it makes no sense.
Thank you for your replies, it sounds as if moving to France in September is not a good idea! I was planning to go back to work after raising a family. I have no UK earnings since the late 1980s. Perhaps I should look for work in the UK.
Has anyone discussed whether your moving to France would be a good idea? I thought the thread was about whether your local taxes would be affected by your previous holiday home now being the only property that you own.
Please don’t think that, I wasn’t at all meaning to put you off moving to France, sorry the discussion got off-track!
I think the point we were making really that if/when you move, it’s important to plan it properly so that your status is clear and everyone concerned knows where you live, when you moved there and what your status is. There are very specific EU / bi-lateral treaty rules on which country’s social security system is responsible for you in what circumstances, where you pay your taxes, what benefits you’re entitled to, etc, and the rules mainly hinge on your residential status. So if there’s confusion over where you live, there will also be confusion over what your entitlements are.
One thing to bear in mind is that moving to France means leaving the UK, and leaving the UK means leaving the NHS and possibly losing entitlement to certain UK benefits. If you’re coming to France to look for a job, make sure that you will have a route to healthcare while you’re looking.
To get back to the original question - If/when you move to France, then if you’re on a low income you will very likely pay less taxe d’habitation, possibly none at all after next year if Macron keeps his promise. This is one of the benefits France gives to its taxpayers.
Hi Barbara… going back to work after raising a family, is to be applauded. What work would that be… just asking…
Watch out for asset stripping rules.