Tax and residency.

[SLB]

Hi all,
Any help on the following would be greatly appreciated.
I shall be moving my family to France in August. My wife and children will be living there permanently, I shall be working in west Africa for six months of the year for at least 2 years. I shall spend some of the time off in the UK (some where between 70 and 90 days a year) and the rest of the time with my family. I have seen a UK accountant and two French accountants, all seem to think I will be exempt from UK tax but nobody seems to know if I am required to pay French tax as my salary will be paid in to a UK account. Also one of the French accountant seemed sure I would not be eligible for French residency (as well as any french medical cover) even though my permanent family home will be in France.
Appreciate some pointers in this regard, many thanks.
SLB

[Bevdeforges]

How's your French? Seriously, tax accountants aside, your best bet might be to speak directly to the sécu (about the medical cover) and the tax inspector for the area where your family is living.
Cheers,
Bev

[giantpanda]

Hi!

Since your family will be living in France, you will be considered as a French fiscal resident. You can take that as a certainty.

Impôt sur le revenu : notion de résidence fiscale

That means you will have to make a calendar year Income Tax declaration of your world income in France per end of May of the following year.

For 2008, you will be required to declare your world income, from August 2008 ytill 31.12.2008, and that by 30.5.2009.
In France you do not get automatically tax forms, unless you have made a previous declaration. So that means in time you will have to fetch the forms 2042/2044/3916 ( and possibly others according to your income ) and fill them, and send them to the local Centre des Impôts ( not the Trésorie, which is only competent for collecting taxes ).

If you pay taxes in other countries, you declare gross and the taxes paid so that in most cases, if their is an agreement between the countries you are not taxed twice. NB. For financial income, you would pay in France in most cases.

Yours,

giantpanda

[SLB]

Hi both,
many thanks for the reply it has give me a bit more information as to which way to head.
Again many thanks
Sean

[parsnips]

Originally Posted by SLB

Hi all,
Any help on the following would be greatly appreciated.
I shall be moving my family to France in August. My wife and children will be living there permanently, I shall be working in west Africa for six months of the year for at least 2 years. I shall spend some of the time off in the UK (some where between 70 and 90 days a year) and the rest of the time with my family. I have seen a UK accountant and two French accountants, all seem to think I will be exempt from UK tax but nobody seems to know if I am required to pay French tax as my salary will be paid in to a UK account. Also one of the French accountant seemed sure I would not be eligible for French residency (as well as any french medical cover) even though my permanent family home will be in France.
Appreciate some pointers in this regard, many thanks.
SLB

A lot depends on where the company for which you work in W Africa is based ,if it is in the UK you will continue to be liable to UK tax on those earnings, which must be declared in France also(but not taxed , only taken into account to calculate your marginal rate.).
There is a possibility that if your employers are UK based you could be eligible to continue paying NIC and your family could be covered for health by the UK ,(contact IR centre for non-residents 0845 915 4811).

[Neat]

Hello, I am currently undergoing an extremely stressful and (in my opinion) unfair tax investigation by the French authorities and I would like to know if anyone here may be able to help me in some way.

I am English and have lived and worked as an expat since 18 years old and have only lived in the UK for a year since that time, although I did visit he UK for about 2 months per year and bought a property in London during this time. My wife who was UK based happened to be visiting the south of france just over 5 yrs ago and fell in love with a lovely french farm house. I flew out to see it when I was on leave and as she loved and wanted the house and I had very limited time I agreed to buy it and the next thing I know we're being marched into the estate agents signing contracts and handing over 10% deposit!!

Once I had time to think it through I knew we had made a big mistake and would have serious trouble making ends meet after raising the deposit and the purchase taxes. I tried to back out of the purchase only to be told that I had signed a binding contract and had to go through with the purchase or I would lose the full amount of my deposit 50,000 euros!

Anyway to cut a long story shorter I purchased the house and two years ago due to financial difficulties (trying to meet the payments on the huge french mortgage) I was obliged to sell our house in the UK and my wife moved to France and took a job for a local estate agent. The next thing I know is that the tax authorities are after me for tax evasion and want an astronomical sum from me in back taxes!! I feel that this is hardly fair as I work overseas in a very difficult and physically demanding job often working 14+ hr days for 7 days a week for on average 9 months a year 12 weeks on 4 off.

I do not consider myself a French resident have never had access to any French services and spend minimal time there maybe 3 months a year maximum. I do pay local property taxes etc. and am incredulous that they would consider me in any way a legitimate target for taxation.

I have lost a huge amount of money on this french house and would have sold it years ago but could not afford to lose the 30% capital gains tax they would demand from me as a non french resident. If the french tax authorities win I will be obliged to sell the house and will probably it seems still be obliged to pay then capital gains tax and will have lost everything that I have worked for over 20 years. I am devastated and desperate can they do this to me and can I do anything at all to fight them?

I'm considering trying to find a competent tax lawyer but don't want to pay what little I may have left to lawyers and realise that it may be better to take the hit however hard and accept that I've hit rock bottom.

Any advice?

[parsnips]

Hi Neat,
First a couple of points:
1. The french authorities are probably claiming you as resident on the grounds that you have your "principle residence" (your farmhouse) in france-in this case they cannot claim CGT from you as the principle residence is free of CGT.

2.How have they calculated the back-tax? Do they have details of your income?-If not, they are threatening you with a "taxation D'Office"-based on their perception of your lifestyle, in order to get you to talk to them.

3. Have you been paying tax anywhere else?-if so check if there is a Double-Taxation treaty with that country. If you have not been paying tax anywhere, then I'm afraid your luck may have run out, and unless you are very wealthy france is as good a place to pay your taxes as any-french income tax is not too punishing,it's the social contributions which are very high and depending on where you work you may not have to pay these.

There are two associations which may be able to assist you:

ADUA the Association des Usagers de l'Administration
and
Contribuables Associés

You should be able to Google them;if you're not a fluent french speaker you should enlist the help of one before talking to them.

[giantpanda]

Hi!

I take it you are of EC nationality ( otherwise, things are more complex ).

According to EC regulations, it is quite clear that you and your family will be a French fiscal resident.
So it mean you will have to declare in 2009

- a French Income tax declaration from August to 31.12.2008, and declare your world income ( and possible taxes you pay elsewhere ). You are nor taxed on the foreign income of already taxed - in Europe - for West Africa if you pay taxes there, I would have to check - but normally not.( except on share dividends or interest ), but the foreign income plays a part in the rate of French taxation uf you have French income ( the % tax you have to pay according to what level you are ).To be filed latest 30.5.2009.

For 2008 income, to be declared latest 30.5.2010, then you have a full year to declare.

Your wife would have to register with the French Health Insurance - I take it she would not be working. She would need an E106 ( from her or you ) which will be valid 2 years after you have stopped working in GB.
However afterwards if you can not bring an E121 ( or if she can not bring it ) she would then have to contract a private Health Insurance , equivalent to CMU coverage ( can costs over Euro 3500 per person per year ).

E121: You get this with a British State pension.

See mail.

Yours,

giantpanda