In all the excitement of moving to France, it’s easy to forget things, including the dreaded administration requirements. Making sure you enter the French tax system correctly as a tax resident is vital. But it doesn’t need to be as difficult as you might think, says Jennie Poate of ABC-EU. She explains how French tax returns work for new expats so you can relax…
Moving to France on a permanent basis
If you are intending to live in France on a permanent basis, then you will need to complete a tax return. The tax year runs January to December. If you arrived permanently sometime in 2023 you should complete your first tax return in May 2024.
It’s your responsibility to obtain the forms from the tax office, don’t expect them to arrive automatically. And, be aware that there is only a short window to complete them and each region as a different deadline date.
Form Filling
There are a number of forms to complete for new arrivals and we recommend that you visit the tax office in person to collect them. You might want to get a tax professional to complete your first return so that you have peace of mind. You’ll normally receive the response from the tax office in August/September of the same year.
Remember you don’t have a choice as to whether you declare your income here or not. There are a strict set of rules confirming this.
However, you will find the DTA or Double Taxation Agreement between France and your country of origin will dictate what gets taxed and where, although all forms of income must be put on the form. Some types of income will remain taxable in the country of origin but will still need to be declared in France.
UK Tax Form
If you have moved from the UK, you will need to complete a form P85 from Revenue and Customs. This is a notification to UK tax authorities that you are leaving the country and it will help to ensure that you’ll be taxed appropriately. Find more details here on the UK Gov website
French Tax Forms
In France, you are taxed as a household rather than individuals (except in the case of co-habiting, in which case you will have separate returns to complete). You will qualify for additional allowances if you have children, are registered disabled or over 65.
You will get an allowance before income tax is charged.
If you’re keeping your home in Britain or elsewhere and renting it out, your UK rental Income will remain taxable in the UK. But, it must be declared on your French tax return (as there is a dual tax arrangement bet-ween the UK and France, it won’t be taxed twice). You will need to complete this form.
By the way, check your existing insurance policy, it may not cover the rental of the home. If you’re still paying a mortgage on the property, you should also let your mortgage provider know you’re moving.
All income needs to be declared on your form. This includes pensions, UK deposit accounts, ISA’s, share portfolios and even Premium Bonds. All investment income will be taxed at 30% – a special income tax and social charge rate.
Tax return time is a good time to review your finances. You may find that what was set up in your home country may not be tax efficient now you are in France and you could end up with products that are much like a square peg in a round hole!
A good financial adviser will be able to explain all the taxes applicable in France and analyse your existing investments. They will explain how you are taxed and whether there is anything more suitable for you as a French tax resident.
Getting your tax return right first time will save heartache later on and may save you paying large penalties…
If you’d like to find out more or have questions about how to maximise your investments, contact Jennie for an obligation free consultation at: jennie@abc-eu.com
This communication is for informational purposes only based on our understanding of current legislation and practices which is subject to change and is not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. You should seek advice from a professional adviser before embarking on any financial planning activity. Whilst every effort has been made to ensure the information contained in this communication is correct, we are not responsible for any errors or omissions.
ABC-EU are members of Nexus Global (IFA Network). Nexus Global EU is a division of Blacktower Financial Management (Cyprus) Limited (BFMCL) and Blacktower Insurance Agents & Advisors Ltd (BIAAL). ABC-EU is an Appointed Representative of BFMCL which is licensed and regulated by the Cyprus Securities & Exchange Commission (CySEC) – Licence No. 386/20. ABC-EU is an Appointed Representative of BIAAL which is licensed and regulated by the Insurance Companies Control Service (ICCS) – Licence No. 5101
