# Tax Query - Advice Please



## Jim David

We have been considering moving to France (to retire). We have a number of questions and queries but the most pressing one is ; Our main income will be from rental properties in the UK. Although we pay tax from any income generated from these properties in the UK. If we were to transfer this money into a French bank account to cover our living etc..costs (which I have been told we would need a French account), would we have to pay tax on this money *again* in France??

Thanks Jim


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## Bevdeforges

The simple transfer of funds from a foreign bank to a French one is not usually subject to any sort of taxes here in France. You may be asked for the source of the funds (usually only if a large amount - but up to the banks involved to define what "large" means in this context).

You will have to declare your UK rental income on your French tax declarations, but there is a special form to indicate the "foreign source" and the Fisc will apply the relevant credit or exemption to the amounts you report. (I've never been certain of the treatment of foreign rental income - perhaps someone here on the forum will have details - though I note there is a section on the form for foreign sourced income to include rental income before any taxes paid abroad, so obviously they have dealt with this before.)


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## Jim David

Bevdeforges said:


> The simple transfer of funds from a foreign bank to a French one is not usually subject to any sort of taxes here in France. You may be asked for the source of the funds (usually only if a large amount - but up to the banks involved to define what "large" means in this context).
> 
> You will have to declare your UK rental income on your French tax declarations, but there is a special form to indicate the "foreign source" and the Fisc will apply the relevant credit or exemption to the amounts you report. (I've never been certain of the treatment of foreign rental income - perhaps someone here on the forum will have details - though I note there is a section on the form for foreign sourced income to include rental income before any taxes paid abroad, so obviously they have dealt with this before.)


Thank you so much for your information. We are keen on France but it has to work financially.* I hear the taxes are high in France?*


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## EuroTrash

UK rental income is taxed in the UK. As Bev says you declare it in France and the DTA is applied. 
I don't think you can say 'taxes are high in this country' or 'taxes are low in this country' because it depends on your circumstances. Probably more household pay no income tax under the French system than under the UK system. On the other hand high earners probably pay more. France arguably has a fairer system overall. But whether this or that individual would be a 'winner' or a 'loser', depends on their circumstances.
When you retire, do you mean reach state pension age or will this be early retirement? Can make a big difference to your tax situation.


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## Jim David

EuroTrash said:


> UK rental income is taxed in the UK. As Bev says you declare it in France and the DTA is applied.
> I don't think you can say 'taxes are high in this country' or 'taxes are low in this country' because it depends on your circumstances. Probably more household pay no income tax under the French system than under the UK system. On the other hand high earners probably pay more. France arguably has a fairer system overall. But whether this or that individual would be a 'winner' or a 'loser', depends on their circumstances.
> When you retire, do you mean reach state pension age or will this be early retirement? Can make a big difference to your tax situation.


Thank you for your information. I am 50 and my husband is 56.


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## EuroTrash

In that case since you won't be eligible for an S1 I believe your UK rental income will be subject to French "social charges" (I could be wrong on this, hopefully someone will correct me soon if I am).


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## Bevdeforges

Jim David said:


> Thank you so much for your information. We are keen on France but it has to work financially.* I hear the taxes are high in France?*


That's what everyone says - but like ET mentioned, it really depends on your circumstances. And consider that the French government gets more of its revenue from VAT than from income taxes. 

But, if you're planning on an early retirement, you'll need to consider both your ability to get the appropriate long-stay visas and the need for private health cover. Once you're drawing a retirement pension, your health cover is provided (though I am not at all certain about the need for an S1 form in order for this to happen. One of the Brits here on the forum who has followed all the Brexit Withdrawal Agreement stuff will have to explain that situation for you).

As you start formulating your plan, please feel free to ask us for advice regarding any questions you have.


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## Clic Clac

Jim David said:


> *I hear the taxes are high in France?*


Not as high as your gas & electric prices. 🤣 

Anyway, it's a small price to pay to escape The Liz Bot ...

and have a dentist, doctor or ambulance available should you need one.


Btw : "Welcome to the Forum". 🤗


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## EuroTrash

Bevdeforges said:


> Once you're drawing a retirement pension, your health cover is provided (though I am not at all certain about the need for an S1 form in order for this to happen.).


No you don't NEED an S1. But I believe that the fact of having one, exempts you from having to pay "social charges" on certain types of income.


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## Clic Clac

Bevdeforges said:


> Once you're drawing a retirement pension, your health cover is provided


Does that include a French pension?


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## Bevdeforges

Clic Clac said:


> Does that include a French pension?


Yes - the CPAM portion at least. If you're drawing a French pension (actually that should be plural due to the way the French pension system is set up) then your sécu cover is paid for by the state. (You still have to get a mutuelle if you want one.)


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## Crabtree

One of the myths in the UK is that the French pay high taxes.Because of the way the tax situation is set up then people on low to modest incomes do not pay a high amount of income tax.
In the O/Ps situation ie living on rental income from the UK whilst living in France the Anglo/French tax agreement applies.So in this case,the O/P will continue to pay tax on the rental income in the UK but will have to declare it to the French fisc and they will receive a tax credit to be offset against any French tax due,so unless it is a large amount then I suspect no tax will be payable in France.Which brings me on to the more important point.If the O/P and or spouse are not EU citizens then they will have to obtain a visa and show that they will have ample income to live in France.This is generally regarded as the French minimum wage (SMIC) which is about €20k pre tax.In addition they will need private health insurance and as they are "inactif" ie not getting a pension they will need to pay 8% of their income for French state health care and a top up insurance as well
So the OP needs to resolve the visa question but having an idea of some of the expenses may help with financial planning.


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## Jim David

Crabtree said:


> One of the myths in the UK is that the French pay high taxes.Because of the way the tax situation is set up then people on low to modest incomes do not pay a high amount of income tax.
> In the O/Ps situation ie living on rental income from the UK whilst living in France the Anglo/French tax agreement applies.So in this case,the O/P will continue to pay tax on the rental income in the UK but will have to declare it to the French fisc and they will receive a tax credit to be offset against any French tax due,so unless it is a large amount then I suspect no tax will be payable in France.Which brings me on to the more important point.If the O/P and or spouse are not EU citizens then they will have to obtain a visa and show that they will have ample income to live in France.This is generally regarded as the French minimum wage (SMIC) which is about €20k pre tax.In addition they will need private health insurance and as they are "inactif" ie not getting a pension they will need to pay 8% of their income for French state health care and a top up insurance as well
> So the OP needs to resolve the visa question but having an idea of some of the expenses may help with financial planning.


*Thank you for the information. Is this 20k per person? I wonder is better to buy something that also has a couple of gites? However I wonder how much is actually made on gite income after gas/electric charges? etc....and I understand that you have to pay more taxes dependant upon the square meterage of a property? *


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## BackinFrance

Jim David said:


> *Thank you for the information. Is this 20k per person? I wonder is better to buy something that also has a couple of gites? However I wonder how much is actually made on gite income after gas/electric charges? etc....and I understand that you have to pay more taxes dependant upon the square meterage of a property? *


To run a gîte you need a visa that gives you the right to work.


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## EuroTrash

As Crabtree says, the first thing you need to do is to look into visas so you know what your options are, what's possible and what isn't.
If you apply for a visa as self supporting inactives, you have to demonstrate that you will be self supporting without any economic activity in France. In fact you have to sign a statement saying you won't work here.
If you apply for a visa that will allow you to be economically active in France, you'll need a solid business plan showing that your business will earn enough for you to live on.


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## BackinFrance

EuroTrash said:


> As Crabtree says, the first thing you need to do is to look into visas so you know what your options are, what's possible and what isn't.
> If you apply for a visa as self supporting inactives, you have to demonstrate that you will be self supporting without any economic activity in France. In fact you have to sign a statement saying you won't work here.
> If you apply for a visa that will allow you to be economically active in France, you'll need a solid business plan showing that your business will earn enough for you to live on.


This seems to be the thread I meant reply to. I would suggest you forget the gîte idea, because if your business plan doesn't work out within the period of your visa (if granted) you can expect to have to return to the UK and start over with a visa application.


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## Bevdeforges

OK, the key question here is: when you say you want to retire to France, are you talking about retiring on your pension, or doing an "early retirement" ? It makes a huge difference in terms of the visa you would need to go for. As a retiree with a pension (even a fairly modest one), you would be looking at a "visiteur" visa, which does not allow you to work in France. As an "early retiree" you would have to show that you have the "financial resources" (generally some sort of income) to enable you to live in France at least until you reach "retirement age" and can start drawing your state pension. Or, you need to qualify for a visa with work privileges, which usually mean that you either find a job in France and let your employer-to-be handle the work permit related part of the visa process, or you qualify for something like the Passeport Talent, which requires you meet the requirements of one of several categories, basically proving that you are starting up an "innovative" entreprise or that you are a highly paid techie or an established/well-known artist of some sort.


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## Crabtree

Smic (salaire minimum de croissance)


Le salaire minimum de croissance (Smic) correspond au salaire horaire minimum légal que le salarié doit percevoir. Des abattements sont toutefois applicables, dans certains cas (apprentis et salariés de moins de 18 ans). Le montant du Smic horaire brut actuel est de 11,07 €.




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