French House

If you have decided to buy a property in France getting your tax affairs in place will be one less thing to worry about.

The Inland Revenue has a list of Frequently Asked Questions hidden away on their site.

It is reproduced below and answers such questions as residence status, tax on property income and building society accounts…

The Inland Revenue has a list of Frequently Asked Questions hidden away on their site.
It is reproduced below and answers such questions as residence status, tax on property income and building society accounts…
In what circumstances would I become non-UK resident if I left the UK?

Normally if you leave the UK permanently or for 3 years or more or to work abroad full-time, you will become not resident and not ordinarily resident in the UK if
your absence from the UK covers a complete tax year (i.e. 6 April to 5 April), andyou spend less than 183 days in the UK during the tax year, or
your visits to the UK do not average 91 days or more a tax year over a maximum of 4 years.
(For visits to the UK, days of arrival and departure are not normally counted as days spent in the UK.)

Second option i to choose an Ibiza luxury villas rental in Spain and enjoy the low tax pressure. Of course you need to be resident in Spain.


What do I need to do, as I am going to live or work abroad?


Inform your local Tax Office and ask for a form P85 and leaflet IR138.
When I go to live or work abroad, will I continue to pay UK tax?
If you remain resident in the UK for UK tax purposes, normally you will be taxable on your income arising in the UK and overseas. If you become non-resident, you will normally only be taxable on your income arising in the UK.

Can I choose to pay tax in the UK on UK source income rather than in my country of residence?

If a double taxation treaty is involved, the country in which you pay tax will be determined as a matter of fact and not choice.
More information on Double Taxation Treaties.

Will I have to pay tax in the country to which I go to live or work?

The country to which you go to live or work may tax you on your world-wide income. This will depend on its own laws. You may need to ask the tax authority there for advice.

Why am I paying tax in the UK on my income when I am no longer resident there?

Income arising in the United Kingdom will remain liable to United Kingdom income tax. However, depending on your nationality and where you live you may be eligible to:
make a claim for repayment of United Kingdom Income Tax. More information on Double Taxation Treaties.
make an application for exemption from United Kingdom Income Tax. More information on Double Taxation Treaties.
use any personal allowances to which you may be entitled to offset some or all of your tax liability. More information on Personal Allowances.

What happens if I decide to let my UK home/property whilst I am living or working abroad?

You will be taxable on any profit you make in letting your property. Normally the rent should be paid to you after deduction of UK income tax at the basic rate but you may apply for the rent to be paid to you without deduction of tax.
Please ask your Tax Office for leaflet IR140 and form NRL1.
If gross payment of rent is approved, you will still be liable to tax on your net profit.
Self Assessment tax return will be issued to you to enable you to account for the tax due.

When I go to live abroad I will begin to receive a pension from my former employer. How will this be treated for UK tax purposes?

Normally the pension will be taxable in the UK. It may also be liable to tax in the country in which you live. If so, you may be able to get relief under the terms of any double taxation treaty between the UK and the country in which you live.