French Property Income

French Property Income

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My client keeps saying that the french holiday letting income is not taxable as the letter to her from the french company says "in compliance with article 6 and also in view of article 5, paragraphs 2(a) and 2(b) of the Uk/France double taxation convention the commercial revenues are only subject to taxation in France"

Surely it must go on the Uk return with an allowance for French Tax which is not shown on the statements i get

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By godwinsj.hotmail.com
11th Jan 2011 10:51

French Taxes

It should be declared in the UK and you should be able to get the amount of French tax paid from there Avis D'impots (French Tax assesment)

 

 

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By Cirius di Lemma
11th Jan 2011 12:10

France DTA

Article 6 isn't relevant as it specifically excludes income dealt with under Article 5 (income from immovable property).  Article 5 effectively provides that it is permissible for both countries to tax the income with credit relief as indicated in the previous post.

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By chancewind
11th Jan 2011 17:02

French Property Income

Unfortunately i do not have an Avis D'impots, the client has a holiday villa on an organised site and the site deal with the lettings and give her money at the end of the season and it is the agents that say it is only subject to taxation in France so i presume they pay over tax as agents? Have you dealt with anything like this. 

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By godwinsj.hotmail.com
11th Jan 2011 17:20

Yes

The Client would have to complete a French Non residents tax return by June each year and pay any tax due.

 

By the way I am an Accountant based in France

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By foxtrot
13th Jan 2011 12:55

Foxtrot

The references quoted are to the 1968 DTA which has been superseded by a DTA in 2009

Section 6 of that DTA relates to  immoveable property and says that property "situated in a contracting state may be taxed in that state" - so  French property income is exposed to French tax

Not sure whether this overrides a UK resident's tax liability on world wide income, but if if doesn't the DTA doesn't seem to get us any further than we would be if there were no DTA

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