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Double Tax relief when tax years are out of sync

Double Tax relief when tax years are out of sync

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Good morning

I wonder if someone could clarify this for me:

A UK resident sells a property in France in March 2014 and has property income until that date. Tax years in France are calendar years, so the French tax liability for his 2013 property income has been calculated by the French accountant. However he doesn't know yet how much tax will be due on his 2014 income. He wants to claim foreign tax credit via his self assessment for the whole of the French tax accrued to March 2014 (as next year he won't have foreign income to offset it against). How does he go about it? 

Any comments appreciated.

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By Chipette
22nd May 2014 12:31

I suggest he goes and ask the

I suggest he goes and asks the French accountant for an estimate of the tax accrued.

I am right in thinking that DTR is the liability accrued as opposed to actually paid in the tax year?

 

Thanks for any advice.

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By Chris08
22nd May 2014 13:21

Provisional numbers


As you will appreciate, DTR is only available for actual French taxes paid, and you will not know what these are until after the French tax return has been filed.

Deadline for filing the UK return is 31 January 2015, but I presume it is unlikely the French accountant can finalise the 2014 TR within one month of their tax year end.

Therefore, you should use provisional figures, and declare them as such on the UK tax return.  Then,when the 2014 French return has been filed you can repair the UK return - having until 31 January 2016 to do so.

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By Chipette
22nd May 2014 13:30

Thank you Chris, that's very helpful.

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By godwinsj.hotmail.com
22nd May 2014 13:54

Tax payable

Hi

 

Doesn't the DTA refer to French tax payable? So it doesn't have to have been paid yet.

Assuming that the client no longer has income in France , you could calculate the liability today

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By Chipette
22nd May 2014 14:12

Hi,

This is true if they are under the "MicroBIC regime simplifie". But I assume not as they are using the services of a French accountant, in which case computations are probably different to UK ones.

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By godwinsj.hotmail.com
22nd May 2014 14:51

Agreed

Hi

 

Yes I agree that they would need the accounts prepared (if not under Micro BIC),but that could be done shortly and before the tax return is due?

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By Chipette
22nd May 2014 15:04

Thanks again,

I will check whether accounts can indeed be prepared sooner. 

Also trying to find what the guidance say re DTR claims (tax payable as opposed to tax actually paid).

(And then I will move on to CGT calculation and claim for the Capital Gains resulting from the disposal - but that's another question!)

 

 

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By godwinsj.hotmail.com
22nd May 2014 15:10

Article 24

a)French tax payable under the laws of France and in accordance with this convention

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