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Taxation of client living in two countries

Taxation of client living in two countries

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I have a self employed client who has homes in both UK and France. He also receives a pension. During 2010/11 he spent 7 months in France. Can he therefore claim a 100% deduction on his tax bill for being out of the country for over 6 months? If so, how does one go about this using the online HMRC software. If he does so does he then have to declare income in France and pay their tax?

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Euan's picture
By Euan MacLennan
12th Jan 2012 17:22

What is the 100% deduction?

You are not suggesting that he is not resident in the UK, are you?  Unless he has gone abroad to work on a job that spans a complete tax year (which 7 months obviously could not be) or has left the UK with a settled intention to live in France (which he obviously has not as he spends 5 months a year in the UK), he remains resident in the UK for tax purposes and is therefore liable to UK income tax on his worldwide earnings.

Where does he undertake his self-employed trade?  If some or all of it is in France, he will certainly need to file a tax return in France as well as one in the UK.

I am not familiar with the French rules on residence, but I suspect that he might be considered as resident in France if he spends more than 6 months in France in a calendar year.  Again, he would need to file a French tax return.  You would need to look at the Double Tax Agreement to see what income is taxable where.

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