My client, a UK domiciled and UK national individual has emigrated to France. This is intended to be a permanent move.
He has retained his UK property which is being let out. The Double Tax Treaty confirms that the income can be taxed in the UK and so in accordance with normal UK tax rules, as this is a source of UK arising income I will declare it on his UK tax return.
He has however said that he intends to "pay his taxes in France" and so does not believe that he needs to declare the rental income in the UK. Surely this cannot be correct? It is UK arsing rental income so surely will be (potentially) subject to income tax in the UK?
He is also in receipt of UK pension income and in this respect I am confused by the wording in the Double Tax Treaty. This suggests in Article 18, that subject to para 2 of Article 19, "pensions….paid in consideration of past employment to a resident of a Contracting State shall be taxable only in that state"
This would seem to suggest that the taxation of private/former employer pension income will be determined by the residence of the individual. So once my client has become resident in France, this pension income will be taxable ONLY in France. Am I reading this correctly?
As far as the UK State Pension is concerned, Article 19, para 2 states "Pensions….paid by….a Contracting State….shall be taxable only in that state…."
If my reading of this section is correct, this suggests that the UK State Pension will be taxable ONLY in the UK, irrespective of the residence for tax purposes of my client.
If anyone is able to provide any clarification I would be most grateful.