R85 R105

wkt54

Hi

I am selling my appartment in the UK, and want to live in France 9 months a year, 3 in the UK.

I am not working, and in my 50's.

I was going to give my building society a R105, and claim gross interest, which would work out at £7,300 per year interest.

But I am having second thoughts. If I did, I would be eligible to pay tax on it in France, and I don't want to get involved with the French system.

So I was thinking of trying form R85 instead. I would not tell the building society I was staying in France 9 months a year. I don't think they could ever find out.

I take it I would have to pay some tax on the interest, as it is over the tax free earning limit.

Do you think I could do this?

Thanks

BoGoF

You should not be completing an R85, you can only do this if your total taxable income is under your tax free allowance (5225) this year and your interest will be in the region of £7300. It's an all or nothing situation with an R85, you're either a non-taxpayer or not. You cannot register to get gross interest then pay tax on the amount over your tax free allowance. HMRC would promptly de-register your gross payment request for you.

wkt54

Thanks. I thought I would only have to pay tax on the £2,075.

I don't suppose it would be a good idea to put the R105 in and get the interest gross, and not declare my savings in France?

wkt54

PS I will have £100,000 which I was going to put in Halifax fixed rate internet for 9 months.

I have no idea about off shore accounts - would that be an option?

Thanks

jem16

wkt54 wrote: »

Thanks. I thought I would only have to pay tax on the £2,075.

You will only have to pay tax on this but you will need to claim it back at the end of each tax year. As has already been said you cannot register for gross interest unless you are anon taxpayer and you won't be.

Basically 20% tax will be taken off at source and then you claim the excess back.

I don't suppose it would be a good idea to put the R105 in and get the interest gross, and not declare my savings in France?

Can't help you with the R105, sorry. Why not ask on the tax forum?

wkt54

Ok.

So I would receive interest with 20% taken off.

As I am not working, or receiving income support - I would be able to claim back tax on the first £5225 interest?

Is that correct?

jem16

Yes it is.

You may even be able to claim 10% back on the next £2230. This certainly applies to normal income - I'm not sure of savings income although I think it's the same.

wkt54

Thanks Jem.

This is the first time I've used the forum, and didn't know there was a tax section.

I'll ask the same question in Cutting Tax, and see if someone knows about the 10%.

Cook_County

It sounds from what you have said that you will be resident in France (and taxable in France on worldwide income including UK banks, PEPs, ISAs etc) plus you will also be resident in the UK using UK domestic rules.

I recommend reading the UK/France double tax treaty to establish which country then has taxing rights on this income rather than inadvertently evading tax.

wkt54

This is exactly what I was afraid off.

I know that if I spend more than 6 months in France, I would become a French resident.

But I don't want to get involved with the French system.

If I were to pay tax on my interest of my savings, would that mean I could avoid that.

Cook_County

Fiscal domicile in France equates to habitual residence so you will be resident there. If you choose to evade French tax then that would be a criminal offence.

However if you can legitimately take a treaty position on your French tax returns then that would doubtless be OK. All I am saying is that you should legitimately plan.

If you have difficulty understanding the UK/France tax treaty then I recommend you consult a French advocat.