Dual tax – UK and France

aroominyork

My son in a UK citizen (dual Australian nationality but that’s not relevant) who recently started living in France with his French wife. He is a self-employed writer and submits tax returns in the UK. He also has ISAs in the UK and a savings bond that will attract tax when it matures in 2024-25 (ie over PSA). Last year he completed a household declaration in France because of his wife, but was under the tax threshold (but will not be for long).

We are trying to work out how dual tax arrangements work. Does he still need to self-assess in the UK? Where does he declare his earnings – in the UK, France or both? How do the arrangements to avoid paying double tax work – who calculates the correct tax due in each country? And what about the savings interest? Some guidance would be much appreciated.

xylophone

Does this help at all?

https://www.kentingtons.com/news-blog/tax-planning/how-is-income-from-uk-assets-taxed-in-france/#:~:text=The first important detail to,be liable to UK tax.

Bostonerimus1

If he's a French resident then he pays tax in France. How he pays tax on any foreign money and accounts, ie non French, will be determined by French and UK tax regulations and the application of the UK/France Double Tax Treaty. It's bad news on the ISAs as they are fully taxable in France.

aroominyork

Thank both - very helpful. So that means the dividends and income from accumulation ISA Units (a global equity index fund, a global bond index fund, and a money market fund) need to be stripped out and declared in France, along with any capital gain when selling them - is that correct? Does that mean that for simplicity it is best to change them to income OEIC units, or is there an easy way to track income and capital gains in Acc units? (I have always stuck to Inc units in non-wrapped accounts so have avoided this headache.)

Bostonerimus1

aroominyork said:

Thank both - very helpful. So that means the dividends and income from accumulation ISA Units (a global equity index fund, a global bond index fund, and a money market fund) need to be stripped out and declared in France, along with any capital gain when selling them - is that correct? Does that mean that for simplicity it is best to change them to income OEIC units, or is there an easy way to track income and capital gains in Acc units? (I have always stuck to Inc units in non-wrapped accounts so have avoided this headache.)

I don't know how the French tax people tax funds and there might be issues with them being foreign funds outside the protection of a pension covered by the treaty. It's sometimes best to liquidate such funds before changing tax residency to avoid complications and move the funds to where you will be tax resident, but it depends on the cross border status of the accounts with the countries involved. You should ask your question on a British expat forum like this

https://britishexpats.com/forum/france-76/