2. Top Tips: Personal Taxation in France

• Everyone who is resident in France is obliged to submit an income tax return, even though you may below the income threshold at which the tax becomes payable. If you are not sent a tax return to complete, then you need to obtain one.
• Even if you are non-resident, if you earn income in France, you are required to make a tax declaration to the French tax authorities.
• If you have any doubts about your residence status, and you do not wish to become resident in France, you can minimise the risk by continuing to own a property in your home country, and spend at least 183 days a year there.
• It would be a mistake to assume that France is necessarily a high tax country. Those who retire to France are likely to be pleasantly surprised at just how little in taxes they will pay.
• If you are relocating permanently to France and you are a UK national in receipt of a private sector pension, annuity, interest or royalities from the UK, then you can apply to HM Revenue & Customs to obtain relief at source from taxation.
• Interest on foreign bank accounts within the EU and certain other countries, is now reported to the French tax authorities, but there are steps that can be taken to obtain some privacy on foreign banking arrangements.
• Tax is collected in arrears in France so, before you spend all the lovely lucre you may have earned in the year, remember you need to set aside some of it to pay the taxman the following year!
• If you choose to use professional advisors, make sure they are registered in France, or risk that you will have not have recourse against them in the event of their negligence or professional misconduct.
• Despite the fearsome reputation of the French tax authoritites, you would do well to get to know your local tax office and use them as a free source of assistance and advice.
• Consider a mortgage on your French property to get relief on income tax (if it is your principal home), reduce potential liability to wealth tax, and charge interest costs against rental income (if you rent out the property).
• There are generous tax and social security allowances on dealing in shares, provided you keeping your activities below €25,000 per year.
• Undertake energy saving measures in your home and get a tax credit of up to 50% on the equipment/materials.
• Place some of your savings in government regulated bank savings accounts to receive exemption from tax and social security contributions on the interest.
• Consider taking out a life insurance policy, which has good tax advangtages.
• Rent out unfurnished accommodation and get a tax break of 30% against rental income. Or charge actual costs (including mortgage interest) against rental income.
• Even better, rent out furnished accommodation – and get an allowance of 68% against income. Or charge actual costs (including mortgage interest) against rental income.
• In addition to income tax, there are separate social contributions and a social welfare levy that are payable by all residents, although EU expats of retirement age escape payment of these charges on their pensions.
• Make gifts of cash and property to your family as part of an inheritance planning strategy.
• In particular, consider the gift of the reversionary interest in a property you own, whilst you continue to enjoy a life interest.
• Get relief from the local property taxes if you are on a low income.