This article is for general information only. You should not act or refrain from acting in reliance of it. You should always obtain professional advice on the facts of your particular case. Nothing in this article constitutes financial advice. The owner of this site accepts no liability.

 

If you are a UK tax resident owning and renting a property in France, you may be subject to income tax in both country.

 

Income tax due in France

 

Income Tax Rate

 

As a non-resident in France, income deriving from the renting of your property in France will be subject to French income tax at the fixed rate of 20% up to €26,070 (in 2022) and at a rate of 30% above this threshold.

 

It is possible to opt for French resident progressive rates of income tax if more favourable. In such case, your worldwide income are taken into account to establish your average tax rate (taux effectif) – and this rate is then applied to your French income only in order to assess your tax liability in France.

 

Social contributions

 

French social security contributions (prélèvements sociaux) will also apply to your rental income. The normal rate is 17.2% - however, you may qualify for an exemption under the post-Brexit EU-UK agreement if you are already subject to social charges in the UK. If so, your French-derived income will still bear a reduced solidarity tax at a rate of 7.5%.

 

Tax base

 

The French income tax rate as well as social contributions will be levied on the net rental income. You can deduct either the costs incurred in the letting of the property or a fixed allowance, whichever is more tax efficient. The calculation of your tax base will hence very much vary depending on your situation. We strongly recommend you seek professional advice.

 

Income tax due in the UK

 

As a UK tax resident, your French property income will also be liable to UK income tax.

 

Attention must be paid to the tax base, which will be determined by reference to the UK domestic rules (deduction of actual costs incurred by the letting of the property) and which can therefore differ from the French tax base. In other words the net taxable income will be different in France and the UK.

 

Difficulties may also arise due to the tax year difference between the two countries.

 

Double tax treaty between France and the UK

 

To avoid the resulting double taxation, you may be able to offset tax paid in France against the UK liability under the UK/France double tax treaty.

 

Please note that if the UK tax is higher, you will have to pay the difference.

 

 

International tax liabilities are highly technical and must be consider on a case-by-case basis.

 

Our international experts will be happy to advise on tax liability and relevant planning.

 

If you own a property in France, you could also be liable to the French property wealth tax, even though you are not French resident for tax purposes.

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frenchtax@da-tax.co.uk

+44 (0) 7922 878 989