The annual tax return needs to be completed by May in France. Financial expert Jennie Poate explains how to complete the paperwork and what’s required, leaving you to enjoy the good life in France.
Basic tax returns for expats in France
Many British expats who are resident in France will have some income derived from the UK. If this is the case and you’re one of them, to start with, you’ll need to complete some forms (download forms from the French Government website).
Pink Form 2047 is used to declare income earned outside of France.
Blue Form 2042 is for all income earned – including revenue declared on the Pink Form 2047.
The tax year runs from January to December so if you arrived in France part way through the year, you only include income from the time you have been resident.
The first time you file your tax returns, you will have to collect the tax forms from the tax office or Centre Des Impots. After that, they should be sent out to you automatically.
Even if all of your income is taxed or paid in the UK, or you are below the threshold, you still have to complete a tax return form if you are resident in France.
In general, as French tax residents you are obliged to declare your worldwide income and assets to the French authorities. Importantly, with the ‘exchange of information’ rules now operating between European countries, the French tax authorities will receive information about income and gains earned from non-French sources. Whilst this takes time to work through the system, it is important that any information they receive corresponds to an entry on your tax return.
Expats in France with Pension lump sums
You need to declare lump sum payments received from non-French pension schemes. Whilst these would usually be available tax-free up to a certain limit (normally 25%) if you were a UK tax resident, such lump sum withdrawals are taxable in France for French tax residents. The lump sum will be taxed at a flat rate of 7.5% after having benefited from an allowance of 10%.
This can be a bit of a grey area. Generally only if the whole pension fund is taken is there a tax rate of 7.5%. Otherwise it will be considered as part of your income and taxed at your marginal rate. In reality most tax offices seem happy to levy the 7.5%!
The only exception would be a lump sum received from a military or civil service pension. Whilst this must still be declared, albeit in a different box on your form, the terms of the double tax treaty* should ensure that it is not taxed.
Declaration of all foreign bank accounts and life assurance policies
It has been a requirement for many years to declare on your income tax return the fact that you hold bank accounts or Life Assurance Investments outside France.
You have every right to have as many of these as you like, as long as you give the details to the authorities. For bank accounts, there is a specific form 3916. You should use a form for each account, or you can simply list the details on a separate sheet of paper. The latter is normally easier and the authorities simply want to know the details of the policy or account, the name and country of the bank/insurance company, and the name of the account holder(s).
*Double Taxation Treaty France and UK
There is a tax treaty between France and the UK meaning that you cannot be taxed twice. You’ll need to fill in a form SI2009 France Individual which you can download from the Gov.UK website. You can only complete it once you are officially resident and paying tax in France.
The information on this page is intended only as an introduction only and is not designed to offer solutions or advice. Beacon Global Wealth Management can accept no responsibility whatsoever for losses incurred by acting on the information on this page.
The financial advisers trading under Beacon Wealth Management are members of Nexus Global (IFA Network). Nexus Global is a division within Blacktower Financial Management (International) Limited (BFMI).All approved individual members of Nexus Global are Appointed Representatives of BFMI. BFMI is licenced and regulated by the Gibraltar Financial Services Commission and bound by their rules under licence number FSC00805B
