Where am I a resident?
Posted by: Letters to Editor in Uncategorised on
Jul 31, 2010
I’m British but I’ve wandered the world a lot and finally decided that the Riviera is the place I’d like to settle. Never having been in one place long enough to call myself a resident I am now wondering in which country I should put down as my official "home". I presume I could choose Britain or France at will. Any guidelines?
Name withheld by RR, by email
Set as favourite
Bookmark
Trackback(0)
TrackBack URI for this entryComments
(3)
Subscribe to this comment's feed
Show/Hide comments
...
written by Mike Meade , 01 August 2010
written by Mike Meade , 01 August 2010
You can't really choose "at will" and it's not legally possible to be a resident "nowhere". It would mean that more than one country could possibly lay claim to some of your taxable income. Real circumstances establish your legal country of residence and authorities usually consider four criteria. The first will be where you spend the bulk of your time. If that is inconclusive because you move around a lot then it's your personal and financial links (family, job) that will be considered as a second resource. If that is not certain then they will try to establish where you most often spend time - even if it's not where you spend most of your time. The last thing to be looked at is your nationality. If none of the other criteria can be seen to apply, it's the country that issued your passport that will be considered your residence for tax and other reasons. M.M.
...
written by Mike Meade , 01 August 2010
written by Mike Meade , 01 August 2010
Blevins Franks has put an important article on their web site explaining why Britons need to make a "distinct break" with the UK for non-residency status:
http://www.blevinsfranks.com/N...tails.aspx
http://www.blevinsfranks.com/N...tails.aspx
...
written by MikeP , 01 August 2010
written by MikeP , 01 August 2010
Whilst all of the above is sound, there are many ways of interpreting the 'rules' and each case will be considered on its merits or demerits. Whichever country you are in will want you to be tax resident (taxable) there, so whilst the UK will try to argue that you must pay tax there, France will say that you shoud pay tax in France, and so it goes on.
Certain elements of your UK income, if any, remain taxable in UK even if you become fiscally resident in France, for example rental income incurred in UK. This will still need to be declared in your country of residence, but may be mitigated by a 'dual taxation' treaty' meaning that you do not pay twice, but you may have to pay the difference if the rate in the UK were lower.
There is also the concept of Domicile, a concept which exists under English (and I do mean English, not British) law, and which has nothing to do with residence. It is possible to have been Non Resident NOR) in the UK for tax purposes for your entire life, but to still remain UK domiciled. It only really matter when you are dead but you can take steps to change the situation or reduce IHT and death duties whilst you are alive.
In France there is also wealth tax, payable on your global assets above a certain amount (I forget exactly but it's in the region of Euros 750,000).
It's an absolute minefield and you will get different opinions from everyone you ask.
You really need to talk to a good finanacial adviser, there are many around whom I would not trust, and a few whom I would trust.
Certain elements of your UK income, if any, remain taxable in UK even if you become fiscally resident in France, for example rental income incurred in UK. This will still need to be declared in your country of residence, but may be mitigated by a 'dual taxation' treaty' meaning that you do not pay twice, but you may have to pay the difference if the rate in the UK were lower.
There is also the concept of Domicile, a concept which exists under English (and I do mean English, not British) law, and which has nothing to do with residence. It is possible to have been Non Resident NOR) in the UK for tax purposes for your entire life, but to still remain UK domiciled. It only really matter when you are dead but you can take steps to change the situation or reduce IHT and death duties whilst you are alive.
In France there is also wealth tax, payable on your global assets above a certain amount (I forget exactly but it's in the region of Euros 750,000).
It's an absolute minefield and you will get different opinions from everyone you ask.
You really need to talk to a good finanacial adviser, there are many around whom I would not trust, and a few whom I would trust.
Show/Hide comment form