Advice about renting out a house in the UK, French resident living in France.

4 Replies

Hello everyone, I am considering buying a house in the UK and renting it out. Can anyone who is already doing this explain if there are any pitfalls? What happens about tax, is it declared and paid in the UK on an annual tax return, or you have the rent paid gross without tax and then declare it in France, but if this is the case would I have to pay social charges on the rental income in France? If this is the case then this would of course significantly reduce the yeild. I do hope I have been clear on what I am asking? Looking forward to your replies from people who are already doing this and know how it really works. Thanks

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Replies

chemin vert 1432388082

UK rental income with tax paid in the UK should not be subject to French social charges due to the dual tax treaty. It will, however, need to be declared in France.

JLJ-429896 1432389279

It's a good idea. Peace of mind plus an unearned income not subject to social charges. You need to get a letter from the tax man in the UK to give to your agent or tenant to say that HMRC are happy that you will fill in a tax return every year EVEN IF NO TAX will be paid as your 10,000 personnal allowance will apply to this income. The income then is declared to the French impots very carefully to avoid the social charges. If you don't get this letter the agency will deduct 20% and your tenant should as well if they are particularly well informed. The letter is a formality if you have a previous untroubled relationship with HMRC. If your property is jointly owned both owners will need this letter as both are liable for tax on the rental income. This does mean 2 personal allowances.

JLJ-429896 1432390721

Just to add, as Chemin Vert says, you must declare your worldwide income to  the impots and UK rental income won't be taxed or subject to the dreaded social charges, but might move other income into a higher tax bracket. The Connexion do a good downloadable guide to filling in your French tax form. It's worth wrestling with yourself as professionals offering to do this seem to make mistakes. If you make a mistake as a humble individual you can go and confess your ignorance to the impots who are often very helpful.


Use commercial software to do your UK tax return online as the HMRC don't (or haven't up to now - I haven't done this year's return yet) do the foreign residents page. I use Andica but there are many others and they actually make things very straightforward.

whalebone-429708 1432392226

Thank you everyone for the very informative answers, which is exactly what I wanted.


Best wishes


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