We are setting up our house(s) at Ivry-en-Montagne so that it can be let as a holiday home but we need advice from someone who can advise us on tax, VAT and registration issues etc and whether or not to run it under a UK company or a French one - so does anyone know of an adviser who may be able to assist us in decision making? They need to be able to converse with us in English or at least Franglais as this area is so complex! (UK or France based). If anyone has experience that they would be willing to share that would be much appreciated (we could telephone to discuss given the contact details etc).

Many thanks


Nick Smith

Email me with specific questions, I have lots of details.

In summary this income MUST be registered in France. Your turnover will determine whether you have to register for VAT or not and it will also determine whether you have to register as a business or not. Provided you only rent out FURNISHED accommodation and you do not provide any services (meals etc) you can declare it straight away on your French tax form. Income from French property is taxable in France even if you are non-resident. If you are non-resident you will also have to declare this income on your tax declaration in your home country as well, but you will not be taxed again if there is a double taxation treaty with France (this exists for all EU countries, but I am not sure about America).

Hope that helps.

Sue

There is a choice of two basic tax regimes in France that you can opt for in declaring any rental income from a Gite letting.

One method is fairly simple in that as a non-resident you would be taxed at about 25% of 50% of the income.

The second method is a lot more flexible in that you can get allowances on your taxable income against costs and expenses. Essentially you can offset the equipment-furniture and the like- as well a depreciation of the property, against any tax liability. This allows you to make a 'book loss' which normally would happen in the first few years and you can also offset these 'losses' against future taxable income for a specific number of years.

Whilst having to also declare any income on your UK form, the double taxation treaty with France comes into play. Whilst theoretically it might mean you do not pay any taxes in the UK on this income as you would have already paid in France; any liability in the UK would depend upon ypur total income and also your own personal marginal rate of tax.

It is best to get professional asdvice on this to ensure you are wityhin the law both sides.

There are a number of companies that will do everything for you in terms of advice, set up and also filling in and filing your French tax declaration for you.

It is also worth noting that the French fiscal year runs from January to December and the UK fiscal year runs from April to March.

Have a look at www.charleshamer.co.uk and have a word with them as they look after most of our friends in the UK and France who run Gites businesses and their fees are very reasonable.