Have you paid social charges on UK rental income or Government Service Pensions?

I ask the question because the practice of imposing these social charges is widespread and, in certain circumstances, the tax offices have got this wrong!

No social charges should ever be levied on UK Government Service Pensions paid to UK citizens who are resident in France  – end of story.  This is enshrined in the UK/ France Double Tax Agreement but we are aware of many instances where local tax offices have taken an arbitrary decision to charge these.  We have many clients for whom we have successfully obtained refunds of social charges,  so get in contact if this has happened to you!

UK sourced rental income is, however, a different story.  If you pay UK tax on UK rental income, then there is no legal basis for the tax office to levy social charges.  The tax credit mechanism contained within Article 24 of the UK/France Agreement provides a credit in France equivalent to the French liabilities that would have arisen.  This mechanism applies equally to social charges, so if you have paid these in these circumstances,  then we can help you get refunds.

The situation is not such a happy one for those who have UK rental income that has not borne UK tax.  The new initiative from the Finance Ministry (see my previous article) is imposing French income tax and social charges on this income in 2012.  We have been developing some tax planning ideas for our clients who find themselves potentially facing French tax and social charges as a result of this new approach by the Finance Ministry.

Please email us at [email protected] and we will then contact you to discuss your individual situation.