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To whom do I pay my tax to?

Reader's query about where he has to pay tax.

1 September 2016

After my divorce it is likely that my wife will keep possession of the UK property (registered in her name) and I will keep the house in France (registered in joint names). I work in various parts of the world about 6-7 months per year and spend 2-3 months in the UK and 2-3 months in France. My income is taxed at source, in whichever country I am working. I am non-resident for tax in the UK and keep within the 90-day limit. I am not a resident of France but, now that my circumstances are changing, it could be interpreted that France will be my primary abode. Do you think that would be so, and what are the consequences for tax? K.

Every person is and has to be fiscally resident in one country. Where you pay tax is of no conse- quence to where you are considered to be fiscally resident, although the tax paid in those countries is taken generally as a credit against the liability of the country in which you are resident. One of France’s criteria for residency is having a home so if your French house is your only home, then yes, you will be treated as a French fiscal resident and be liable to taxation in France on your world income, the foreign tax you paid being taken into account in your French income tax assessment. You need to be aware that, if you are not an employee paying tax at source, then you may well also be exposing yourself to French social security charges.

Reader's query answered by Hugh MacDonald

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