How is the tax calculated?
How is the taxe d’aménagement calculated? We have a historic building in a conservation area which we have restored. We had to use local stone and specific paint colours to comply with the rules. It is for a holiday-let and not for us to live in. A.S.
This one-off tax is levied on all building work requiring planning authorisation and covers construction, reconstruction or enlargements. It is charged both by the commune – or an intercommunal body – and the department. It applies on all work of more than 5m2 where the height of the room is greater than, or equal to, 1m80 – but not terraces and open pergolas.
The calculation is as follows: you multiply the number of square metres by a base value, which is currently €860/m2 in the Ile de France region and €759/m2 elsewhere. The figure obtained is then multiplied respectively by a percentage rate set annually by the commune (usually from 1% to 5%, though in some cases up to 20%) and by a rate set annually by the department (not more than 2.5%). Added together, these give the amount of the tax. There is a simulator at: tinyurl.com/y5bsyut8.
There are reductions and exemptions, including one for main homes, which obviously does not apply in your case, and another related to listed historical buildings, which may be relevant to you. The latter can be either a reduction or full exemption and may be subject to certain limits. It can be activated by a decision of local councils and can apply to one or both of the communal and departmental parts.
You would have to ask the mairie and departmentmental council, in writing, to check this.
Will S1 forms continue in future?
We are pensioners living in France with S1 forms for healthcare. Will this continue after the Brexit transition period and will we still be eligible for exemption from social charges on our UK pension income? Will friends arriving soon benefit from the same when they draw their UK pension? C.R.
The S1 system is to continue after Brexit for those who are covered by the Withdrawal Agreement. This should include yourselves and your friends, as long as they are established as residents in France before the end of 2020. It does not matter if your friends start receiving their pensions (and S1 forms) at a later date.
Therefore, on the basis of how things stand currently, you and your friends will benefit from the same exemption to the social charges as the status quo will continue for you. Newcomers to France, arriving after January 1, 2021, are not expected to be entitled to S1 forms as this is an EU scheme - unless otherwise decided in the ongoing future relationship talks. This looks increasingly unlikely.
Fined for paying by cheque
I have received a demand for €15 each for 2019 because I paid foncière and habitation property taxes for my French second home by cheque. I was not notified that this is not permitted. I cannot set up a payment via my bank as I have not been in France. Is it legal for the authorities to be able to refuse payment by a certain method? D.B.
The French Fisc (tax collection service) in most cases asks that taxes are paid by a one-off direct payment from your bank account authorised via the impots.gouv.fr website, or by setting up monthly direct debit on-account payments.
For the property taxes, cheques are no longer allowed for a single payment over €300 and are not allowed for paying any monthly on-account sums. There is a charge of 0.2% if you do not respect this. Also, most tax offices want cheques to clear, not to be received, by the due date. Any organisation – such as many shops and restaurants – can refuse a certain means of payment, such as cheques.
You are not required to do anything directly with the your bank to pay at a distance. You can make a one-off payment or set up regular instalments from your bank, via options in your personal space on impots.gouv.fr. If you have never set up an account because you do not declare income to France, read how to do it with only your numéro fiscal (shown on your bills) at this link: tinyurl.com/y6ljhyjt. It is also possible to make a one-off payment via the tax website without a personal space with only your numéro fiscal - see tinyurl.com/pgvpvqa.
Why were social charges levied?
I have a British and an Irish passport. My wife is French. We were both paid through the Northern Ireland Department of Education and retired to France. We applied for S1 certificates which we presented to our Cpam health authority and tax office. I am not entitled to opt to be taxed in France on my teacher’s pension. My wife was able to avail herself of that option. We are taxed as a couple and I obtain a tax credit. We were surprised last year to receive a large bill for social charges. The tax office has since asked for proof that we were not a burden on the French health service at certain dates. A.S.
Article 19 of the UK/France Double Tax Treaty states that “government” pensions, which include teachers’ pensions, are only taxable in the state paying them, with one exception. This is where you are a national of the other state (ie. France) and not of the paying state (the UK) and you are a resident of the other state (France). So the latter would apply to your wife if she has no British nationality.
On social charges on UK pension incomes, under the treaty there should be none applied on your UK-taxable government pension. As for whether they could be levied on your wife’s, there is an exemption on overseas pension income if you are not a burden on the French assurance maladie, which is the case as you have the S1 form. With regard to proving you are not a burden, the main issue should be the start date of the S1 certificate.
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The information on this column is of a general nature. You should not act or refrain from acting on it without taking professional advice on the specific facts of your case. No liability is accepted in respect of these articles. These articles are intended only as a general guide. Nothing herein constitutes actual financial advice.