As a French tax resident, you are obliged to report your worldwide earnings (even if they have been taxed elsewhere) and this includes any UK rental income that you may be in receipt of.
This does not however mean that France will actually tax this income.
France and the UK have a double taxation agreement which specifies which country has the right to tax an income type.
As per Article 6 of this agreement, property income is taxable in the country where the property is located.
Therefore, should you have property in the UK and receive an income from this property, this income is subject to UK income tax and it should be declared to the UK authorities.
Having said that, as a French tax resident, you must also report your UK rental income to the French tax authorities as part of your French tax return (ie. the one done this spring concerning income in 2017).
It is crucial that this income is reported correctly, so that it benefits from the provisions of the double taxation agreement and is not subjected to French income and social taxes.
We are often asked to rectify tax assessments as either the declarant has misrepresented the nature of the income on the return they presented or their tax office has incorrectly subjected their UK rental income to either or both of French income and social taxes.
Therefore, the key points to remember are:
– That all your earnings and capital gains (arising in France and elsewhere) in a given tax year must be declared in France, and
– They need to be reported according to the respective double taxation treaty provisions and French tax law, so that only your French taxable income is subjected to French income and social taxes.
This question was answered by Olaf Muscat Baron who is a Fellow of the Chartered Association of Accountants UK, a French expert comptable and an International tax advisor. He is the principal accountant of Fiscaly, an accountancy firm based in the Dordogne.
See www.fiscaly.fr or call 09 81 09 00 15