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Whether you are looking to work or do business overseas, own a holiday home or simply want to spend some time experiencing another culture, you may find some aspect of your life crosses country borders. In terms of tax and accounts that means you need advice and support beyond the UK – which is where our membership of MSI Global Alliance comes in.
MSI Global Alliance is a network of over 250 independent legal and accounting firms in over 100 countries. This month is MSI Awareness month and each week we will be sharing some case studies where we have used MSI to help our clients manage their financial affairs when they started to live or work outside the UK.
A Year in Provence
Mr and Mrs Mayle decided to buy a property in France for their holidays. So that it earned its keep they also decided to let it when they were not there. This meant that while they were still UK residents, they now had a source of income overseas.
As UK residents they are taxable on their worldwide income. Under the UK-France Double Tax treaty the rental income is also taxable in France. Therefore the income was taxable firstly in France as it arises there, and then in the UK. The Mayles then needed to claim relief under the Treaty for any French tax against their UK bill on the property so they didn’t pay tax twice.
We introduced the Mayles to our MSI contact in France. He explained the various simplified accounting systems available to them in France. Each year his team help them to prepare their French tax returns to report the income there, and liaise with us so we can then disclose the income and claim relief for the French tax on their returns here.
In due course, if they decided to sell the property they know that we can work with MSI to establish the correct capital gains tax position in both countries. In the meantime as they think they may want to keep the property and pass it on to children we again worked with our MSI contact to prepare a joint report on their Inheritance tax position either side of the Channel. As part of our recommendations, their legal advisors prepared new wills, taking into account the new EU Succession provisions. In a few years time as the outcome of Brexit becomes clear, we and MSI will continue to work with them to ensure they stay compliant and don’t have any nasty surprises.
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