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Post by taffy on Apr 22, 2024 22:39:18 GMT 1
If ajm is addressing me - I resent being told I am cheating, even in a garbled post. You appear unable to have a civilised discussion, for whatever reason.
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Post by ajm on Apr 23, 2024 8:07:59 GMT 1
I am only trying to be helpful. I follow the advice I have been given for many years by an English accountant specialising in French tax and now, as he has retired, by a French Chartered Accountant dealing with French tax issues. I have 2 accounts with NS&I. an income bond and premium bond accounts. They both provide me with income. Why should one be taxable and not the other?. I don't like paying taxes like everybody but I am happy with the advice I get. You takes your pick!
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Veem
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Post by Veem on Apr 23, 2024 13:43:28 GMT 1
'While ISAs are tax-free in the UK and allow gross roll-up, they are not if you are a French resident and they would be subject to French taxation on any gains each tax year, and when you make any withdrawals.' Wiki
I have been advised in the past that as my ISA gives me no actual income, unless I make a withdrawal or close the account I have no reason to declare any income. Because the balance can show either an annual gain and indeed a loss (as was the case on a very significant level in 2008) that advice makes sense to me. Please can anyone enlighten me if I am right in not declaring an annual income on this specific account? I have had this ISA since 1997 - does that make any difference?
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suein56
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Southern Morbihan 56 Brittany
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Post by suein56 on Apr 23, 2024 15:03:40 GMT 1
It seems to me that any gain you might make is theoretical unless you make it concrete by closing the account or by withdrawing some of the gain as profit/income without closing the account. As you haven't done this I don't believe you have anything to declare.
But I am no expert.
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cernunnos
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Post by cernunnos on Apr 23, 2024 16:07:13 GMT 1
Any interest on any interest bearing account is income , so needs declaring whether you take it out of the account or not. It is better to declare it each year and pay less tax ( or none )than declare it in one go later and pay a higher rate of tax.
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Post by elsie on Apr 23, 2024 17:20:51 GMT 1
I'm not an expert either, but an ISA is no longer an ISA in France! It is just a wrapper for either a cash savings account or the equivalent of a unit trust. So if you are paid interest or get a dividend (rather than an accumulation) in France you need to pay tax on that each year. It also means you if you disposed of it then I think you would need to declare the gain from when you first owned it rather than when you moved to France (there are potential allowances for the time held).
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suein56
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Southern Morbihan 56 Brittany
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Post by suein56 on Apr 23, 2024 21:39:28 GMT 1
Because the balance can show either an annual gain and indeed a loss (as was the case on a very significant level in 2008) that advice makes sense to me. I made my comment based on the words Veem used above .. 'the balance of the investment can make a gain or a loss - as in 2008' .. I am not aware that any Interest bearing account made a loss even in 2008 so I assumed what she had was not a simple interest-bearing account but smthg else.
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Veem
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Post by Veem on Apr 24, 2024 8:52:46 GMT 1
The ISA I have is in the UK. Its value depends entirely on the value of the shares in which my investment my capital is invested. That means its value can fluctuate reflecting the value of those shares, which can indeed fall as well as rise. As a non resident UK citizen I cannot add to this ISA. Nor can I make my husband an 'internal power of attorney', which I recently tried to do. All I am permitted do is make withdrawals and thus far I have made none. In 2008 the balance fell substantially, reflecting the fall in share values on a grand scale.
It reminds me of the fruition of a specific covenant I held on a piece of land that I sold in the UK. Until certain conditions prevailed the covenant was worth no more than the paper it was written on. But when those conditions were met, instantly it triggered the terms of the covenant and I benefited from a large sum of money as uplift on the value of the land. Because this was not viewed (either in France or the UK) as 'profit' and was described legally as a 'chose en cours', the gain was exonerated from CGT in both countries.
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Post by mangetout on Apr 24, 2024 9:12:11 GMT 1
'While ISAs are tax-free in the UK and allow gross roll-up, they are not if you are a French resident and they would be subject to French taxation on any gains each tax year, and when you make any withdrawals.' Wiki I have been advised in the past that as my ISA gives me no actual income, unless I make a withdrawal or close the account I have no reason to declare any income. Because the balance can show either an annual gain and indeed a loss (as was the case on a very significant level in 2008) that advice makes sense to me. Please can anyone enlighten me if I am right in not declaring an annual income on this specific account? I have had this ISA since 1997 - does that make any difference? I came unstuck on this. I too thought that ISAs were tax free here but after 5 years the French tax office called me in and said that Natwest had declared the interest I'd received and that it was indeed taxable. They went back 3 years and readjusted my liability. This included my tax habitation. The upshot was that it cost me 10k euros.
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Post by lindalovely on Apr 24, 2024 9:36:05 GMT 1
I don't have any ISAs and haven't done for a while. I always thought that they were only allowed for UK residents? When I had my Barclays bond I used to declare the interest annually, which was very little usually. I do have an Assurance Vie registered in Ireland. I have to declare it's value each year but there is no liability for tax until I start to draw it down. (Hence why they can be good investments if you don't need the money immediately). I have since closed all my UK savings accounts so this year should be a bit easier. I am deliberately keeping my Barclays current account open with zero balance in it to give them the hassle of closing it and not me.
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suein56
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Southern Morbihan 56 Brittany
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Post by suein56 on Apr 24, 2024 9:38:23 GMT 1
This included my tax habitation. But taxe d'hab was abolished years ago - your home is your main residence so why are you paying taxe d'hab ?
Edit : Just checked and it wasn't finally stopped so many years ago but gradually diminished - it all depended on your area and your income. That's me rushing in again and jumping the gun.
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suein56
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Southern Morbihan 56 Brittany
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Post by suein56 on Apr 24, 2024 9:40:40 GMT 1
I always thought that they were only allowed for UK residents? You can keep them but you can't add to them as you are no longer UK resident. If you receive any income (which would be tax free in the UK) then it needs to be declared here.
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Post by leclairon on Apr 24, 2024 11:09:29 GMT 1
I have this battle every year with a UK ISA which was taken out before I came to France so am allowed to keep it but not add to it However, they renew it "fallow/dormant" every year so I can't get into the account to see the interest. They tell me I must just add £10 a month to it to keep it alive. They even send me letters telling me I should add to it. I have to phone up to try and get the annual interest to put on the tax form here and it takes a good while to get the interest figure and explain that as a non-resident I can't do what they suggest, and that is add £10 each month. The last pleasant young man said the best thing was for me to go over and open a simple current account (again not possible) and do a direct debit each month into the ISA. They know I am not a UK resident, have all my French address details. They assure me that the money is safe, if dormant, so I just get the interest figure each year and leave it at that. I would like to be able to go into it online periodically but can't do that.
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Post by mangetout on Apr 24, 2024 12:45:38 GMT 1
This included my tax habitation. But taxe d'hab was abolished years ago - your home is your main residence so why are you paying taxe d'hab ?
Edit : Just checked and it wasn't finally stopped so many years ago but gradually diminished - it all depended on your area and your income. That's me rushing in again and jumping the gun.
You're quite right, this house is my maison principale. Infact, it is and always has been my only home. The period in which this episode occurred was in the tax years 2005, 2006 and 2007. The reporting of the interest by Natwest to the French tax authorities happened in 2008. It had the effect of pushing us into a higher tax band as well as the recalculation of our tax habitation. On top of that we had to pay interest on the tax which hadn't been collected as a result of the error. And then we were fined. Not at the highest level available to the tax authorities, somewhere in between the highest and the lowest. Since then we have been 'controlled' when an input error made by the tax office led them to believe we had made a false declaration. Not a pleasant experience. But I am scrupulous in declaring every last penny and knew I had nothing to fear. They finally admitted an error had occurred, but this was relayed by telephone. They refuse to confirm in writing. Overall not a good experience, but I manage the situation by believing that if I have done nothing wrong I have nothing to fear. I know at least a handful of expats in my circle who knowingly don't declare all of their income. I try to advise them of the danger in doing that, but it has led to me being 'cancelled' by some. I strongly believe in everyone paying their taxes. If 10 people go to a restaurant but 4 refuse to pay, the other 6 pay more. That's the way I look at it. But there's nothing I can do about it.
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Veem
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Post by Veem on Apr 24, 2024 12:52:04 GMT 1
I believe the difference here is that there are several types of ISA. There are cash ISAs which accrue interest. Then there are others (like mine) which are based on my initial capital being invested (by the company that manages my fund) in shares around the world. This type does not pay dividends or interest - just like any shareholding.
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