nazza

Hi Clive, thanks very much for your comments, hmmm, we will contact their helpline directly in this case. We have not submitted the return yet, as we're waiting for HMRC to send my partner her paye coding notice, and we won't do so until we've spoken with someone. In any case, it sounds simplest if we just take the tax hit and ask for reimbursement in France, but I'm wondering why HMRC takes this interpretation in this case. I do suspect the advice we were given must be based on a prior precedent or perhaps updated guidance, but perhaps not in the case of France as the other country.

So my partner contacted HMRC via the online chat service and got transferred to an adviser who specialises in double taxation. Here is a short excerpt from their conversation that I paraphrase: Me: Hi I'm resident in the UK but I receive interest on a bank account in France that's taxable. I get taxed by the French authorities and I was wondering if I can get tax relief on the amount that the French have taxed me in the UK. According to this thread in your community forum: https://community.hmrc.gov.uk/ customerforums/sa/52f29f3a-d127-ee11- a81c-000d3a8751e3 I am able to claim relief on my self- assessment form for the amount of tax the French have applied. Is this correct? Agent: Yes you may declare the foreign interest and tax paid on the foreign income page. You may then claim foreign tax credit relief. Me: Ah, so I don't need to claim that tax relief from the French authorities but I can claim it here in the UK? Agent: That's correct if you have already paid the tax in France then you will claim the relief here. Me: ok, that's very helpful, when I explain my situation on the self-assessment form, is it possible to link to our conversation or just something that indicates that I have followed official hmrc advice in preparing the tax return? i don't know if our conversation has an internal id that your colleagues can reference? Agent: If you give me your details I can leave a note on the record regarding the advice I have given you. So it very much sounds like my partner won't need to claim the tax back in France but is able to claim it as relief here in the UK. She's going to do that and I will report here if all successful for future reference.

Hi Clive, thanks very much for your comment. So that was the accounts' view too but then I came across this post that raised a similar point and the HMRC admin person there appeared to suggest we can in fact claim tax relief in the UK on money taxed at source in France: https://community.hmrc.gov.uk/customerforums/sa/52f29f3a-d127-ee11-a81c-000d3a8751e3 Did they mean to imply the relief needs to be claimed in France? The wording of the reply seems to suggest relief can be claimed in the UK on the income tax charged only. Thank you

Hi, Trying to help someone complete a tax return and I'm struggling with the section where they have to declare any foreign income. They have a savings account in France that returns some interest annually that the French authorities tax at 12.8%. My understanding is that when declaring this on the self-assessment form, because 12.8% is under the 15% that the UK has a negotiated with France in the double treaty, they can offset all of it (i.e. they can claim foreign tax relief on the full amount). However, an accountant they have spoken with says the double taxation agreement between the UK and France means the relief does not apply here. To illustrate this with more concrete sums, suppose this account returns £3000 in interest which we declare as foreign income. The French tax it at 12.8% (or £384) and they also apply a social contribution levy at 17.2% (or £516), meaning the net amount my friend receives is £3000 - £384 - £516 = £2100. I believe my friend can offset all of the paid tax, meaning the amount that goes in the "Foreign Tax Credit Relief" section is £384 (and so the pay whatever final amount of tax gets calculated, minus £384). Is this correct?