The UK/France Tax Treaty

What about the UK/France Tax Treaty?

Doesn’t that stop you paying too much tax?

Whilst the treaty between the UK and France means that the same income or gain is not taxed twice, not all income or gains are taxed in both countries. The problem is, if you don’t know the rules, you can end up paying more tax than you need to do if you are paying it in the wrong country.

Also, where income or gains are taxed in both countries, although you can offset the tax paid in, say, the UK against the tax due in France, if the tax payable in the UK is higher, you will not get a refund of the difference in France. So ideally, if you can avoid paying the higher UK rate altogether, you can reduce your tax bill this way. However, just not paying the UK tax is not an option, so you need to take advice to make all of your income as tax efficient as possible.

In some cases, however, relief from double taxation is given in a different way. Some types of UK-source income are not directly taxable in France, but must be declared thereas it is taken into account to calculate the rate of tax payable on other income which is directly taxable in France.