French income

French income

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The wife of a long standing self assessment client has come into money. She is French and inherited French property from her father. As a result she has property income arising in France and bank income arising in France.

Do the French banks deduct income tax at source on bank interest and if so at what rate?

On an account paying monthly interest will the tax be deducted on each payment as it would be in the UK?

I am sure that she is resident and ordinarily resident. But could she be domiciled in the UK? If not domicle then remittance basis applies I think? If domicile then arising basis.

Normally you aquire domicile at birth. However, if you tried to loose UK domicile you would do what this lady has done but the other way around. Married British man, lived in UK all married life (30yrs), has British children and possibly British grandchildren. So is there a danger that she has become UK domicile?

As far as I am aware, she had no French property or bank account until the inheritance and a large part of the inheritance was brought to the UK. The retention of French property might effect a deemed change in domicile.
David James

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By User deleted
19th Jan 2007 12:04

domicile
If this lady married her husband in 1974 or previously, she would have acquired a domicile of dependency in the UK.

If she has not, and she intends to return to France at some point, and has retained some roots in France, e.g. property, the fact that she currently lives in the UK should not be a problem.

Provided she has the intention of returning to France, even if it is to retire there once her British children have grown up. Then she should be able to argue that she has retained her French domicile.

Of course, she may previously have argued and applied to be domiciled in the UK, which you will have to check.

Basically it all boils down to intention. If she never intends to return to France, even to be buried there, then it is pretty clear she has acquired a domicile of choice in the UK.

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