Today is:
Service France
Please note that taxation and national insurance is a complex subject and you should not take or refrain from taking any step without full independent advice on the particular facts of your case. The content of this article is of a general nature and no liability is accepted in connection with it.
There are two sides to tax planning: the negative side - ensuring that you know enough about the tax implications of what you are intending to do and have taken these into consideration - and the positive side - arranging your affairs to gain the maximum tax efficiency.
It regularly does not occur to clients that they can, very simply, and entirely legitimately, make tax savings. There is a view that tax planning is only for wealthy sophisticates, that it is risky and that it involves moving to an expensive tax haven. It can be all of these things, but it need not be any of them.
The Government is successfully closing tax loopholes in a way no government before has done. For example, one morning in December 2003 it announced that the forthcoming Finance Act would introduce an income tax on the use of assets previously owned, with retrospective effect. So there is now no easy onshore way of circumventing the inheritance tax "reservation of benefit rules". Also, firms marketing tax avoidance schemes must now notify the Inland Revenue of this.
So where can tax savings now easily be made ? In one of two areas: either by reliance on well-founded loopholes, such as the remittance rule for the non-domiciled - or, alternatively, by the application of double tax treaties. The advantage of these latters is that, firstly, in seeking to reconcile two non-identical (to say the least) systems, there will always be gaps; and secondly, these gaps can only be closed following a process of tortuous negotiation - which often opens new gaps in closing the old, and which gives tax advisors plenty of notice. For example, the new UK-France Treaty required 14 years of negotiation and it has been published well in advance of its entry into force. Although this date is not disclosed in advance, we now know that it will not be before 2007.
These gaps can often be utilized by those buying property in France; a fortiori, by those moving there. As a learned author has said: ".a change of residence often provides extraordinary tax planning opportunities for tax planning . it is wasteful to let the opportunity slip when it does arise".
These savings can be very considerable and are usually simple. Many do not involve the use of trusts or expensive planning. In some cases clearances that tax is not payable in both the UK and France can be obtained in both countries. You need specialist advice not only on the tax law but more importantly how it is applied on a day-to-day basis, especially in France, and this is where Sykes Anderson LLP and its dedicated French tax team provides a unique service.
Paying for tax planning advice could save you more than it costs you. It is important however to give a tax advisor enough time to put arrangements in place to ensure that the opportunity is maximised.
Sykes Anderson advises on tax planning with particular focus on the UK-France Double Tax Treaties.