SOME THOUGHTS ON THE POUND TO EURO EXCHANGE RATE FOR TAX PURPOSES

The problem is that there is no official rate quoted by the fisc, because in truth the average rate is not what should be used to calculate the exact euro equivalent of income or gain.  Strictly speaking, a conversion rate should be applied each time an event occurs.  Of course this isn’t practical, so tax offices tend to be happy with the ‘accepted’ average rate.

The problem is that different sources quote different rates, purely because there are so many different ways of calculating the average.  Do we use the opening rate and closing rates of the year and divide by two?  Or should it be the monthly average, or maybe daily average.  Until a couple of years ago I was comfortable with using this page which uses the monthly average.

 A couple of years ago, The Connexion started quoting a rate which didn’t follow this system.  They say they were told to do the simple  start/finish calculation.  That gives  this years rate as 1.2578, whereas the rate I have used is 1.2203.

Information supplied by…
John Lansley
The Spectrum IFA Group
2 Place du General Leclerc
11300 Limoux
Tel: +33 (0)468 311410 Mobile: +33 (0)642 239495

French Tax return dates 2017

This year’s  deadline for the  “paper”  version of your tax return is Monday, May 17, 2017 (midnight).
From Tuesday, April 12th, 2017, taxpayers can declare their income on www.impots.gouv.fr, in which case  you will receive additional time to do so, according to your place of residence. Online declarations are expected to become obligatory in 2019, unless it is a first declaration. (Or unless you don’t have a computer!)

May 23rd 2017 at midnight for the departments numbered 1-19
May 30th 2017 at midnight for the departments numbered 20 to 49
June 6th, 2017  at midnight for the departments numbered 50 to 974.

Deadlines for taxpayers residing abroad as above.

NB In 2017, those paying tax on income from 2015 which is greater than € 28,000 must file their tax returns electronically at www.impots.gouv.fr.

A very general look at your income tax obligations in France

The French tax year extends from 1st January to 31st December.
It is up to you to complete your own tax return (la déclaration des impots) and hand it in for the deadline, usually on or around 31st May. Failure to meet the deadline could mean a fine of up to 10% of your unpaid tax bill, and the French tax officials are not known for their charitable acts!

To ensure it is received, hand it in yourself at your tax office or send by recorded delivery.
You may opt to pay in three equal instalments (tier provisionnel) or 10 monthly instalments (mensualisation) by direct debit.

Tax residents should simply visit their local tax office (Hotel des Impôts) to arrange this, whereas non-residents with tax obligations in France should contact the Centre des Impôts des Non-résidents, TSA 10010 – 10 rue du Centre – 93465 Noisy le Grand Cedex. Telephone: 0033 (0)1 57 33 83 00 – E-mail: nonresidents@dgi.finances.gouv.fr

Once you have made your first submission by collecting and returning your tax form to your local tax office, you will be ‘in the system’, and pre-completed forms (déclarations préremplies) should be sent to your home automatically, with the previous year’s details already filled in.

It is worth taking advice from a tax professional, particularly if you have ‘world wide wealth’ to be sure of taking full advantage of the Income Tax Treaty (agreement between countries regarding taxation) where applicable, and that you are not missing out on any tax concessions (relating to childcare, school-age children, purchase of a ‘green’ car, mortgage interest on a principal residence………)

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  1. The question of what pound-euro exchange rate to use for the tax declaration .

    For those of us that have had to transfer UK funds to France during the year to meet French expenditure commitments the Connexion simple average between two dates method is not very favourable !

    I think there is an option to the individual transfers to specific expenses but ofetn we transfer a lump sum when the rate seems favourable rather than specifically for one expense .

    A moving average would seem a “fairer method” . I tried the site you suggest to find how you calculated 1.2203 but it didn’t work for me .

    Using a standard currency exchange site (https://www.oanda.com/lang/fr/currency/average )
    I get

    Date de début: 1/1/2016 Devise de base: GBP
    Date de fin: 31/12/2016 Taux interbancaire: 0%

    EUR
    Moyenne
    bid 1.22448
    ask 1.22515
    ( my calculation ) simple average = 1.224815

    This gives about 3 centimes to the pound less than the simple Connexion average rate so declaring £1000 of UK income using Connexion would incares your tax liability by about 30 euros .

    The other alternative is to take the date of any UK income to declare and use the rate on that day . This should be relatively easy for regular payments like pensions .

    Any other thoughts, comments ?

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