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French Legal Issues
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 08/05/2008, 20:34
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Lilly
 
Joined on 23/08/2004
Dordogne
Posts 77
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Re: Definition of 'domiciled'
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I have a question, when someone has just recommeded that you should make it clear that you have moved permanently to France and this also implies that this is preferencial, I must ask that since it would appear that French IHT allowances thresholds are significantly lower than the UK's therefore you will start to pay upwards of 20% above a base allowance of something like 49,000 euro after 15,000 euro and then this climbs depending on your relationship to the deceased and his or her permanent residency and how long they have lived in France, How does it benefit to "make it clear that you have permanently relocated to France"?
Don't forget that the estate pay IHT over a certain threshold , sorry a little out of touch but ie: £300,000 ish on the UK assets
Although I have asked questions myself in this forum on these issues it really can't be stressed enough that you must speak to an expert in both countries legalities and even then then ask more questions as I recently found out that a vital bit of information was never asked for ( how long has the donner / recipient lived in France) by an "expert" but after further investigation on my part to HMTO found this to be extremly relevant as of yet I do not know the outcome but it has given me grounds to put forward. It didn't occur to the "expert" to ask as his usual clientel were only ever in France. The benefit as I understand it that under 3 years residency in France the French tax office MAY deem the donner as non Resident. I appreciate this may not affect many people out there but its worth knowing.
As always take professional advice.
And final note to any of you with elderly parents that are here in France with you take advice sooner rather than later!!!!!
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08/05/2008, 21:06
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ams
Joined on 07/08/2007
Posts 273
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Re: Definition of 'domiciled'
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Nothing of the sort has been implied, rather you have taken your own interpretation. if one follows your logic then one should move to a country that has no IH tax.
ams
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08/05/2008, 21:49
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Lilly
Joined on 23/08/2004
Dordogne
Posts 77
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![Beer [B]](/cs/emoticons/emotion-22.gif)
Re: Definition of 'domiciled'
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I don't know what you are interpreting from my post, and I certainly did not feel that I was expressing my opinion or sense of logic mearly asking a question based on a statement that I had read from your post.
"To prevent any problems make it clear that you have permanently relocated to France"
No one likes having to pay Taxes especially IHT as the whole subject is usually about your own death one day or the fact you have lost someone.
The only logic that I feal I have stressed is to seak very professional advice and when making the preparations to move to France with elderly parents consider the inheritance tax implications and make any appropriate arrangements. But as always these sort of things are not at the forefront and perhaps rightly so, but if I have managed to highlight the fact that it is unfortunatly worth considering, then all the better , forewarned is forearmed
I don't see how it warrants a comment like one should move to another country without IH tax or maybe that was'nt the implication.
go have one
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09/05/2008, 7:38
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ams
Joined on 07/08/2007
Posts 273
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Re: Definition of 'domiciled'
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When reading a post which is in response to a particular question it is always advisable to read the question first and then the response in that order. Your approach is selective. Do try reading the question and the response before respoding. In fact the last line of my response seems to be invisible to you.
ams
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09/05/2008, 8:32
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ams
Joined on 07/08/2007
Posts 273
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Re: Definition of 'domiciled'
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Keep on trying, good for the body and !!!!
ams
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09/05/2008, 9:12
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Scooby
Joined on 25/09/2007
Peak District
Posts 244
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Re: Definition of 'domiciled'
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Domicile and situ of assets at the time of death are the relevant factors for UK IHT purposes. Your domicile (of origin) for UK tax purposes will be the domicile of your father. It used to be the case that a women took her husband's domicile on marraige but that has now changed. It is possible to change your domicile (domicile of choice) but as has been stated above it is not as simple as expressing an intention to move or, indeed, actually moving permanently to a new country. It is based on your circumstances - i.e. whether or not you can have been considered to have severed all ties with your domicile of origin. There is no statutory definition of 'domicile' so HMRC / the courts will look at a variety of facts when deciding on your domicile. If you retain any ties with the UK e.g.:
- have a residence in the UK
- keep other assets in the UK e.g. cars, boat, plane etc
- hold UK bank accounts
- retain membership of UK clubs or societies
- have business ties with the UK
- have close / dependant family members in the UK
- retain UK citizenship / a UK passport / driving licence
- have a burial plot in the UK...or have expressed an intention to be buried in the UK
- have a will that is written under UK law
- you cannot speak, fluently, the language of your country of chosen domicile
or you have only lived in you country of domicile of choice for a short time, then the UK tax authorities may consider you to continue to be domiciled in the UK even though you moved abroad before your death with the intention of living there permanently.
The burden of proof rests with the individual and HMRC will contest your domicile of choice on the basis of the above - particularly if your estate is of sufficient size to merit their interest.
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09/05/2008, 9:26
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Pickles
Joined on 23/08/2004
Posts 174
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Re: Definition of 'domiciled'
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 postie wrote: | | When applying for an IoM offshore bank account I was told that in "banking terms" - domiciled, means, where you are born!
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Yes, but you have to put this in context. The IoM bank was presumably dealing with you as a UK resident, in which case the UK HMRC's concept and definition of domicile applies. And technically, the IoM bank was oversimplifying: HMRC would consider your default domicile to be that of your father in the absence of other overriding information - hence if you were born in Bahrain to British parents, HMRC would consider you to be UK domiciled. In such circumstances, if you never set foot in the UK nor had financial interests there then the fact that HMRC considers you to be UK domiciled will never impinge on your life. If you are in France, then what matters to the French tax authorities is whether your primary residence is in France, and they apply tests such as;
Where do you spend the majority of your time? (which is usually the defining issue)
Where is the centre of your financial interests?
etc.
There are some wrinkles in the French system which apply to people just after they have arrived in France which mean that their treatment wrt certain types of tax liability is different to that which applies to someone who has lived in France all their life, as has been pointed out, but basically the French Fisc considers domicile to equate to residence, and if you are in France then what the French Fisc thinks, matters!
(edited) I note that Scooby has already clarified much of the above - I'm a slow typer ....
Regards
Pickles
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France Forum » Legal and Finan... » French Legal Is... » Re: Definition of 'domiciled'
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