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Where Taxpayers and Advisers Meet

Clarification on workings of dual-residence

Posts: 1
Joined: Thu May 02, 2019 10:24 pm

Clarification on workings of dual-residence

Postby FranceUK » Thu May 02, 2019 10:53 pm

I'm in the process of moving from France to the UK, and it seems likely that there will be an overlap period during which I'll be resident of both countries according to the domestic rules of each. I'm trying to get some clarification on how the process works and what it means for me, so please forgive the beginner's questions, but I'm struggling to find straightforward guidance.

I shall be employed in France until later this year (let's say October) at which point my French residency will end. Meanwhile, I spent enough time in the UK, that under the Statutory residence test I would be considered resident for the 19-20 tax year. Therefore, from 6th April 2019 until October, I'll be dual-resident, and then afterwards I'll be only UK resident.

Looking at the dual taxation convention between France and the UK, I think that I would be considered a French resident due to the "centre of vital interests test". I have a place to live in both countries (rented in my name in the UK, and staying with a friend in France, but both available to me, and I spend a similar amount of time in both). In the UK I own a property which is rented out (I've been declaring this on my UK tax as a non-resident in the past), and I have an investment account with investments that pay offshore dividends and are therefore not taxed in the UK. In France I have my employment income. I have no family.
Question 1: Would you agree that my employment in France, which is my main source of income is considered to be more significant in terms of the vital interests than my rental property and investment account in the UK? I cannot find any clear guidance on this test, it seems very vague.

Question 2: Assuming that under the DTA I'm a French resident, does that in effect mean that my taxation is as it would be if I were a UK non-resident? My income consists of employment in France, dividends from the US and the offshore ones from the UK account, capital gains from shares; all of which I pay tax on in France.

Many thanks for help with these basic questions.

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