Residency has long been an area of confusion and, with Brexit, it has
become yet more convoluted, due to EU rules, local laws of each country, and
Schengen rules. UK nationals, as EU citizens, never had to worry about the
right to stay more than a few weeks as we simply had the right to do so. For
British nationals, the loss of EU citizenship means that life is now more
complicated.First, we
need to know the difference between the right to be somewhere, ie. temporarily
reside there, and becoming fiscally resident: changing where you declare your
global income, gains and assets for tax purposes. It is important to note the basis for defining tax
residency is not the same in France as it is in the UK, so the number of days
spent in a country is not the only consideration. In fact, the main French laws
defining residency do not even discuss the number of days spent in this
country. Residency rules are clarified both in Article 4B of the French tax
code and Article 3 of the UK/France Double Tax Treaty.
The
first of the definitions highlighted is the foyer ou le lieu de séjour
principal, thus where your main residence or home is situated.The Double
Tax Treaty states “he shall be deemed to be a resident of the Contracting State
in which he has a permanent home available to him”. This may be accommodation
that you own or is (officially) rented.
What
is essential is that it is available for your use and under your control, so if
the property is owned by you, but is rented out, this is not deemed to be a
home. Also, you may not use the address of siblings, children, parents or
friends.Therefore, if your only property is in France, you are considered
French resident from the day you disposed of your other property. If you can
demonstrate that a property outside France is used by you as your permanent
home (eg. the bills are in your name at that address), you can argue your
residency either way on this rule.
The
next main rule is where you spend “most of your time”. Many ancillary laws,
both French and in the tax treaty, refer to 183 days, but it is important to
understand that:
- If you spend
less than this time in France, but it is where you have spent “most” of
your time, you will still be considered resident;
- Once you have
spent 183 days in France, you are not deemed resident from the 183rd day,
but from the day of arrival.
Gaining
the right to reside in France (in the sense of a right to live) does not confer
the right to residence elsewhere in the EU or Schengen, but just that one
country.
For more information concerning the change of
your tax residence, please feel free to contact Advanced Consultants SA.
