I registered my Micro entrepreneur here in France in February 2019. We are resident since April 2018 and about to do our first tax returns. My wife owns a house outright in the UK. This property is let and she receives a monthly rent payment from her tenants, receivable into our joint UK bank account. There is a Government approved rental contract in force and records of all payments. We are in the process of regularising our status here and are unclear of how we should proceed re tax and social charges for this rental income.
In 2018, my wife was advised by a UK management agency to register on the Government’s Non Resident Landlord scheme NRL1. She has done this. NRL1 means no tax is payable in the UK as the landlord is resident abroad.
However, researching French tax and cotisations, we find conflicting advice. Some sources advise that she should pay tax on her UK rental income in the UK then declare that here. This would mean de-registering from NRL1 - it’s unclear whether social charges would be due here if we did this. Other sources say that if processing this rental income via the French tax system, both tax and 8% PUMA cotisations would be due on this rental income. We are still formalising our status here so this second option could be valuable as it would give her health cover. As the ‘ayant droits’ principle is now dropped for spouses, she will have no health cover through my micro entrepreneur.
We are unclear if what is the correct way forward or whether these sources are accurate. We realise we may need to act quickly to resolve this so any advice you have would be excellent.