Tax residency for executives: France or England?
Do you run a business between France and the UK? Choosing your tax residency is much more than a formality: it dictates your entire personal tax situation and can have serious consequences if not properly anticipated. Here is everything you need to know to optimize your situation and avoid double taxation.
Understanding tax residency criteria in France and the UK
In France: criteria from the General Tax Code
According to Article 4 B of the French General Tax Code (CGI), you are a French tax resident if you meet any of the following criteria:
- your home or primary place of residence is in France (more than 183 days per year);
- you carry out your main professional activity in France;
- the center of your economic interests is located in France.
In the UK: the Statutory Residence Test (SRT)
Tax residency in the UK is determined based on:
- the number of days spent in the country (generally >183 days/year),
- the availability of accommodation,
- your personal and professional ties to the country.
It is therefore possible to be considered a tax resident of both countries: a complex situation with significant stakes.
How this affects your taxes
Taxation on worldwide income
- As a French tax resident, you are taxed in France on all your income, whether it is from French or foreign sources.
- As a UK tax resident, the same principle applies, though with specific regimes for non-domiciled individuals.
Double taxation: a real risk
If both tax authorities consider you a tax resident, they may both seek to tax your income. The France-UK tax treaty provides mechanisms to avoid this, but they only work if your situation is properly documented.
Practical consequences
- Your salary, dividends, or capital gains may be treated differently depending on your country of residence.
- Reporting obligations multiply: two countries, two authorities, two systems.
- The risk of a tax audit increases if there is any ambiguity or inconsistency in your filings.
How to avoid dual tax residency?
1. Get a clear assessment of your situation
- Where does your family live?
- Where do you primarily work?
- Where are your business and investment affairs managed? A global perspective is essential.
2. Manage your time spent in each location
Keep a precise calendar of your travels to stay below the tax threshold in the country you are not choosing.
3. Consolidate your interests
Ideally, your family, professional, and economic interests should all point toward the same country.
4. Leverage the France-UK tax treaty
This treaty provides hierarchical criteria in the event of a conflict: permanent home, center of vital interests, habitual residence, and nationality.
5. Anticipate any major changes
A move, a new job appointment, or enrolling children in school abroad: every change must be anticipated from a tax perspective.
Moving to France or England: get expert support
As a business lawyer, I assist company executives with their international tax residency strategy. My approach combines:
- a personalized analysis of your personal and professional situation,
- anticipation of tax and wealth implications,
- coordination with local experts,
- legal security for your relocation.
Conclusion
Choosing your tax residency between France and England should not be left to chance or the last minute. A clear strategy, based on objective criteria, will allow you to optimize your tax position, avoid costly mistakes, and ensure the long-term success of your professional and personal projects.
Need tailored support? Let’s schedule a meeting to assess your situation.
