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.

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Understanding tax residency criteria in France and the UK

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In France: criteria from the General Tax Code

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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.

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In the UK: the Statutory Residence Test (SRT)

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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.

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How this affects your taxes

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Taxation on worldwide income

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• 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.

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Double taxation: a real risk

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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.

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Practical consequences

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• 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.

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How to avoid dual tax residency?

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1. Get a clear assessment of your situation

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• Where does your family live?
• Where do you primarily work?
• Where are your business and investment affairs managed? A global perspective is essential.

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2. Manage your time spent in each location

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Keep a precise calendar of your travels to stay below the tax threshold in the country you are not choosing.

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3. Consolidate your interests

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Ideally, your family, professional, and economic interests should all point toward the same country.

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4. Leverage the France-UK tax treaty

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This treaty provides hierarchical criteria in the event of a conflict: permanent home, center of vital interests, habitual residence, and nationality.

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5. Anticipate any major changes

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A move, a new job appointment, or enrolling children in school abroad: every change must be anticipated from a tax perspective.

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Moving to France or England: get expert support

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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.

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Conclusion

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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.

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