French Tax Crack Down On British Expat Investments

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British expats in France are facing a tax crack down on their savings and investments back home.

The French tax man is chasing expats for failing to declare their interest and earnings from savings and investments.

And expats are being warned that their offshore financial affairs will soon be revealed to the French tax authority under new information swapping treaties.

The main tax information exchange hub is a European Directive on Savings Tax.

The directive allows tax authorities in one European Union country to find out about expat savings and investments held in other EU countries.

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The anomaly is that although HM Revenue & Customs (HMRC) in Britain does not need to be told of any cash or earnings from ISAs, the French tax authority ignores the tax-free status of ISAs in the UK and charges expats tax on them.

Some British expats in France have faced tax investigations for failing to disclose overseas investments and income. Many have faced tax penalties of almost two-thirds of their offshore earnings as a result.

Tax hike for second homers

Meanwhile, a government initiative to free up housing by letting local authorities charge higher rates on holiday homes is also likely to hit British expats in the pocket.

Local authorities in many popular holiday areas have been greenlighted to increase their rates by up to 20% in a bid to encourage owners with vacant homes to rent them out on long-term lets.

The aim of the measure is to free-up properties in areas with housing shortages.

Second homes owned for business reasons or which are already rented out are exempt from the new tax.

Local authorities have the option of applying the tax and the measure still has to gain approval in the French parliament.

Property tax deadline extended

In Cyprus, expats have an extra month’s breathing space before they have to pay the next instalment of the immovable property tax.

The deadline has been shifted to December 31, 2014, although early payers who settle their bill by November 30 gain a 15% discount.

Late payers face a 10% penalty.

The measure was voted through by MPs in recognition that cash-strapped home owners are struggling to pay their bills.

Benefit fraudsters targetted

Fraud investigators are targeting scammers living in Spain and illegally claiming benefits in the UK.

The UK Department of Work and Pensions is tracking down expats abusing the benefits system which is estimated to cost taxpayers around £82 million a year.

One fraudster, Peter Fischer, claimed £85,000 in benefits while living in Spain and running businesses in both countries.  A court sentenced him to 15 months in jail suspended for 15 months.

“These benefit thieves are costing genuine taxpayers huge amounts of money by taking advantage of the welfare system,” said a DWP spokesman.

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