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Living France - - Contents - RAN­DALL BRODY

Our ex­perts give their ad­vice on high-speed in­ter­net, rent­ing a prop­erty and a tax query

STAND OUT FROM THE CROWD

QI own a prop­erty in France which I would like to start rent­ing out as hol­i­day ac­com­mo­da­tion, and won­dered what the best way to mar­ket it would be when there is so much com­pe­ti­tion? I as­sume so­cial me­dia should form a part of my mar­ket­ing strat­egy as ev­ery­one seems to use it these days? My prop­erty is close to the north­ern ferry ports and at­trac­tions such as Mont St-Michel, so I’m hop­ing this will make it ap­peal­ing to guests. Bar­bara Mitchell

AI would strongly rec­om­mend us­ing an ad­ver­tis­ing plat­form to pro­mote your prop­erty – there is a good se­lec­tion of global and French spe­cial­ist web­sites to choose from – as this means your hol­i­day ac­com­mo­da­tion can ben­e­fit from the sup­port of a recog­nised brand name. You will be able to take ad­van­tage of their mar­ket­ing ex­per­tise, which is es­pe­cially use­ful when you are just start­ing out with your ad­ver­tis­ing. You may find that many guests pre­fer book­ing via an ad­ver­tis­ing plat­form as they feel it gives their book­ing added se­cu­rity. There is a huge va­ri­ety of dif­fer­ent ad­ver­tis­ing op­tions avail­able from a range of com­pa­nies so be sure to do your re­search and choose the op­tion that works best for you. Be sure to men­tion your prox­im­ity to ar­rival ports and air­ports, and to ask pre­vi­ous guests to leave re­views to make you stand out from the rest.

I would also def­i­nitely rec­om­mend us­ing so­cial me­dia to sup­port your mar­ket­ing strat­egy, es­pe­cially the key plat­forms of Face­book and Twit­ter. As you cor­rectly sug­gested, so­cial me­dia is used by ev­ery­one these days and will al­low you to fre­quently post up­dates and let po­ten­tial guests know what is go­ing on at your prop­erty and in the lo­cal area. Many peo­ple will look at a Face­book or Twit­ter page be­fore de­cid­ing where to book, and it is a great way for guests to post any quick ques­tions they may have and for you to pro­vide them with your re­sponse.

An­other sim­ple but great way to pro­mote your hol­i­day ac­com­mo­da­tion is through word of mouth. To en­cour­age this, you could con­sider of­fer­ing spe­cial deals to re­turn­ing cus­tomers or those who have been rec­om­mended by a friend. This should not only get you re­peat book­ings but also help you to de­velop an ex­cel­lent rep­u­ta­tion among your cus­tomers.

Once you have es­tab­lished your­self, you should con­sider cre­at­ing your own web­site. You can link this to your so­cial me­dia ac­counts and have the op­tion for guests to con­tact you di­rectly via the site, mean­ing you will be in com­plete con­trol of your mar­ket­ing. LIZ RODGERS

FRENCH CON­NEC­TION

QI’ve read that France has plans to im­ple­ment a very high-speed in­ter­net net­work (réseau très haut débit) and I won­dered what this is and how it will work? I own a French prop­erty so would be in­ter­ested to know what stage the plans are at and how soon I might be able to ben­e­fit from this new ser­vice. Lawrence David­son

AThe réseau très haut débit (THD), lit­er­ally trans­lated as ‘very high­speed net­work’, is a €20bn plan to de­liver high-per­for­mance in­ter­net con­nec­tiv­ity across the whole of France by 2022. An­nounced by the French pres­i­dent in 2013, the plan is de­signed to strengthen the com­pet­i­tive­ness of the French econ­omy and the qual­ity of pub­lic ser­vices, and re­quired a series of laws to be passed which al­low broad­band providers in France to share a com­mon net­work of ul­tra-fast op­ti­cal fi­bre, as well as the gov­er­nance of in­stalling the new ca­bling into both old and new prop­er­ties.

From a cus­tomer per­spec­tive, THD brings a bet­ter qual­ity of ser­vice to their in­ter­net con­nec­tion, al­low­ing house­holds to en­joy sev­eral chan­nels of HD tele­vi­sion si­mul­ta­ne­ously, or su­perquick down­load­ing of mu­sic or films. It’s also de­signed to im­prove con­ver­gence – bring­ing mo­bile, land­lines, TV and in­ter­net ser­vices closer to­gether. It’s hoped that this en­hanced con­nec­tiv­ity will al­low for de­vel­op­ments in prod­uct in­no­va­tions which will bring the French mar­ket closer to the ser­vices of­fered in the UK – for

ex­am­ple, be­ing able to watch the foot­ball in the com­fort of your own home, but be­ing able to choose which cam­era you watch from, or shar­ing con­tent across a num­ber of de­vices si­mul­ta­ne­ously.

Although the THD is a na­tional ini­tia­tive, its im­ple­men­ta­tion is be­ing man­aged on a re­gional level. The roll-out has al­ready be­gun, with larger towns first on the list, and schools, hos­pi­tals and uni­ver­si­ties given pri­or­ity. It will then be rolled out gen­er­ally. To find out when the ser­vice is due to ar­rive in your area, visit francethd.fr/l-ob­ser­va­toire/l-ob­ser­va­toire­france-tres-haut-debit.html for a dynamic map rep­re­sen­ta­tion to show con­nec­tiv­ity across the coun­try. BOB EL­LIOTT

TAX­ING MAT­TERS

QI am a US ex­pat liv­ing and work­ing in France and am un­clear about my tax sit­u­a­tion. I have my own busi­ness in France (I run a ho­tel) and I still own a prop­erty in the US which is rented out. Where do I have to de­clare my in­come and file my tax re­turn? Jor­dan John­son

AAs a US cit­i­zen or res­i­dent alien, the rules for fil­ing in­come tax re­turns are fairly unique when com­pared to other coun­tries, such as France. The US is the only coun­try that has tax­a­tion of world­wide in­come for all of its cit­i­zens, no mat­ter where they live and re­gard­less of how long they have been over­seas. Well, ac­tu­ally the US is al­most the only coun­try – Eritrea has what is known as a ‘di­as­pora tax’ on its cit­i­zens.

If you are a US cit­i­zen, the rules for fil­ing in­come, es­tate, and gift tax re­turns and pay­ing es­ti­mated tax are gen­er­ally the same whether you are in the US or liv­ing abroad in France. With tax­a­tion of world­wide in­come, your US and for­eign in­come is sub­ject to US in­come tax, re­gard­less of where you re­side. It is known as a ci­ti­zen­ship-based in­come tax.

Gen­er­ally, you must file a re­turn if your ‘gross in­come’ from world­wide sources is at least the amount shown for your fil­ing sta­tus in the fil­ing re­quire­ments ta­ble in chap­ter one of IRS Pub­li­ca­tion 54. Gross in­come in­cludes all in­come you re­ceive in the form of money, goods, prop­erty, and ser­vices that is not ex­empt from the US and while liv­ing abroad.

In de­ter­min­ing whether you must file a tax re­turn, you must in­clude as gross in­come any in­come that you can ex­clude

from the for­eign earned in­come ex­clu­sion or for­eign hous­ing ex­clu­sion.

Once you de­ter­mine that you have a US tax fil­ing re­quire­ment, you must de­ter­mine what forms and sched­ules you will need to de­clare as part of your in­di­vid­ual tax re­turn (i.e. form 1040). Your own­er­ship of a for­eign busi­ness (your ho­tel in France) will re­quire ad­di­tional forms de­pend­ing on the type of busi­ness en­tity and other fac­tors.

For ex­am­ple, of­ten US own­ers of what is deemed a for­eign cor­po­ra­tion will have to com­plete form 5471. The form 5471 (In­for­ma­tion Re­turn of US Per­sons with Re­spect to Cer­tain For­eign Cor­po­ra­tions) is an in­for­ma­tion re­turn that must be filed by US cit­i­zens and US res­i­dents who are of­fi­cers, di­rec­tors, or share­hold­ers in cer­tain for­eign cor­po­ra­tions.

On the other hand, busi­ness own­ers with a sole pro­pri­etor­ship (a busi­ness en­tity that is sep­a­rate from in­di­vid­ual own­er­ship) will be re­quired to file a Sched­ule C (Profit or Loss from Busi­ness – Sole Pro­pri­etor­ship) as part of their in­di­vid­ual tax re­turn. As­sum­ing that your US rental prop­erty is owned in­di­vid­u­ally in your own name, you will also be re­quired to file a Sched­ule E (Sup­ple­men­tal In­come and Loss) to re­port your rental in­come and ex­penses. If that is not the case, other forms may be ap­pli­ca­ble.

De­pend­ing on the state lo­ca­tion of the prop­erty, state tax re­turn fil­ing re­quire­ments may also ap­ply. Many over­seas tax­pay­ers have ques­tions about their fil­ing re­quire­ments and tax li­a­bil­ity as it per­tains to fil­ing a state in­come tax re­turn dur­ing pe­ri­ods when they are re­sid­ing over­seas. Most as­sume (in­cor­rectly) that if re­sid­ing over­seas, they are no longer re­quired to file a state tax re­turn. If the state that you resided in prior to mov­ing over­seas has no state in­come tax then you will con­tinue to have no state in­come tax fil­ing re­quire­ments.

How­ever, if you pre­vi­ously lived in a state with in­come taxes, the an­swer is not al­ways clear-cut and this as­sump­tion is not al­ways cor­rect. The state in­come tax re­turn res­i­dency rules for tax­pay­ers that re­side over­seas vary greatly from state to state and there are nu­mer­ous ways in which each state makes this de­ter­mi­na­tion. Some states use a ‘time-based’ test, while other states look at whether you are con­sid­ered to have ‘tax domi­cile’ in the state. This is of­ten not as sim­ple as whether you are phys­i­cally present in the state or not.

Whether you are con­sid­ered a res­i­dent or non-res­i­dent of the state, the state will con­sider the rental in­come sub­ject to state tax­a­tion and fil­ing re­quire­ments when the state fil­ing re­quire­ments are met.

For fur­ther as­sis­tance, please be sure to con­tact a tax pro­fes­sional. If you are pre­par­ing your own re­turn, we rec­om­mend check­ing the reg­u­la­tions with the rel­e­vant state tax au­thor­ity.

Your US and for­eign in­come is sub­ject to US in­come tax

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