ASK THE EXPERTS
Whether you’re planning your move to France, or are already living there, our panel of professionals aims to keep you fully informed with the best advice for every eventuality
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
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
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