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New UK-France double tax treaty

The current UK-France tax treaty of 1968 deals with income tax, capital gains tax and corporation tax...

The current UK-France tax treaty of 1968 deals with income tax, capital gains tax and corporation tax. There is an older treaty which deals with inheritance tax, which is not being changed. On 28th January 2004, the UK and France, after 12 years of negotiation, signed a new tax treaty which was subject to ratification by the parliaments of both countries. To date, the treaty has not been ratified and there is no parliamentary timetable for it to be ratified in either country. Requests for information (including under the Freedom of Information Act) about when the new treaty will be ratified have met without any substantive reply from either Revenue service.

We now have information from a reliable source that the new treaty will, rather embarrassingly, be scrapped and largely re-drafted. This is good news. The proposed treaty clearly showed in its cumbersome wording that it had been the subject of many years of re-drafting and tinkering which resulted in an unclear document with unusual provisions. It is to be hoped that next time round both the UK and French Revenue will agree the detail of the treaty in advance and then draft the relevant provisions, rather than trying to reach an agreement by years of drafting the documentation which inevitably results in obscure wording.

David Anderson
Sykes Anderson LLP
Solicitors
www.sykesanderson.com
david.anderson@sykesanderson.com

David Anderson is a solicitor and Chartered Tax Advisor at Sykes Anderson LLP, Solicitors and Chartered Tax Advisors. Please note that tax law and pension law are complex subjects and you should not take any action or refrain from taking any action without professional advice on the facts of your particular case. Please note that this article does not constitute financial advice.

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