French income tax returns are being sent out to all households, so we take you through the main rules and requirements.

'Everyone who is resident in France must complete an income tax return and those who are resident are liable on the basis of their worldwide income, says Robert Kent of French tax advisors, Kentingtons.

If you own a second home and earn rental income in France you are also liable to French income tax, and thereby obliged to complete a French income tax return.

Cross border workers who have a family home in France, but who work in the UK, are normally liable for income tax and social security contributions in the UK on their income earned in the UK.

You need to declare the income of everyone in your household, although there are particular rules concerning children over 18 years of age and unmarried couples.

Even though you may be taxed on some of your income in the UK or elsewhere, if you are resident in France, you need to declare all of your worldwide income on your French tax return. This is done to establish the rate you will pay on any income earned in France.

Those with pensions from the UK are taxed in France, although 'government service pensions' are always taxed in the UK, but need to be declared on the French tax return.

The timescales for submission of the return are different for those who run a limited company in France, although if you operate a business as a ‘micro-entreprise’, your business earnings should be submitted with your personal income tax return.

There is no single tax return to complete, as there are different forms for various types of income, all of which is largely consolidated onto a Form 2042.

Whilst the process may be a little bureaucratic and complicated, in practice you are likely to pay little or no income tax in France. A couple on an early retirement pension would need a net income of around €18,000 a year before they paid any tax at all.

If you are likely to pay tax, there are a number of tax avoidance measures you can use. Of particular interest are the tax credits for home energy conservation.

Social Charges

Even if you may pay little or no income tax, you are likely to be liable for payment of the social charges, on some or all of your income. Certain pension income is exempt – notably for those on ‘E’ forms (including those of state retirement age) and early retirees on government service pensions.

However, even though your pension income may be exempt, you will pay the social charges on investment and rental income.

You will receive a demand for the payment of these social charges in November, so do not think that it is all over when you have received your income tax bill in or around September! Business owners pay the social charges throughout the year, although they will also pay in November on their other earnings eg early retirement pension, investment or rental income.

You can read more in our comprehensive Guide to French Income Tax.