Taxation on Change of Family Circumstances
Tuesday 01 May 2012
New guidance clarifies the process of making a French tax return following a marriage, civil partnership, divorce, separation or death.
Prior to 2011, where there was a change in family circumstances due to marriage, civil partnership, divorce, or separation, couples were required to submit up to three tax returns in the year.
With effect from 2011 (for tax returns to be submitted in 2012), new regulations simplfy these arrangements, substituting multiple tax returns for a single return for both parties.
By option, a couple who marry or enter a civil partnership in the year can also elect to opt for separate tax returns.
Clearly, in such circumstances you need to determine the most tax advantageous option. It is frequently the case that adoption of a joint return is more tax efficient, but only an examination of your circumstances will determine the best choice.
If you opt for separate taxation then income that is regarded as personal is your salary, pension, and business income, provided the business is not jointly owned. All other income is regarded as joint income.
Those who divorce or separate are each required to submit their own tax return.
There are no changes in the arrangements where a married person or one in a civil partnership dies in the year, when two tax returns are necessary by the surviving party.
The following table summarises the new procedures.
| Change of Family Circumstanes | |||
| Pre 2011 | 2011 | ||
| Year of Marriage/Civil Partnership (PACS) | Three tax returns: - one in name of each person to marriage/pacs; - one in joint name of couple. | One joint tax return or, by option, each to submit their own return | |
| Year of Separation, Divorce or Dissolution of PACS | Three tax returns : - one in name of each person to marriage/pacs; - one in joint name of couple. | Each to submit a separate return | |
| Year of Death of Person Married/PACS | Two tax returns: - one joint in name of couple to date of death; - one in sole name of surviving spouse/partner for period post death. | No change | |
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