Sterling/euro exchange rate.

parsnips
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Re: Sterling/euro exchange rate.

Post by parsnips »

"The legal rate which is specified on the forms is the rate on the day you received the item of income into your hands or a bank account etc. (wherever situated). The tax office cannot dispute this figure.
You can find historic rates on xe.com or the BoF site."

That's all very well if you can do that but for some of us it is a little more complex. We have £'s paid into a UK bank which is often spent in dribs and drabs in both £'s and €'s (e.g. Amazon & PayPal), Euros paid into our French bank and £'s converted and paid into French bank. We also convert £'s to $'s when on holiday. To avoid the complexities of conversion we have always used an average rate provided by the tax office which this year is 1.14

The only figures you need are the value of income in £ converted into € on the day your money is paid into the UK bank, and any € income paid direct to your french bank.. How and where you spend it is irrelevant, all you need to consult are your UK and french bank statements and the historic rates charts.

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bubbles1
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Re: Sterling/euro exchange rate.

Post by bubbles1 »

DominicBest wrote:
Thu Apr 12, 2018 10:21 am
Surely keeping a record of your expenditure is irrelevant. What counts is the value of your income in Euros. Whether you leave it in Britain, move it to France, spend it or keep it as savings makes no difference.

Totally correct. Plus it isnot only Sterlin or Euros but worldwide income depending upon where you are fiscally resident(for the French tax authorities)..
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Jay
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Re: Sterling/euro exchange rate.

Post by Jay »

Well I think it makes a big difference.

If, for instance, you have £10k paid into a UK bank on 1st Jan and the official exchange rate at that time is 1.2 then on transfer you would get 12,000€ less fees. Hold onto that 10k in the UK and get interest on it for 11 months then transfer at say 1.3 (some hope!) then you would get 1,000€ + interest more.

Now what you are saying is declare 12,000€ because that was the rate on the day you received the item of income into your hands or a bank account but in fact your income was actually 1000€ more than that just because of fluctuations in the exchange rate.

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DominicBest
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Re: Sterling/euro exchange rate.

Post by DominicBest »

Yes it’s the income at the time you get it that counts. Moving it into Euros when the rate is favourable is a bonus but it doesn’t alter your income.

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Re: Sterling/euro exchange rate.

Post by Aardvark »

Absolutely spot on! :good:
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Jay
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Re: Sterling/euro exchange rate.

Post by Jay »

DominicBest wrote:
Thu Apr 12, 2018 5:59 pm
Yes it’s the income at the time you get it that counts. Moving it into Euros when the rate is favourable is a bonus but it doesn’t alter your income.
Yes it does, I would have 1000€ more if I waited to transfer. Still income is it not?

If I played the markets (if I was rich enough) and made say 30,000€ by transferring money from my savings at the right time then you are saying that is a bonus that need not be declared?

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Re: Sterling/euro exchange rate.

Post by Le Démerdeur »

You are all overthinking it, no-one in the history of man has ever been asked what rate they used and/or to justify it, you put the amount in euros that suits you/you believe/have calculated/pulled out of thin air and they will use that to calculate your impôts.

My first returns were done at the hôtel des impôts and a senior contrôleur did them and I just signed them, aside from using a couple of cheats to make his life easier (which I have continued to do since) I gave him my UK income in pounds, he looked up the figure for that year (it was say £1 = €1.25) and he divided the £ figure by 1.25 instead of multiplying it, I politely informed him of hs error, had I been 100% sure it wasn't a trick I may have kept schtuum and done the same ever since, for all I know and for all they know many people might even be doing just that.

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Re: Sterling/euro exchange rate.

Post by DominicBest »

Jay wrote:
Thu Apr 12, 2018 7:36 pm
DominicBest wrote:
Thu Apr 12, 2018 5:59 pm
Yes it’s the income at the time you get it that counts. Moving it into Euros when the rate is favourable is a bonus but it doesn’t alter your income.
Yes it does, I would have 1000€ more if I waited to transfer. Still income is it not?

If I played the markets (if I was rich enough) and made say 30,000€ by transferring money from my savings at the right time then you are saying that is a bonus that need not be declared?
If you were actively playing the markets it would be income. If you are a standard person who has an income in pounds who at some time brings that money over to France to live off they are only interested in what it was worth when you earned it. Most people don’t even go to the bother of working out exactly how many Euros their pounds were worth when they arrived in their U.K. bank, they just multiply their sterling income for the year by the average exchange rate.

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Re: Sterling/euro exchange rate.

Post by jsks »

I went to the impots when we lived in France because my pensions were paid in Sterling and then transferred. The nice lady told me to use the average exchange rate for the year's total. I did that each year and it was never questioned.

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Re: Sterling/euro exchange rate.

Post by suein56 »

Jay wrote:
Thu Apr 12, 2018 7:36 pm
Yes it does, I would have 1000€ more if I waited to transfer. Still income is it not?
IMHO you're missing the point as far as the French Fisc is concerned. You are required to declare your global income .. so if you receive £20 000 into your UK account on a certain day then you theoretically convert it, as French law prescribes, into an equivalent € value on the day it was credited to your uk account and declare this € amount on your Fr tax form... you have followed the letter of Fr law.
If you don't need this income straight away and so don't actually exchange this income into € and move it to France until the rate improves then that is your business.
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