UK Lawyers To Lose Tax Exemptions In France

by Robin Pilgrim, LawAndTax-News.com, London

01 December 2004

Reports in the legal media have suggested that partners with the French branches of UK law firms are likely to lose out under the amended tax treaty between the two countries.

The UK-France Tax Treaty, signed in January 2004, is set to come into force in 2006. It is designed to replace the existing treaty, which was ratified in 1968, and closes some of the tax loopholes previously available to French resident partners of international firms.

According to The Lawyer.com, certain types of income and capital gains which are currently exempted from French income tax will no longer be so under the new tax agreement.

Speaking to the news service, Sykes Anderson partner, David Anderson observed that:

"The current treaty affords people considerable tax advantages, which often amount to total exemption from tax both in England and France. There are numerous tax advantages under the current regime which are simple to use and are widely exploited by people in the know."

It is understood that the changes to the tax treatment of UK professionals under the new treaty came about at least in part as a result of lobbying from French legal and other firms.

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