I receive a Government service pension that attracts tax in the UK. The french receive a Tax Credit for the amount they would receive if this pension was taxed here - About 65% of the amount actually paid in the UK. When submitting my French tax return l include state pensions and my wifes small private pensions from the UK which are well below the personal allowance in the UK. However, the Tresor Publique (Impot), then add those small pensions to my Government Pension and apply the Global revenue rates to reach the amount of tax that the total attract's here in France.
Because the Tax Credit is only for the amount of tax the French would impose on the Govt Pension it is below the amount of tax that would be paid on the Global income. We are therefore required to pay the tax on the difference - This year 850 euros.
If our global income was taxed here in France (Govt, state and small private pension) It would attract about 5500 Euros. In fact we pay about 7000 euros in tax in the UK and now another 850 euros here in France.
Does anybody else suffer the same problem and/or know if there is anyway of claiming back these outrageous tax demands?