Next year (if I so choose) I will be able to take a chunk of my company pension as a tax free lump sum as part of a "flexible retirement" scheme. Although this is stated to be "tax free" in the UK would I be liable to any charges on it as a French tax resident?
I think you pay 7.5% on the lump sum, the pension comes into normal tax. So it might be advisable to take it all as a lump sum.
http://www.french-property.com/news/tax_france/pensions/ Take professional advice
Thanks Steve. Under this scheme I won't be able to take it all as a lump sum as I shall still be working and adding to the remaining pension pot for at least another 5 years, albeit part time.
Yes, if you're resident in France (for tax purposes) then you pay 7½% on the lump sum.
Sandy, thanks for confirming the 7.5%. I understand that there is also a social charge to pay - approx another 7% on the lump sum?
I haven't declared my lump sum yet (it was paid last year) but I contacted the French tax office to ask how to declare it. They said there was a prelevement of 7.5% and you declare it in the box AT of your declaration. I think that officially the 7.5% is a social charge, not a tax.
Is this "social" tax similar to the "social" tax charged on non-french residents on the gain arising from property sale? and ruled to be illegal.
Don't answer the following but is the capital required? or are you anticipating that you can get a better return elsewhere? Have you looked into QROPS?