I’ll just be glad to get MY money and not have to declare every three months what I am living on, being on the RSA albeit only a tiny fraction, is not nice but then I think that OH paid thousands per year in charges and so have I paid in and don’t feel guilty. To threaten me at my age with going to job interviews isn’t nice either, they should be targetting the workshy youngsters who sit at home on their phones all day and I know of several in my old commune who did just that.
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Have you made HMRC aware by submitting a France individual form to get your pension paid gross?
I don’t get my pension until August 2026 and I’m still living in the UK - I’m planning ahead 
Bear in mind in your long term planning that HMRC are consistently taking an absolutely ridiculous amount of time to process even basic things. For example there are major delays in issuing No Tax (NT) PAYE codes eg on UK pensions being paid to French residents, and on refunds for tax withheld from UK pensions.
It’s so bad the delays are even being raised at a political level…
BBC News - Diabolical HMRC service hurts economy - accountants
I have been waiting nearly a year for an NT code (only just received) and well over a year for a refund for UK tax withheld from a UK pension, despite full documentation supplied on time.
Small compensation but at least your UK state pension should be paid to you gross, unlike your other UK pension(s) that you will need to complete the France Individual form that @JaneJones helpfully mentions.
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@PeterJ @graham Interesting video and comments on the possible scrapping of the UK tax free lump sums on pensions.
The ability to obtain lump sums that are not taxed for UK residents and also not taxable in France if taken before becoming French resident was absolutely critical in our financial planning for moving to France. We’re hoping to live off them for several years until I qualify for a pension in about 2028/29…I’d imagine others may be equally reliant on the UK tax free lump sum for their pre France move planning.
One hope - for as long as I’ve had professional involvement in tax (30+ years) governments and think tanks have regularly floated the revenue raising idea of scrapping tax free lump sums for pensions - and the tax free elements of redundancy payments. In virtually every case, they don’t proceed then with the plans. The assumption in the profession is that the civil servants/unions - including HMRC (!) would understandably go into total meltdown at the very prospect, and it seems that Ministers prefer to find easier ways of raising funds!
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@George1 to avoid excessive HMRC retention, did you not do the workround of withdrawing the absolute minimum first (£1 - £100 or so depending on the rules of where it’s coming from). Then wait, formerly around 2 weeks maybe longer now, till HMRC issues a tax code for the fund whixh is triggered by the first withdrawal. Then when the code comes through, take the rest as a second withdrawal which will be according to the tax code.
Then emergency-tax-based-as-if-you-were-getting-the-same-amount-as-the-first-withdrawal-every-month-in-the-year, should be very much reduced as ir’s only that high rate fot the firat withdrawal and the tax code comes through after that and will apply to later withdrawals. So the wait for your refund will have less impact as it will be for practically nothing retained as the initial amount was so small.
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Thank you. That’s quite an ingenious technique, which I will definitely consider for future regular type withdrawals.
I didn’t use it in my particular case as that was a one-off substantial withdrawal, primarily to move the sum out of £ into € - and France. I wanted the NT code so I can move the remaining balance in one go also into €/France, without yet more PAYE being withheld, since the amount is ultimately only taxable here in France…
As an aside, it’s always rather frustrated me that UK pension schemes do not seemingly offer the ability to hold plans in currencies other than £. If you hold an investment portfolio with a good asset manager, you expect it, and your investments to be based in the currency and location of your choice eg ¥/$/€ etc. Actuaries have advised me this isn’t possible with UK achemes. I guess they’re probably terrified that some UK pensioner loses out from having invested their plan in a currency that significantly depreciates by the time of their retirement - and probably then tries to sue! You can see the headlines already…
Is it not the case that you have a one hit TFC not multiple withdrawls?
Apologies @Corona - I’m afraid I’m not sure I really understand what you’re asking - what is a ‘TFC’ ?
Tax Free Cash springs to mind.
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@digitracker Thanks, a helpful suggestion.
@Corona I’ve in fact already helped myself to a UK tax free lump sum from this scheme, when I was UK resident/non French resident (and am now living off it!). So this latest lump sum that I’m waiting on HMRC for a refund is ultimately fully taxable (albeit only) in France, as I’m now resident here. As it’s not a lump sum representing the entirety of the plan, I can’t take advantage of the French @7% tax rate here on such events…
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You know, there is a SF member who did take a 25% tax free lump sum when in the UK and then the rest in one go in France in under the 7.5 flat rate. I’m not advertising this -respect to the member- however I think all the info is all posted including the Impot’s own tax bulletin I found and posted (don’t have it to hand so not posting it here).
I recall there was an understanding with the member and the impot that as the initial lump sum was not taxable in France at the time it didn’t count!
The bulletin does detail some scenarios where two pension withdrawals can be made.
I guess from your post though that you will be into at least three withdrawals so that ship has maybe sailed?
On another note too, there was a member who responded (my first ‘thread’ on SF was this very topic) that on taking their UK teachers pension lump sum in France they did pay the 7.5% flat rate on it.
My current interest in this fascinating topic is how to approach a UK local government pension lump sum taken when in France - the annual LGPS pension is declared in France as ‘global earnings’ - that increases France tax on France taxable income.
However the lump sum is non taxable in the UK - so what to do with it re. France - declare as global income or not?
You see a large lump sum declared as global non taxable earnings can push France taxable income taxed at say the 11% bracket into a very high bracket - 45%.
It may be better to pay the 7.5% rate - one can put the amount in the box, but it’s really not taxable in France in the first place (not that France would probably argue too much
That’s why I am quite interested in the treatment of UK tax free lump sums in general and now pension lump sums only taxable in UK as per the DTT.
I guess the question is 'if income is not taxable in the UK and not taxable in France is it still income for the purpose of ‘global’ income.
For example if the answer was ‘yes’ then any inheritance received from a UK domiciled bequest to a France resident should be added to global income and turning the France tax bill on the pension from say 1K into 4K.
This is off topic - I’d be happy to have it as a new thread - but only if lots of people have thoughts…
Just throwing it out there at the mo.
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Interesting but isn’t a UK inheritance taxable in the UK but the first £325000 is at zero rate and 40% for the rest.
So tax would be paid in the UK not in France.
Nick
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If you lodge a will stating where you want your estate to be dealt with I believe
If you declare your Local Gov pension lump sum in a UK tax return, even if you’re now a French resident, surely it won’t be taxable in France because it’s already been tax assessessed under a different, but recognised tax regime?
@larkswood12 A very informative and (tax technical !) thought provoking post…
I did not know -or had probably forgotten - that an SF member had done just that. Really interesting to hear. By coincidence, I have been thinking for some months of doing precisely this for a substantial defined contribution pension plan I’m fortunate enough to have, though I had not started to fully research it. I will start searching for your prior post.
Sadly yes, in respect of that particular plan. I can’t complain, it was composed entirely of NI contracted out bungs from Her Majesty’s Government/my employer/ me, and by being totally ignored by me for 20+ years, has done surprisingly well.
Actually my (quick) reading of the treaty (article 19- pensions) is that the local government (LG) lump sum is actually taxable (only) in the UK, ie taxing rights are allocated to it, but (crucially) that under the UK’s domestic (ie non treaty) tax laws, it chooses not to tax - ie exempt - the LG lump sum. Under the (near incomprehensible, impenetrable!) relief of double tax article (24{3}[a]) I think the lump sum is then taken into account for the purposes of determining the tax applicable to other taxable income in France, albeit the lump sum is not itself ‘taxed’ in France. I accept this no doubt pushes your other income into higher tax brackets.
As this was based on a fairly quick reading, and won’t be the answer you want (!), and others may have a different more informed perspective on it, I think it would be worthwhile appealing to the wiser and wider SF population - possibly via a separate thread?. The aim would be to see if any SF members have actually received a UK local government lump sum pension whilst French resident and what was the professional advice (if taken)/what were the consequences. I can’t believe there won’t be people with actual experience (as opposed to what you often unfortunately find with tax issues ie golf club {“my accountant says”} type gossip. No criticism intended of any SF member. There may also be loads of people now resident in France not on SF (are there any?!) , who will have direct experience of the French treatment of LG lump sums. I’m just not sure how you’d reach them (are there ex-LG in France Facebook groups or other forums/equivalents)… Finally of course, there’s always professional advice available, albeit at a cost. A fascinating topic for tax folks (sad to admit!).
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@larkswood12 Apologies I forgot to comment on the issue of claiming the 7.5% prélèvement forfaitaire libératoire on the LG lump sum. I can see now, having just searched, that this was discussed quite a while back on this site (2018?).
I struggle to see, strictly, how an amount (the lump sum) that is not taxable here in France can somehow be ‘forced’ into the calculation of French tax on remaining French taxable income, by effectively saying the lump sum is taxable here, and please can I have the 7.5% rate on it. Of course probably ‘anything’ is possible in negotiations with an individual Impôts office, but looking at this from a treaty perspective, I can’t see the technical justification. Happy to stand corrected by others…
PS I’ve now found your ‘maiden voyage’ post from Feb 2020, though unfortunately the Officiel Bulletin to which you then helpfully linked, seems to have disappeared from the OB site. I don’t suppose you have any copy yourself?
Thanks for your thoughts George1. I’ve just googled the title of the bulletin and got
I also have a pdf, however it may be easier for you to do a translation when you’re on the website? I remember posting on the forum a discussion I had with the France tax inspector about this document.
Regards.
Meant to add, where you said you were thinking of taking a 25% lump sum first on a substantial personal pension pot (taxable in France), I would not myself advocate that for any of us - firstly the 25% would be taxable in France anyway now that we are resident so there is no advantage. Even for generating a tax code - my understanding is one would not be generated on a tax free withdrawal.
Secondly, even if one was in the UK and then moved, the tax ‘saving’ is only 6.25% (France flat rate) of the 25% - quite small so why bother risking it being rejected for the flat rate tariff by doing two withdrawals?
I know there’s been suggestions on taking a small amount to generate the UK tax code which some tax inspectors seem to have OK’d - again would one want to take the chance, perhaps if in writing it would be Ok though…
Lastly on your current withdrawals, there was an option to spread it over a few tax years in France, as revenue exceptionelle, however I think that’s now no more. Check out the guide in France Property. But then if you’re now taking that pot in instalments, you can at least tailor them to make best use of the France tax thresholds / bands, as one would do in the UK anyway?
I would hope so, even though the lump sum would be tax free in the UK. The rules are you can exchange pension up to around 25%. Exchanging pension for a lump sum is optional in the scheme I was in and I’ve a few years to make up my mind - and do the research.
@larkswood12 Thanks very much for the link to the Bulletin Officiel.
I would agree with you if the above situation was being contemplated. However what I should have said is that I have already taken the 25% tax free lump sum when UK resident. I plan to take the entire remaining balance in one go, at some point in the future, now as a French resident. I would argue that the entirety of the plan in existence throughout the period of French residence is being taken as a lump sum. I thought that pretty much aligned with the SF member’s example you kindly mentioned yesterday? Obviously it’s open to the Impôts to review/challenge, but I believe it’s an appropriate position to take.