Double Taxation Nonsense for Govt Pensions

pension

(Dan Wood) #1

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?


(Richard Fysh) #2

Yes. My wife and I are in the same boat and have been double-taxed this year (2016) in the same way. In addition they have tried to levy Social charges on our pensions despite us having the S1s and having repeatedly, every year for seven years, made and won the same case that this is not correct. We are challenging this and expect the money to be repaid sometime in the next six months! This is the first year we have had this problem and it is because the exchange rate was so favourable to us in 2015 and thus pushed our euro income up to become liable to tax at the top rate. At the same time we have been paying less tax in the UK of course.

So far as I know there is no way of avoiding this except for making sure your income is sufficiently low to avoid higher rate taxes. That will be the one benefit of Brexit for us. God only knows what the French will do when the UK really does leave the EU! Maybe that nice Theresa May will let us export the whole of our Government Pensions to France?