I don’t need people to go into depth here but just to ask if anyone has similar query.
Now sort of retired on UK govt pensions (paid into UK and fully declared here), I’m a year or so off getting UK state pension. I worked for a French company for over requisite amount of trimesters so I can draw down a pension. I haven’t done it yet as I’m leaving it until 67 maybe. However, having read a certain FB page I may be doing myself a disservice by claiming my French pension due to then being liable to more social security on my UK pensions. I read that taking a French pension makes France the competent state (therefore no S1), but ss contributions on the UK pensions as unearned pensions rises to 17.9%. This may wipe out any gains had by claiming French pension and more. If that is the case, I may see what the legal situation is to not claim the French pension and go down the S1 route if at all possible, which I suspect is not an option. But before I start asking a Notaire Fiscal I wondered if anyone else has encountered this.
My other option of course is to go back to the UK!
I don’t think there is an option not to take your French State pension. Before issuing my pension a couple of months back I was asked about working in France - since I haven’t it was easy to say no. But would you be comfortable lying? And if you are honest and you say you have worked here then it will trigger an assessment of who is competent state. The UK won’t pay if they don’t have to!
The administrations are increasingly joined up. I hadn’t got round to dealing with the S1 as covered by my partner, when 10 days back I got a letter from CPAM saying they had received info from British Government that I should no longer be ayant droit on my partner and had closed my account.
The penalties for fiscal fraud are a lot higher than what you might have to pay in social charges, and I would prefer to be poorer and not continually nervous of being found out.
I think I’m right in saying that there is nothing stopping you taking both pensions as you have contributed to both and are entitled to both. I know several people who have pensions from more than one country. The query is around activating an S1 and subsequent resposibility for healthcare, which I’m fairly sure that the UK wouldn’t accept.
Yes my wording was sloppy! I don’t think there’s an option to request an S1 if you are eligible for a french pension. - no matter how small. Whether you take this French pension is of course up to you, but you still won’t get an S1 legally. The last place you worked is your competent state.
I think there’s a very small amount of leeway on that e.g for my partner who set up a business as a micro-entrepreneur immediately before Covid (we’re both known for the impeccability of our timing). He never earned anything but was technically working here during this rather brief period. There was no problem with his getting an S1 as far as we could ascertain since any pension would have been centimes.
As I say though, that is an incredibly small amount of leeway
Good grief… sounds as if you are between a rock and a hard place…
Hopefully, with some gentle investigation, you can check things out and it will “all end well”.
I’ll ask my fiscal notaire later in the year when he’s less busy to establish the exact rules and financial implications. If it’s legal not to claim then that’s the way I will go, if not and I’m disadvantaged financially, UK here we come. I’m not that in love with France, never have been, and certainly not with the fiscal rules. There comes a time when you have to say enough is enough, and I think I’ve given it a good go after so many years, but I’ll see what my NF says before putting the house on the market!
I agree, a bit of one of those crossroads experienced in life. Once I’ve got the full legal picture from my NF I’ll pop it on here. I won’t be going down an illegal route. I’m really not worried about changing paths.
What I don’t like is the possibility or idea of losing hard earned pension money from the UK to such a high percentage. Some yes of course, we all have to contribute, but the way I read it is that UK pensions are unearned income, whereas French pensions are not, and therefore ss contributions are lower. As I said, I’ll publish a definitive answer when I get it, even if it’s not how I would like it to be.
As I worked last in France, it is declared my competant state and I will claim my pension rights starting next year as I left them to accumulate a bit more money but the UK state pension started this year and I do not come under the S1 umbrella. The CAF also have been in contact with the DWP in the UK as I have been an RSA beneficiary for the past 11 years and they wanted to know my pension entitlements so yes, the french side do talk to the UK authorities and I know CARSAT have already been onto them previously when they invited me to claim the french pension last year or have it delayed! As mentioned, fiscal fraud and non declaration penalties are extremely hard and your CDS would be in danger too!
I have absolutely no intention of operating outside the law, I didn’t say I would. I will seek further financial assistance from a notaire fiscal and publish his replies.
Yes there is ambiguity in the interpretation of earned and unearned. That is one of the reasons I want clarity before I claim any pension. I have 18 months before the UK state and 2.5 years before the age of 67 which will be the earliest I will claim the French one if I decide to. So I have time to decide, take it or leave it or leave France.
I have a French, UK and Irish state pension and my understanding is that it is the last jurisdiction that you worked in that is your competent state. That suited me so I didn’t query it
UK government pensions are UK taxable, not in France - only taken into account to calculate the ‘effective tax’ rate. There would not be any social charges?
That will be taxable in France at the ‘effective rate’ i.e. within the tax band of your pension + UK gov pension. Social charges will also apply at the appropriate scale to the France taxable pension only?
So the social charges will be levied on the UK and France state pensions only.
You could use the France tax simulator to do some modelling as to the figures, or just check the figures against the social charges scale?
I’d guess the France pension would have to be quite small to not be worthwhile taking?
A quick calc would be UK pension 10K GBP = say 11500 €.
The rate is 9.1% for 95% of pension amount so 994 euro for the year. Rate is 7.4% if income is less than 2000 euro / month?
So if your France pension is say 2000 euro / year looks like you might be better off?
That’s really good info. Thank you. I’ll do some calculations. Yes French pension not as grand as UK ones, although not insignificant. I’ll still chat to the Notaire Fiscal though to double check before I make decisions.
Out of curiosity what is a notaire fiscal? And where do they hang out?
You also need to check the UK side. A french notaire could say that in French law it is ok not to claim your French pension. After all that benefits France. However HMRC and DWP might not view this in the same way. That’s why the double tax treaty exists!
A fiscal notaire is a registered notaire who only deals with tax matters. Not an avocat.
I needed one to help with a legal but tricky issue a while ago. Expensive but well worth it.
Yes I wrote to the UK pensions a couple of months ago, but replies taking up to 6 months and phone lines constantly engaged, (myself and others have been trying for months, hence the letter)
When you say “the last place you worked” is your competent state, what is the definition of “worked”?
As an auto entrepreneur, I have “worked” for the past 7 years in France but most of our income has come from UK property rental. Whilst social charges are paid monthly, and all world income declared and French tax paid, I have never even reached the thresholds for any qualifying quarters towards any sort of French Pension and i never expect to get one.
I have always assumed that my UK state pension and past UK company pensions will still be paid in full and taxed as income in France and that an S1 would be issued once I reached the qualifying age?
I don’t know the answer to that. If you have trimestres then it’s pretty clear cut. But if you don’t?? Not even sure how you would find out authoritatively.
(1 trimestre is turnover around €1600 in a year, so maybe also need to check you haven’t actually got any!)
