Government Service Pensions - Advice Needed, Discussion and Issues Experienced

tax
pension
socialcharges

(Andrew Hough) #1

Hi all, this is the first topic/conversation I have posted, please be kind :wink:

I am due to be retired very soon and I am moving to our house in Normandy early 2018.
I will be in receipt of a Government Service Pension.
I have read a lot about pensions and what I can about service pensions, but information is not easy to find.

I will have no other income, and when my wife joins me in France, early 2019, she will also be in receipt of a Gov Service Pension. We will have no other source of income.

I have read that our service pensions are not taxable in France, and also not subject to social charges, is this true?

Have others in receipt of this type of pension had issues or problems?

Thanks in advance.
Andrew


(stella wood) #2

Hi Andrew…

sometimes it can be quite confusing…when folk talk about what is and is not taxable in France…

Absolutely all income needs to be declared in France…and the French Tax folk will decide if they want paying…

In my situation…They will look at what tax (if any) has already been paid in UK… and that will be taken into account. As one very nice chap told me… (years ago)… we will ask you to pay us, anything over and above what you have already paid, if OUR calculations (freepay etc) show you should… BUT we will not give you back anything if we consider you have already paid too much in the UK …(big grin from said gentleman)…

I made a great point of saying that French Social Charges should NOT be applied to our Gov Pensions … and this has been honoured ever since.

I think… allowances/freepay etc… are more generous here in France but someone with indepth knowledge will chime in, I am sure…


(Graham Lees) #3

You are basically correct in some of your assumptions; if you reside permanently in France under the double taxation treaty you should not be taxed in the UK but there are some essential steps that need to be taken to secure that privilege. You must register for tax in France and when you have a tax reference you can complete the France Individual tax form (in French and English) and take it to your tax office who will validate it. They keep the French version on their file and the English version is sent to the UK tax Office (at the address specified on the form). This will also cover your State Pension from the UK (assuming you will get one at the appropriate age) and you should then receive your Govt Pension untaxed by the UK. If you have paid UK tax in the meantime whilst all this is put in place there are mechanisms to recover tax paid from HMRC.
But be wary of HMRC; they will still allocate a tax code and if you are not on the ball and the amount of pensions income exceeds the ‘free pay’ limit they may ‘accidentally’ charge you UK tax on the excess. That is usually remedied quite swiftly by them if you ring the appropriate office in the UK they will remedy it promptly and any tax overpaid will be returned to you at a subsequent payment date.
I hope that helps. The Double Taxation treaty AFAIK is not subject to the vagaries of Brexit so matters shouldn’t change post leaving the EU.


(stella wood) #4

There now… I said someone would chime in…

and I should have mentioned that the French Tax folk are friendly. You will be able to discuss your situation face-to-face with them … (even if you have limited French skills)… there will be an office in your region and it is their job to help :smile:

and I notice you talk elsewhere of the S1 and Health… I would suggest you talk (again face-to-face) with the folk at CPAM…(Caisse Primaire Assurance Maladie). There will be an office near you. They will discuss your situation and advise what you need to do and when… and where (if it is not their area)…much better than doing things via Post/phone.

I sometimes accompany newcomers (with S1) to our local offices…and once the newcomers realize how friendly and helpful the officials are… they feel confident and able to go it alone in future. (more often than not) :smile:


(Andrew Hough) #5

Hi Stella and Graham,
Thanks very much for the replies. It is appreciated. Nice to know someone has had experience with the ‘social charges’ bit.
I understand then that my impending pension (UK govt service) will be taxed in the UK. I need top go to the tax office in Alencon, soon after the date of my move and register with them, twll them my circs. Also inform the UK that I have departed ‘Blighty’.
Wait until State Retiremenmt age, and ensure the State Pension (if they still exist then) is taxed in France.

Although simplified have I grasped it? :slight_smile:

I was planning on visiting the CPAM office Stella, after reading your previous posts. I think all of the offices I need are in (20 mins away from out house) Alencon, so when I get my S1 I will nip down there. (I qualify for that due to my ‘issues’ that have caused my retirement, really surprised that they said I would get one, but happy and revieved none the less). I quite like going and doing things myself, even though my French is limited, it is a good experience, and improves the old language skills.

Thanks again
Andrew


(stella wood) #6

Hi Andrew…

yes, you’ve grasped it… so you can relax just a little…and get to work on your French skills…:roll_eyes:


(Graham Lees) #7

Andrew
It will only (initially at least) be taxed in the UK if the amount of your pension exceeds the ‘free pay’ element - currently £11,500 each but the tax situation in France is much more generous (bear in mind the exchange rate and the fact that income from a pension is given an additional 10% reduction).


(stella wood) #8

Hi Andrew…

And…just another thought… Is there a possibility of increased allowances for a Disability Pension here in France… ??? I’ve no idea…but I do know the French Tax folk ask for a lot of information… and this might work in your favour… fingers crossed…:relaxed:

We’ve a Car Club meeting next Tuesday and there will almost certainly be someone there who knows the answer…anyway… I can ask the question…:wink:


(Andrew Hough) #9

Thanks Graham, I have received my ‘figures’ and it does exceed the tax free ceiling. So the proportion over the limit, will be getting taxed in the UK, as it is a Gov Service Pension.
The post was more to ask about issues (if any) people have encountered when declaring these types of income when in France and if people receiving them have been ‘taxed’ or ‘social charged’ incorrectly in France.


(Andrew Hough) #10

Cheers Stella, much appreciated. :blush:


(stella wood) #11

No promises… but, if I can get a word in edgeways, I will…(and some say women talk more than men… huh…)


(Graham Lees) #12

Andrew

That is also true about the Govt pensions. Fortunately for us, neither
Govt pension exceeds the free pay element so we are not taxed on them in
the UK.

However, once we started getting our State Pensions, the total amount
received exceeded the free pay element but as they are not classed as a
Govt pension, we are not taxed in the UK on them. In both our cases, the
year after we started getting the State Pension, HMRC changed our tax
codes to recover ‘unpaid’ tax. We referred to the completion of our
France Individual forms which they admitted they had and promptly
changed the tax codes back to the standard free pay element (£11,000 at
the time) and the tax collected by the Govt pension providers was duly
repaid at the next payment date. They admitted they had made a mistake
and promised that they would annotate our files to reflect the receipt
of the France Individual forms.


(Andrew Hough) #13

Graham, thanks for that. I have always planned on trying to keep our finances as simple as possible. It is a great piece of advice, because the state Pension will complicate things and I’ll need to keep a close eye on it.
Having never filled tax returns in, they will be daunting the first time I get one in France. But it is a challenge.
Thanks again for the details, it’s these things and people who share them that make it much easier for me to plan, and finally achieve the dream.


(Graham Lees) #14

Andrew

As others have said, the tax people here are extremely friendly and
willing to help with the completion of the forms. Not so daunting and a
friendly face in your local office will allay your fears.


(James Higginson) #15

Perhaps contact @Brian_Furzer who is one of our pension experts


(Lynne ENDERSBY) #16

Hi Andrew - I am recently new to the whole pension arena so please note not an expert. I would mention that if you are eligible to a lump sum tax free payment you may want to consider taking it before exiting UK as you would have to pay tax on it when you are registered in France albeit there are special rules.


(Andrew Hough) #17

Cheers Lynne. I will be moving/registering at an appropriate time :, It is sound advice and something that we all need to be aware of. Any lump sum I get will be paid in the UK this year, France registration tax etc from the start of 2018 :wink:


(David Martin) #18

Don’t forget that if you complete a tax return in 2018 it will be for 2017, tax free lump sums and all. It will also be the income that will be used to calculate your healthcare payments if you register through PUMA.


(stella wood) #19

As James has already said…I reckon a chat with Brian Furzer will be well worthwhile… :grin:


(Andrew Hough) #20

Thanks David,
I thought that you received your first tax return the year following that which you become tax resident. So If I register as tax resident in France in 2018, I was under the impression my first tax return will be May 2019; meaning 2017 earnings would not be considered?

Have I got this wrong?