Wondering if there is a French equivalent of a I can start over here?
Hi… yes and no… there is a personal pension you can set up called a PER (Plan d’épargne retraite). The underlying investments aren’t as flexible as a UK SIPP and it’s mainly funds instead of individual shares and difficult to get exposure to non Euro assets.
In terms of tax relief… this is only a basic explanation but will give you an idea.
If you earn €100k this tax year and invest €10k into your PER then the following tax year thus €10k comes off the top and you pay tax at €90k.
You can only have one per household if you have a joint declaration and you can catch back 3 years.
Linked to state pension age 64 unless you buy a property for retirement … the income is then taxed.
If you are a high tax payer in retirement I’d invest into an assurance vie instead as you still get the tax deferred growth but return of capital and tax benefits on drawdown.
I’ve done a video on it a while ago below.
If you want to move other non French pensions to it you can’t… old French PERP and Madelin Contracts you can but nothing non French.
If you want one you can set it up for as little as €75 a month!
If you need more help just let me know!
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Thanks @Gareth for the tag! I try to check everyday if I can but being tagged always helps me find the posts o can help on
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@Dave_Lawson
Hi there - my question is also about a SIPP kind of situation
I am currently a recently retired 64yo uk citizen living in France as a French tax resident, with an S1 - so not currently paying social charges on my private pension (and only income). I have an opportunity to do some contracting work for a french company for about 60k/year. But I understand if I just contract direct to them or via a French company, I would start paying social charges on all of my income, not just the new, making the opportunity much less attractive.
So I am hoping to find a tax efficient way to take the revenue - such as setting up a uk company, paying the revenue into a SIPP & not drawing down on this until after the contract finishes in 2-3 years - but I am concerned the French tax authorities wont recognise such a scheme & just tax the SIPP contributions as income as it happens. Perhaps the only way out of that is to return to being a UK tax person? Or would a PER give me similar benefits?
Hi, If you are living in France and decide to work then you’ll need to pay tax on that income in some way or find a way to get it into France as it’s moveable capital.
If you set up a UK company and then drew the money as dividend you’d pay 12.8% Tax and 7.5% solidarity rate for the social charge. dividends are paid after corporation tax so will end up being quite high though all in.
You could make contributions to your UK pension from the company and get tax relief for the business… but of course when you access the funds it will still be at your marginal rate in France. Can’t remember the rules for companies and pension input for an overseas director with no relevant UK income. I’ll try and track it down but you’ll need to ask a UK account/tax adviser to be sure you can get the full £60k into your pension.
So In theory yes… but the correct way would be to set up a micro entrepreneur as a non regulated professional liberal. Then declare gross payments into the system… of course this could mean France becomes your competent state and risk the S1. This is where I am not an expert in determining your competent state and I’d suggest this route would be better and more transparent. I’d simply ask the tax office or ask for a rescrit on the impact of doing this…
https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:32004R0883&from=EN
Article 23
Right to benefits in kind under the legislation of the Member State of residence
A person who receives a pension or pensions under the legislation of two or more Member States, of which one is the Member State of residence, and who is entitled to benefits in kind under the legislation of that Member State, shall, with the members of his family, receive such benefits in kind from and at the expense of the institution of the place of residence, as though he were a pensioner whose pension was payable solely under the legislation of that Member State.
Hi Dave
Thanks. I am already a tax resident of France. My only income is a USD private pension from my old employer.
I wasn’t thinking of taking the income as dividends, rather paying them into a SIPP so there would be no income for me. The new contract may only run for 2 years & I can survive fine on current pension until then
My regular French tax accountant doesn’t know too much about UK possibilities but thinks the French would just say all the SIPP contribs are taxable immediately …. and take the S1 away at the same time
Am I snookered?
I think you need to explore it more… if you work then would your competent state change. If yes then it’s an issue for the S1.
Sounds likely - likely you would have to do the work in the UK as a ‘frontalier’ otherwise France could consider you are running a France ‘sub office’ to manage the business in France if you set up a UK ltd?
As you have a S1 maybe you already are / were a cross border worker?
Perhaps you could reverse the cross border consideration and ‘second’ yourself from the UK to France for the 2 year contract duration? That would get you out of the social taxes part - you’d need to get an A1 from the UK.
But it all sounds rather artificial - and some may opine better to take the loot and pay the taxes - though I’m sure a PER would allay some of the pain.
I think if there was a way to obtain France tax relief on France income for payments into a UK personal scheme half of France would be beating itself to Uk shores!
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