Resident in France but taxed in the UK

I don’t think the topic has drifted too far from the original as the background seemed to involve some element of x-border ‘arrangements’? And as such I do find it very interesting also!

Rather than remote working, I’m inclined to suggest wouldn’t it be easier* just to jump on a train or plane - get the graft done in the UK and come back - job done! One is still allowed 25% of remote working in France I think @toryroo

*after we’re allowed back in :slight_smile:

It is liekly that the tax in the UK exceeds the tax due in France and thus under the reciprocal tax treaty there is nothing to payay in France.

However, there is a more fundamental question, why as a UK non-tax resident why pay tax in the UK as opposed to paying tax & social charges in France thus funding any health/social benefits you may need.

My state pension is taxed in the UK (as per the tax treaty) and therefore have to be declared here in France but aren’t taxed but the pitiful interest I receive on my bank accounts in the UK are paid gross and declared here in France.

@anon65742194 I’m confused;
the UK State pension is not a Govt Service pension and therefore should not be taxed in the UK if you have competed and returned the Form France-Individual stamped by your your local French tax office.

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State pension is taxable though - if your income from other sources takes you above the personal threshold.

And, as you correctly say they are not a “Government pension” so, one presumes, eminently taxable in France?

That’s an odd quirk though Paul. The State pension itself won’t generally be taxed, but the other pensions which take you over the free pay limit probably will if they are Govt Service pensions. If they are not Govt Service pensions, they will be subject to tax in France, not the UK as per your tax code issued by HMRC.
As an example, a Teachers Pension holder’s tax position was changed by HMRC incorrectly and the TP was taxed when assessed with the pensioner’s State pension. Their file had been incorrectly marked and when reminded about the existence of the Form France-Individual, they admitted their mistake, reset the tax code and the TP provider received a new notice from HMRC permitting the refunding the tax which had been overpaid by the TP provider. No tax was collected from the tax payer against their State pension, only the TP.
The maximum State pension is (currently) £179 .60 per wek * 53 weeks (paid every 28 days) which totals £9518.80 which is below the £12,570 pa free pay tax allowance (2021-2022).

Depends how you look at it I suppose - as you say it falls below the individual threshold so if you consider it your “first” income it isn’t taxed. It counts towards your allowance though so you can’t earn much on top from a personal or workplace pension before you do start to pay tax.

My pension forecast seems to suggest I’ll get more than the current maximum state pension - presumably because I built up some SERPS pre 2003, however I lose about £28 in “COPE” as the NHS pension is, or was, “contracted out”.

Unfortunately, like a lot of people when younger, I didn’t pay enough attention to my pension so am now stuck with working until current state retirement age to make sure I’ll not be on the breadline post retirement.

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And if you regard it as your last income it’s taxed at your marginal rate :slightly_smiling_face:

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Can someone explain to me why government-job ie civil-service job ie fonctionnaire? pensions are not taxed

If you are referring to “not taxed” being not taxed in France, it is because it is agreed that those pensions are the province of the UK Govt to tax.
So, for example, If you are a pensioner in receipt of State pension, you complete the Form France-Individual (signed off by your local French tax office) which is then sent to HMRC who then adjust your tax code so that pension is not taxed. If however your Govt Service pension is of sufficient size to cause HMRC to tax it (because it is above the “free pay” allowance in the UK, the amount of tax you pay is reported to the French fisc on your return which is then taken into account so you do not pay the tax twice but you still have to declare the UK Govt Service pension to the French fisc along with all your world wide income.
A simplistic explanation but hopefully sufficient to give you the basic idea of how it all works.

A tax person once explained why some (not all) government pensions are taxed in the UK when the State pension isn’t. There was something to do with the State pension being considered as earned income and Government pensions more like benefits. Can’t remember details. More prosaically it could just be that UK would lose a lot of tax income if all non-resident Gov’t pensions were not taxed in UK.

this reference seems to confirm the point made by JJ that the State pension is regarded as earned income but is silent on the issue of Govt Service pensions.

I think it’s more about certain pensions being in respect of services rendered to the state in question. Here are the sections of the Double Tax Convention relating to pensions.

ARTICLE 18
PENSIONS

  • Subject to the provisions of paragraph 2 of Article 19, pensions and*
    other similar remuneration paid in consideration of past employment to a
    resident of a Contracting State shall be taxable only in that State.

ARTICLE 19
GOVERNMENT SERVICE
1. Salaries, wages and other similar remuneration, other than a
pension, paid by a Contracting State or a local authority thereof, or by a
*statutory body of either, to an individual in respect of services rendered to *
that State, authority or statutory body shall be taxable only in that State.
However, such salaries, wages and other similar remuneration shall be
taxable only in the other Contracting State if the services are rendered in
that State and the individual is a resident and a national of that State without
being also a national of the first-mentioned State.
2. Pensions and other similar remuneration paid by, or out of funds
created by, a Contracting State or a local authority thereof, or, in the case of
France, a statutory body, to an individual in respect of services rendered to
that State, authority or statutory body shall be taxable only in that State.
However, such pension shall be taxable only in the other Contracting State
if the individual is a resident and a national of that State without being also
a national of the first-mentioned State.
3. The provisions of Articles 15, 16, 17 and 18 shall apply to salaries,
wages and other similar remuneration and to pensions in respect of services
rendered in connection with a business carried on by a Contracting State or
a local authority thereof or by a statutory body of either.
4. Notwithstanding any other provision of this Convention:
(a) the pensions referred to in paragraph (4) of Article 81 of the French
tax code (code général des impôts) shall be exempt from United
Kingdom tax, regardless of the nationality of the pensioner, so long
as they are exempt from French tax;
(b) the pensions referred to in section 641(1)(a) to (g) of the Income
Tax (Earnings and Pensions) Act 2003 and benefits paid by reason
of illness or injury following the termination of service in the
armed forces or reserve forces referred to in section 641(1)(h) of
the Income Tax (Earnings and Pensions) Act 2003 and injury and
disablement pensions payable under any scheme made under the
Personal Injuries (Emergency Provisions) Act 1939 shall be exempt
from French tax, regardless of the nationality of the pensioner, so
long as they are exempt from United Kingdom tax. However,
paragraph 2 shall apply to such part of any income from those
pensions as is not exempted from United Kingdom tax.

Izzy x

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You can read the whole of the DTC between UK and France here, for insomniacs only!
Izzy x

That’s more like it @IzzyM :slight_smile: ! Hint of EU functionaries looking after themselves?

apologies to genuine ex-UK fuctionaries

Apologies accepted :wink:

Oh, I wish I could be a UK fuctionaire, ducky :open_mouth:
What does entail?

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