It isn’t just income tax/social charges. When I moved to France 20 years ago the local taxes were low. My UK council tax was about the same as my mutuelle top-up so there was little difference in outgoings. However now taxe d’habitation and taxe foncière are similar to my UK council tax so the mutuelle is a significant additional cost (especially as it has increased with age as well as with inflation).
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I thought that many, if not most, don’t pay Taxe d’habitation any more… you must be one of the unlucky ones.
There certainly are swings and roundabouts when looking at charges and expenses in both countries.
I’ve occasionally looked at UK council tax figures, checking our old property and France still wins out for us… thank heavens.
Hi @Larkswood, you’ve mentioned the 6.75% (7.5% -10%) before. Is it just a flat rate? Also I was mentioning this to someone else last week.
His thoughts were about encashing a set of pension funds he left in England. But although he’s a longstanding French resident, he was thinking of doing the encashing and declaring for tax here in France but actually continuing to keep the funds in the UK once encashed. He was thinking of buying a property there for rental or even just keeping it invested (obvs further gains he’d declare and pay tax on here). I gather he has money managers he trusts in the UK, but doubtful about France.
Do you know if a physical move of the money to France is required at the same time as cashing it in, declaring it and paying the 6.75%?
No probs, pension lump sums are here -
Taxation of Pension Lump-Sums in France | French-Property.com.
You’ll see it’s a flat rate 7.5% but you can deduct 10% of the lump sum = 6.75% on the whole. As far as I can see, one enters the amount in a field on the france tax return in the pensions area - box 1AT, the simulator guide comment is below -
The whole amount withdrawn in the UK will be taxed at an emergency code - there’s been stuff posted about that too.So by default it has to stay in the UK initially. A double tax form france indivduelle will have to be filled in with the provider tax code, stamped by the France fisc and sent to HMRC. The HMRC refund could take a while - various people have commented. I’d be minded to think about timings for doing the euro exchange calc, withdraw on a particular date when its down (seems most days now), you might make a bit of a gain if the £ goes up again. I can’t see why you would need to actually convert it on that date. Or at all. Alternatively if you did convert it all, in one or several goes, another approach could be to declare the actual euro amount converted instead?
PENSIONS DE RETRAITES EN CAPITAL TAXABLE A 7,5 % CASES 1AT et 1BT
Sur demande expresse et irrévocable, les pensions de retraites versées sous forme de capital peuvent être soumis à un prélèvement de 7,5 % libératoire de l’impôt sur le revenu. Ce prélèvement est calculé sur le montant du capital perçu diminué d’un abattement de 10 % qui n’est pas plafonné. L’option n’est possible que si le versement de ce capital n’est pas fractionné et si les cotisations versées pendant la phase de constitution des droits étaient déductibles du revenu imposable.
Indiquez case 1AT ou 1BT le montant des pensions avant déduction des cotisations et contributions prélevées sur les pensions.
Hope that all helps!
Edited to say all rates exclude any social charges (S1 etc) - however one advisor I spoke with said they have never seen any charges applied in any situation - a check on the simulator could be the first stop here?
@larkswood12 sorry if I’m being slow here - where is the simulator you mention? I’m thinking of cashing a small pension and want to explore options. In my situation, the quota part looks interesting.
Thanks @Larkswood12 I will pass it on.
Some of the text appears to say the whole of each fund must be cashed at one time. Plus the bit about the money built up in the fund having to have been deducted from taxable income is interesting.
Yes, the whole pot must be cashed in whole lump sum, some people have done this after taking a 25% tax free UK lump sum before moving, but the tax difference is so small, probably best not to take that chance.
And yes, the funds must be tax deductable in some way, all HMRC pensions are so that’s no problem. In fact it’s a certain percentage of the funds - the majority must be tax deductable but not all have to be.
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