Howard
I seem to recall some discussion on the subject of Government pension before and it was suggested at the time that one reason HMG tax it at source (assuming it is substantial enough to attract income tax in the first place) is that the net cost to the exchequer would increase to the benefit of the foreign State who would instead collect any tax due on it (quelle horreur!) as HMG would have to pay it gross and therefore free from any deduction.
I can see the point.
This is all very interesting, and very relevant, as we are currently in the throes of sorting out our tax situation. I have spent a considerable amount of time during the past couple of weeks, speaking with HMRC (or HM's reps!) about this. My wife and I are both on the State Pension from the UK. Each of us has a modest "civil servant" occupational pension - in my wife's case, very modest! I used the lower-case there, as neither of us was in the political side of the Civil Service. My wife is also the sole owner of the small flat that we lived in prior to coming to France on a 'permanent' basis, and which is now rented.
If I have understood everything correctly, our occupational pensions must be paid into our UK bank accounts. Our state pensions may continue to be paid into the same accounts. However, we will not be taxed on our state pensions as neither of them is even close to the personal tax-free allowance. I was told to download Form S1 from the HMRC website, in both English and French. We have to take both copies, for each of us, to the Tax Office in Bergerac. They, I understand, will verify our residency, and stamp the English language copies - which will then be sent to the UK. They will, of course, retain the French language copies for their own records. As far as I can make out, we will not be eligible to pay tax on our state pensions in France - because of the 'joint' amount - and will not be paying tax on our occupational pensions in the UK - because of the modest amounts involved.
My wife is waiting to receive self-assessment forms from HMRC in order to declare the income from the flat - but even that is not expected to bring her into the tax bracket.
Perhaps I am still living in "dream-world" - but it seems to me that we will be tax-free in both countries!!! :-)
There is a lot of misunderstanding in this post. You cannot 'choose' where to be taxed unless you have a residence in both UK and France and even then it is not a simple choice. Government pensions have to be taxed in UK but must be declared in France. State Retirement Pensions are paid tax free and are taxed in France. If after adding all your income together and taking account of the number of people in your 'Foyer' you are below the threshold you will pay no tax in France. But don't confuse not paying with not being liable for tax. If you have any income you are liable - if it it below the threshold you won't pay anything.
Rental income from a UK property is taxable in UK and also liable for Social Charges in France as is bank interest. It is a complex subject so get proper advice (not just posts on this site) or risk a fine - as we found to our cost a few years ago.
Sean
If you are tax resident in France as your post suggests, and are not paying income tax in France, you are I think committing a very serious offence liable to very heavy fines at best.
I am not sure how far the French Impots can go back (6 or 7 years??), but the fine is all the tax due times 2, as a minmium. But there may also be punitive fines as well on top.
Whatever advice you received all those years ago, which I am sure was wrong, it is certainly wrong now.
What you do about that is up to you, but you need to take some professional advice to get out of the very, very deep hole you have dug for yourself.
And very wrong - unless you have other circumstances not mentioned in your post. You cannot choose where to be taxed.
Seems like I was and am not the only one confused about double tax affaires...But I think I have this sussed out now thanks to others input..we are all being robbed blind...lol
I can only suggest you take it up with HMRC as when i first became retired and claimed for my pension both pensions combined were more than the tax free allowance so i was paying £97 per month with my tax code after contacting the HMRC completing the double taxation forms and being told by a French accountant who to contact in the UK i was then removed from the tax system and opted to pay in France and given an NT code so for the last 3 years i have not paid tax in the UK nor any in France and each year my tax return is completed by an accountant plus as my pension is below the threshold i no longer pay tax habitation nor TV licence
Yes, it is part of the double taxation treaty. Certain income has to be taxed in the country of origin - government pensions and rental incomes being the two most important to us in France. The governments want to tax the pensions they pay so that it costs them less. But they still have to be declared in France and are taken into account when assessing French tax liability. Credit is given for tax already paid in the UK. My wife has a teachers pension taxed in the UK but it is well below the personal allowance so she doesnt pay anything - yet!
Dick Smith..'fess up' please....
Are you, or were once.... a member of the Accounting profession ....
(thanks for this much clearer explanation...which I am going to save....)
No, I was an air traffic controller, but having been stung by the Fisc I made sure I understood the system as best I could. I always say that everyone's situation is different and so proper advice is the best thing to get. The trouble with forums is that people leave out certain crucial information when posting and it gives a false impression.
I have been here for 17 years and the number of ex pats who do not declare and fly under the radar for many things, cars, Taxes and Health...is mind boggling, just sayin!
The point i agree with is that forums do tend to be a little misleading but having dealt with the tax and VAT when in the UK i would not take chances as i know a few do here in France not admiting to their true income . I most certainly do not want to be called in to explain how i was living on 100€ a month as one person had to.Iwould assume that my situation would be aplicable to anyone who does not draw a UK Government pension speak to an accountant and the HMRC as i did
Always been the case Richard they think out of sight out of mind but no one is out of the mind of the HMRC or VAT as the case with their cars talking to a guy at Carcassonne airport he had been running 4 cars for some considerable time on UK plates no Mot no UK tax until the day his son had an accident then it hit the proverbial fan ,one couple bragged they had never paid any of their council tax
Hi John have you or your wife heard of the WASPI campaign on Facebook? Please have a look, lots of info for ladies born in the 50s and effected by the state pension age rise. Also please sign and share the government petition.
If you have a government pension it can be paid direct to your French bank account - and at a better conversion rate than is available commercially as the government does it in bulk. I have several friends - ex military, police, teachers -who do that and your French receiving bank should not charge to receive it. They will however be taxed at source if tax is due.
If you live in France you pay French tax on all earnings anywhere in the world and this includes state pension which of course you don't pay tax on in Britain.
You dont pay tax on your state pension anywhere if its below the tax allowance , if your combined income including your state pension and private pension exceeds your tax allowance you pay tax on the amount over your limit which in the UK is or will be £11K
I made enquiries about this, with the Teachers pensions people....but all they could tell me was that they had recently changed the commercial company they used to do this ....I think it may have been Western Union...they weren't able to tell me what this preferential rate would be, which rather unimpressed me..Anyway I don't bother with all that now as I don't see how Transferwise rates could be beaten....
Gosh! No-one been on here since 2016! Discovered this today on the Gov.UK website when wondering why my State pension had not been paid: “If you live abroad and your payment is due in the same week as a US bank holiday, it could arrive one day late. This is because a US company processes these payments.” It is Martin Luther King day today, RIP Martin.
That and Washington’s birthday…teaches us a more positive side of American history.