Good day all from sunny England! We are in the final stages of moving to France and as a break from the packing I rang HMRC as the info I’d found online was somewhat complicated . My brain is I confess somewhat addled by lack of sleep & perhaps my age but I ended up more confused after talking to the HMRC’s “Technical Expert’. He confirmed my thoughts that I need to fill in a Form P85 online once I’ve left the UK (it won’t accept a date in the future - I’ve tried) . Better hope I can get online in our rural retreat then! He also said that I will need to register as soon as I can after we arrive with the French Tax authorities and complete an English and French version of the Form France - Individual . This requires a stamp from the French tax office and them to provide me with a tax reference so I guess a visit will be required (joy). Without going into lengthy personal detail I was somewhat bemused by his answer to my query about my pensions . I get 3 small occupational pensions one of which is from employment with a local authority. It’s only a couple of thousand but every little bit will help as they say. I understand there are reciprocal arrangements between the U.K. & France but the TE told me to leave my local authority Pension off all the forms as it will continue to be “taxed” in the U.K. although I’ll have the personal allowance to set against it (I actually get less in pensions than the entire U.K. personal allowance ). So . Is he correct? Seems a bit odd given that the French system seems to expect one to declare all Worldwide income yet HMRC told me to leave it off the forms!
The HMRC are experts in their own forms, but not necessarily in the french ones. When you visit the french tax office they will explain. But basically when you get to fill in a tax return here there is a different bit for things like your local authority pension that will continue use to be taxed in U.K. So you do declare it but get a credit for the tax you have already paid in U.K.
France will require you to declare ALL Income, no matter where it comes from… every year (Jan-Dec) in arrears… so you will declare Income for 2018 in 2019.
Being your first Declaration… you will make this in person at the local Office… during May 2019… the staff will be pleased to answer all your queries… so much nicer being dealt with face-to-face… until you get the hang of it.
France will take into account any Income Tax paid in UK and will offset that against any Income Tax that France thinks is due to them.
Investment Income may also attract additional Charges… just something to be aware of…
Your local authority pension (aka Govt pension) will be assessed for tax in France alongside all your income but will be taxed in the UK so you must declare it (en Euros).
There are many threads about how to convert sterling to euros so I won’t bore you with that just now.
As others have said, under the double taxation treaty, any tax you pay against the Govt pension will be given consideration when assessing your tax bill in France.
If you have paid UK tax in circumstances where you shouldn’t have between the point of leaving the UK permanently and completing the France Form Individual (FF-I) (as described by HMRC) you make a claim for it alongside the submission of the FF-I.
Thanks both, you’ve confirmed my thoughts too and thank you for replying so quickly too! It all seems terribly complicated to my panicked brain. I’ve a medical condition that makes it hard to retain information- not serious but very annoying at times! I was a bit phased by the HMRC TE saying I needed to fill in the Form France - Individual virtually as soon as I set foot in France too! I can’t see how I could if I don’t have a French tax reference yet. Do I do that as soon as we arrive or do it when I complete my first tax return? We don’t have huge amounts of money so just need to ensure every bit I have is treated correctly. I have a small lump sum left after buying the house and a car which will probably end up staying in my uk bank account (for emergencies) and will transfer a small sum as contingency should we need to top up my pension income . We will if I’ve got my sums right be living on about €12500 a year for a few years until I get my state pension so hardly in the “rich league” . Our income & savings should see us through if we are prudent and don’t go spending on unnecessary things. Our house is quirky but perfectly habitable and we have simple tastes and lifestyle.
I’m sure you’ve/we’ve talked about it elsewhere… but… do remember that Healthcare Insurance can be quite expensive… folk who reckoned they could manage without, have sometimes come unstuck and been landed with large bills… just saying…
You might find it financially advantageous to keep more money in France than in the UK…
It can be very confusing because the French tax system and HMRC have their obvious differences. The most obvious is the tax year but others like the definition of tax resident are also different. Once you are resident in France follow the French guidelines, there is plenty of information around telling you when to complete your first tax return and what income has to be taxed here and that which must be taxed in the U.K. and reported in France.
As a PS to Stella’s post, healthcare is not optional, you have to join the French health system or have private health insurance. If you opt for the former route you will be covered at 70% of the cost of most care and can buy into a top up Mutielle to cover the total cost of your healthcare. It’s the top up which many people try to do without and a few of those get burned when they run up large bills for hospital care. If you need to ask specific questions about tax or health issues start a new thread.
Whatever you do, don’t panic. I have to say we completely forgot to fill in form p85. We didn’t remember until months later, and then sorted everything out by sending in a letter with our paper self assessment return later that year. Keep your records in order and make sure you understand everything first before sending forms off.
(That applies also to shifting money about as you can gain or loose a fair bit by exchanging at the wrong time in the wrong way…look into it before you leap)
I’ll bet there’s no way of being tax resident in neither country though
HRMC tend to be reluctant to let people go.
And remember that any interest paid on savings in the UK will attract CSG in France (even Premium Bonds which are free from tax in the UK).
There are many schemes in France for tax free savings; some even give more interest if you don’t (or rather not required to) pay tax .
I can also mention that pension income in France attracts an extra 10% allowance before becoming liable to tax and you are taxed jointly in France as a couple, not singularly as in the UK.
Keep hold of your (at least one) UK Bank account and (if you have one) a credit card account in respect of which it is best to pay off in full monthly from your UK bank account so you don’t miss payments. It will be the devil’s own job ro set these up from France after you leave the UK (money laundering regulations) and set up a foreign exchange account too before you leave for the same reason. The Banks are notoriously expensive when it comes to exchange fees.
The France Individual form cannot be submitted before you make your first french tax declaration , so any UK tax overpaid in the meantime is refunded the form is received. You can download the forms now -while you have reliable internet , and return them by post from france when appropriate.
It’s worth mentioning that your first French tax return, submitted during the April/May of the year after you arrive in France, has to be a paper copy. For subsequent years an online return will be the norm.
Thanks Graham. Yes I’ve done all of these . My credit cards were the easiest of the lot to change the address on - 2 minutes over the phone . My bank - who I’ve been with for 26 years took about 45 minutes & even ran a credit check on me. I already have my credit cards set up to pay off the balance each month on direct debit but I doubt we’ll use one of them much as they charge large non £ transaction fees. I set up a currency exchange account to buy the house and car but wasn’t that impressed with their rates and they made a few errors so may use the online account I set up for a trip earlier this year. It was working well until the flipping card got cloned and I lost confidence in it even though they did sort it out quite quickly in the end. As I said - we will be living on just my small occupational pensions for a while and our modest savings. We don’t have an extravagant lifestyle and the house is liveable albeit some of the decor and fittings aren’t to our taste . The village has been welcoming and there are a few expats who live there part of the year and one couple who live there permanently. The wife is a translator who is authorised to stamp “official” documents and has offered her Devi es should my French not be up to the task. I think I just got a bit thrown by the so called expert in HMRC. I’m still not sure WHEN I need to complete and send back the France - Individual forms - do I do as he says and register with the tax authority as soon as we land in September or do I complete these when I do our first return in May (or whenever it is for the Aude)?
Sorry - just seen the other replies . Thank you so much you guys . You’ve been so helpful. Hopefully I will now sleep better tonight and things won’t seem so monumental tomorrow:blush:. Back to the packing … made twice as difficult thanks to YT having tried to “go green” and wrap stuff in corrugated cardboard. Didn’t work so bubble wrap it is
You relax Vanessa… Moving home is a stressful time… and moving abroad is about double that… (at least)…
All will be well in the end… sounds like you are going to a lovely village environment…
Personally, I use CaxtonFX for currency transfers which I find most helpful.
Their currency card is very useful since I can load Euros on to it when the rate is (more) favourable and using their app on my smartphone, I can turn the card off if I suspect dodgy activity (which, so far, has not occurred). The advantage here is that you can still get your Govt pension paid in Sterling (which is what we do with our Govt pensions) since the local Govt pension providers usually do not offer a good rate of exchange (in our experience) and then when the time comes to get your State pensions, HMG do give a superior rate closer to the inter-bank headline rate.
If you get a French bank account, you usually can get a debit card to pay transactions in Euros or use the currency card. Using a UK credit card for FX is not a good idea (as you have already found).
We only use our UK credit card only when visiting the UK (rarely these days) and for making purchases from, say, Amazon.co.uk although you will find that making electrical purchases through Amazon.fr or .de (Germany) can be done in Euros. Electrical stuff from the .fr site is preferable, as you get the correct plugs that way…
It might be as well to make yourself known to your local tax office sooner rather than later, as your first tax return will fall after the official Brexit date. It may well not be in any way necessary but having bits of paper that show you were resident before then may one turn out to be useful.
In arrears? Even from 2019?
Portugal or Malta are the destinations for that Paul. I understand there’s no tax for the first ten years if you buy a home in Portugal. I don’t have the full details but I found out one of my astute ex colleagues has decamped to the Algarve.