Strange conversation with HMRC

Don’t know if this may be useful to anyone but I use it each year …

https://www.hsbc.fr/1/2/en/personal/investing/tools/income-tax-simulator

Are these pensions above the UK ‘free pay’ allowance (I think c£11500 each)?
Our non state pensions (UK Govt, each) are below the free pay threshold so we pay no UK tax on them. One year, HMRC got it wrong and charged us tax based on the State Pensions as they had ‘forgotten’ we were covered by the France Form - Individual and the State Pensions should not be included in the tax calculations. One phone call to the tax office had it sorted and the tax we had paid on the UK Govt pensions was refunded (deep joy).

Aha! Graham I think you may have hit the nail on the head! I have actually recently sent off a claim form HMRC on that basis, detailing our tax status in France, and we await a response.

Will wait a while yet to hear, then follow up with a phone call to see what’s in the pipeline, if owt.

Thanks to all for replies and suggestions :pray::relaxed:

Why wait Peter?
Just take the bull by the horns and ring them. They should have your FF-I on screen and will rectify it there and then and then diarise it so it doesn’t happen next and subsequent years.

Will do, Graham. I often need a kick up the Khyber! :roll_eyes:

Don’t we all from time to time… some more than others :wink:

In the UK there is a distinction between domicile and residence. Simply, if you spend more than 186 days in France you will be tax resident in France. But, if born in the UK, with parents born in the UK all holding (or entitled to a UK passport ) you are domiciled in the UK.
There is a double taxation agreement between the UK and France (existed before the EU ) Praticaly, if income arises in the UK it is subject to UK tax and if domiciled in the UK the taxpayer reduces their UK taxable income by their UK personal allowance.
Pensions paid by the UK government can only be taxed by the UK Government. Check on the position of Local Government pensions - if possible obtain documentation from the pension administrator detailing the applicable legislation, and if the pension can only be taxed in the UK then the "technical expert’s advice is sound and I would add a not to your French return stating that you receive a pension covered by - include a copy of the documentation provided by the pension administrator (try and avoid giving details of the annual amount ).

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Sorry to disagree - utter nonsense!
I was born in the UK to parents living in UK with UK passports but now I am domiciled in France.

domicile:

past participle: domiciled

treat a specified country as a permanent home.
past tense: domiciled

John… I think you may be misinformed… as far as I can find out…

Anyone who is making a Declaration of Income… here in France… must declare ALL of their Income (from whatever source) … not pick and choose which bits to mention and which bits to leave out…

The Declaration covers the entire year… 1st January to 31st December… and they want the full amount of each and every source of Income…

As we always advise… take all your paperwork to the Tax Office, they help fill out the first Declaration… and after that you can do it on-line…but always you can ask their help… on what should go where.

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cent per cent stella!

I did state that the UK makes the distinction between domicile and
residence. Without domicile those without domicile are unable to set
their UK personal allowance against UK taxable income.
Residence is a temporary state and can be “managed”. In simple terms,
domicile is a state that an individual is born with and remains with
them throughout their life and can be “bequeathed” to their offspring

https://www.gov.uk/guidance/deemed-domicile-rules provides more detailed
explanation.

I am laughing so much, the tears are rolling down my cheeks! :astonished:
Utter and complete nonsense
Where on earth did you dig that up from?
I am - as I have said - domiciled here in France and in receipt of the State Pension and Govt pension.
My Govt pension is - as you rightly state - taxed in UK (but not exclusively!) As it below the UK tax free pay threshold, there is no tax to pay in the UK and my State Pension is not assessed by HMRC for tax but what I receive is subject to examination for tax purposes by the French Tax Authorities in line with the double taxation accord which exists between France and the UK.
You still have it wrong in my view; the UK, like France, assesses where your principal fiscal presence is defined. Having left the UK 10 years ago lock stock and barrel for France, this is where I am domiciled but my legal residence is defined by the rules of the State where I am domiciled.
As for ‘bequeathing’ domicile to offspring… well, words fail me. I need a lie down.

Thankfully I don’t have to worry about this sort of thing at the moment

However I note that John’s view is somewhat echoed by this comment:

taken from Tax on foreign income: 'Non-domiciled' residents - GOV.UK

It’s actually pretty complex though - see chapter 5 here, some highlights:

  • you can’t be without a domicile
  • you can only have one domicile at a time
  • you’re normally regarded as domiciled in the country where you’ve your permanent home - there is more about residence for domicile purposes at RDRM22310
  • your existing domicile will continue until you acquire a new one
  • your domicile is distinct from your nationality, citizenship and your residence status, although these can have an impact on your domicile

there are also different types of domicile (domicile of origin, domicile of choice and domicile of dependence).

I never knew it was so bloomin’ complicated :frowning:

Oh yes Paul. It’s incredibly complicated. The UK definition of domicile is not the same as the French definition and, for most people, is a bit illogical.

For UK purposes ONLY, if you are born in the UK with UK domiciled parents then the UK will be your domicile of origin. This will remain with you for your life unless you acquire a domicile of choice. To do this is incredibly difficult and requires you to demonstrate that you intend to live permanently outside the UK (and even to be buried/cremated outside the UK). Retaining a burial plot in the UK can be fatal to a non-domicile claim.

For those with a UK domicile of origin the most important effect is on inheritance tax. While you remain UK domiciled (or you acquire a UK domicile as a result of residency) you will be subject to UK inheritance tax on worldwide assets.

Domicile in France is a whole different ball game. If you are resident in France then usually you are domiciled in France and will be subject to all taxes in France.

This has been discussed before on here and I will try to find the link.

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Domicile is a word that has a different meaning when used in normal speech than when used in a specific HMRC tax context. Think of all the fuss over the rich and wealthy non-doms, who lived in the UK and paid no tax because they were not domiciled in the UK. There is also a grey zone where the beliefs of the UK and French tax authorities may not be in total agreement, so sometimes both countries can consider you are tax resident and then they have to argue it out and decide.

Anyway, for people that are puzzling over pensions here is the list of the pensions considered to be public service pensions and which are taxed in UK

https://www.gov.uk/hmrc-internal-manuals/international-manual/intm343040

It’s a little more complicated than that in terms of claiming the UK personal allowance. The explanation in the link below is succinct and explains it better than I could. Hope this helps.

https://comanandco.co.uk/personal-allowance-for-non-residents

Here is a previous discussion about domicile. You need to start reading at about post number 17. As you will see, confusion reigned over the difference between the UK definition of domicile and the French definition.

It’s a great read for insomniacs!

Mr Lee
Do you expect the tone of your comments to encouraged other subscribers?
Did you read the link I cited?
I might be wrong, and as the link describes there have been recent
changes, but I am in receipt of a UK government pension from years in
the Inland Revenue.
Domicile and residence is complicated - enables accountants and lawyers
to charge their fees. Part of the confusion may lie in the distinction
between the every day use of a word and it’s legal use as defined in
legislation. I have not researched the distinction between tax
residence and legal residence. But domicile and tax are two separate
states. In a time window an individual can be domiciled in one country
but not a tax resident of that country. I put my hand up to the crime
of simplification, residence case law was not my area of expertise. BUT,
how many subscribers are aware of the distinction between domicile and
residence as it applies in the UK? Identifying the two separate states
enables interested parties to investigate further and formulate relevant
questions to assist them understand their own status, and through that
understanding manage their circumstances.
My point is that there is generally much mis-information. I would
welcome hard data behind the Brexit debate and demonstration of how that
data works through the economic models. Politicians can’t / won’t
provide hard data, their focus is on the next election. The media are
interested in selling themselves and not informing the debate.
I hope that no subscriber would pontificate on the status of other
subscribers without more detailed information - rarely given in a
subscription. It was someting I learnt in the Inland Revenue. A tax
return is a snapshot, only through communication could the tax official
have a clearer picture of the taxpayer’s financial state, and apply the
Taxes Management Acts and Finance Acts in a legal, consistent, equitable
manner to calculate tax liability.
But I also expect subscribers to treat each other with respect, not to
make personal judgements based on little information, but as recent
“silly season” press demonstrates sadly that does not always happen.

I intended to add this link “https://www.taxguideforstudents.org.uk/types-of-student/international-students/residence-and-domicile/what-is-domicile” Other subscribers in this topic have already got there.

Then I would expect you to know what the situation is about taxing UK Govt pensions but your argument seems to have a flaw.
I think you might be out of date/misinformed about the tax treatment of UK Govt pensions and that can be seriously misleading to someone living in France.
and my name is Lees…

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