Does anyone know if birthday gifts from close family count as income?
I would think it depends on the size of the gift but more certainly if the money is invested, any interest gained most certainly will need to be declared.
This reference might help explain.
Thanks Graham
Les petits cadeaux considérés comme de simples présents d’usage ne sont pas à déclarer. Pour ne pas être considéré comme un don, un cadeau doit être donné pour une occasion particulière (par exemple fêtes religieuses, anniversaire, mariage, …).
Is this a good place to ask about UK SIPPs?
I am currently resident in the UK and moving to France later in the year. I have a UK SIPP, self-employed personal pension plan. comprising various funds administered by myself through A J Bell. How much I take out if any is optional and in the UK I am only taxed on the amounts I withdraw.
The question is how will this be taxed in France? And should I be doing anything before I move?
If this is not the right place where is, please?
This SF affiliate may be a good starting point:
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I think you may need to consider taking the 25% tax free lump sum before you arrive. It is tax free in the UK, but not France.
I tend to agree with the view expressed by @JohnBoy. Generalisations are all well and good but be prepared to accept that the final result may be at odds with what you perceive to be the position after wading your way through the various simulators which can only really be regarded as a guide. Indeed, there are potentially as many answers to the same problem as there are accountants and tax office officials expressing an opinion - you just have to read through this one topic to see evidence of that.
Many here are fortunate in that their French tax affairs are happily simple enough to tackle on one’s own but step outside the “simple” bubble and professional advice is almost certainly a must - if only for peace of mind. As I think John alluded to earlier in the topic, a professional accountant has credibility with his opposite number at the fisc and is better equipped as a result to successfully argue a case.
@rogerspencer …I have a Sipp and had French tax assessment done last year and just now by a guy who offers this service professionally.
I declare income taken as normal pension income…which it is!
I believe though the 25% which is tax free would be taxed here.
Biggest change I’ve had is that my SIPP manager can no longer give any advice as what to invest in or indeed how to structure the pension.
Some of these “advisers” make it eye wateringly expensive and complicated…and are keen to punt Quarops
Maybe you want to message me privately and i can tell you what I have experienced.
Thanks @james
Mr Spencer,
To answer the first part of your query – the withdrawals from your pension is the same in France as it is in the UK. They will be treated as income.
As to whether you should take any action before you move across to French residency is a matter for conjecture but there are good reasons for doing so.
I don’t know how AJ Bell will treat your SIPP if you move to France but I suspect that it can remain in place, the issue is how the tax will be effected. We have all been witnesses to the acrimony between UK and French leaders and whilst a Double Taxation Treaty exists currently it can always be revoked by either side. There is a great deal of financial uncertainty and I would suggest that to have your funds entirely in the UK whilst living in France may be at least cumbersome. The ideal solution would be to effect an offshore solution in the form of a QROPS (Qualifying Recognised Overseas Pension Scheme). This is wholly approved by HMRC and would be in a jurisdiction that has a Double Taxation Treaty with France, thereby rendering the tax treatment of withdrawals wholly practical. The QROPS is essentially similar to a SIPP in that there is a trustee company that reports to HMRC and approves the holdings. The investments can be varied and you can take as much control over the investments as you wish. I am unaware of the costs of the AJ Bell SIPP but the QROPS fees are reasonable. I will be happy to provide you with as much information as you wish on any investment in France.
The general opinion in the financial sector is that the UK will eventually penalise the withdrawal of funds to an overseas destination by a tax penalty. This has already been set in place for pensions in the QROPS sector where any QROPS where the provider or the holder is not in the EEA will attract a 25% tax penalty. This does not apply currently but it will take only the flick of a switch to effect this on transfers to anywhere outside the UK. This was expected to happen at the last budget. Effectively the clock is ticking on this move.
How can I be of further assistance?
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…ah the QROPS suggestion again, when you look at the costs and hurdles it becomes unsustainable.
I investigated them with three different firms last year.
There are other options without QROPS.
In the UK, my charges by an award winning city firm are about 1.3%. The QROPS option was going to cost in the region of 4.5% just to set up and 3.5% a year, and managed in Malta financial jurisdiction.
I know this is venturing off topic so maybe one on such pensions needs establishing for more discussion … but it this important as I would politely venture to suggest this is project fear and sows worry.
I took advice from a financial lawyer on this and was told that if a uk national has a SIPP and draws pension into a uk bank account if it is then transfered into a Euro bank account (say) it is no different and could not be distinguished from any other funds or savings that the individual has.
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Hello all, and @rogerspencer - the topic of pension lump sums was my very first query on Survive France -
I found out a bit more from a PM with another poster who did take the 25% before becoming France taxable - and then the rest at the 7.5% rate in France. However, strictly, if taking a lump sum at 7.5% it should be all taken in one go - in fact the extra tax on the 25% which would have been tax free is approx 2K per 100K of pension so is it really worth taking the risk?
Of course if one is doing drawdown then one wouldn’t take all the funds in one go - but then why wouldn’t one take advantage of the 7.5% tax rate? And sorry if this is a bit of a hijack of the 2020 tax return - but I saw the posts here. Maybe better to add to my original post?
Hi John.
QROPS charges can be reasonable. You can have firms which allow you to select your own shares, ETFs and the only charge an fixed annual trustee fee which depending on the size of the portfolio could be less than a percentage charge. For instance QROPS Providers - STM Group PLC. Their dealing fees are more than a UK broker, even though the dealing team is based in Edinburgh, so you wouldn’t want to be a trader. I think they are part of Interactive Investor group which is a big group like HL or AJBell.
However, you would have to have an UK IFA to do the SIPP to QROPS transfer for you. Most are % based, but you can negotiate fixed fees.
I have had no reason to complain about their service.
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We have just re-discovered an ancient PEP…got a letter forwarded on from old UK address saying that the company name had changed!
Completely forgotten about it, as was £5k we stuck into a PEP way back in last century. I guess that means its now an ISA, or something else.
We have never taken any income from it, and of course will have to pay french tax when we do. In fact we have never done anything with it at all. But do we declare it on 3916? It’s not an account as such…but now with an “online investment platform” whatever that is!
for “online investment platform” read Bitcoin and the like.
PEP discontinued in 1999 and is basically now regarded as an ISA
reference
Thank you for your input Mr. Strudwick, it is encouraging to note that you found the QROPS solution to be of sufficient interest to dedicate time and analysis to it. As to your findings, I am unable to comment. Firstly because I am unaware of the size of your fund and secondly because I am unaware of the solutions offered.
If your fund is modest then 4.5% for setting up is possible I guess but at Spectrum we currently don’t charge a QROPS set up fee and the ongoing providers fees are reasonable and can be negotiated. They are dependant entirely upon your preferences and choices. I am unable to say either if you are comparing like for like. A UK based SIPP fund will attract tax within the fund whereas we deal only with offshore funds where the only tax on the fund is withholding tax. This gives a greater potential for growth as I am sure you are aware.
The advice from your financial lawyer regarding drawing pension from the SIPP is interesting and well-founded I’m sure.
There are many knowledgeable people on this platform and you will certainly find the answers you are looking for.
Should you wish to give the QROPS another chance, I would be more than happy to discuss matters further.
I wish you all the best on your move to France.
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Thanks for the offer John, how do I private message you, please?
Thanks, yes, I have taken the 25% in the UK.