Hi, I’m new to this site and I hope somebody can help me.
I live permanently in France (8 years now) and plan to take a full pension lump sum from the UK (around €200k) when I turn 55 next year. Standard Life have told me that, as an overseas customer, my only option is a total withdrawal (no partials, no drawdown). They also said they have to process it in two parts (25% tax-free, 75% taxable under the UK’s emergency code). This is despite the fact that I have recently applied for the NT tax code, having managed to get the DT-Individual form stamped by my local French tax office – which I realise is an achievement in itself! However, Standard Life have confirmed that even if HMRC issue the NT code before I request the full payment, they will not apply it. Apparently their procedure is to use the emergency code and leave me to reclaim afterwards, which seems unfair, but at least I know I can get it back.
My main concern is French tax. I plan to use the 7.5% Prélèvement Forfaitaire Unique on pension lump sums when I declare my 2027 taxes. But since Standard Life will be paying in two transactions, I just want to be sure the French tax office will still regard this as one single lump sum withdrawal. Has anyone here applied for a rescrit fiscal to get confirmation from the French tax office that the PFU will apply in their particular situation? If so, how long did it take, and what paperwork did you need to provide?
Part of me doesn’t want to open a can of worms by going to tax office asking for this in advance , but equally I’d feel more secure with something in writing from the tax office as obviously being taxed at full rate would be closer to 45% which I’m obviously trying to avoid.
Since I do have it in writing from Standard Life that my only option is a total lump sum withdrawal, I guess that in itself should prove to tax office it’s one single encashment should they need proof. But I am nervous about the fact that SL have said they’ll split the payment into two parts (maybe transferred on different days) and whether the French tax office will look too closely at that. If anyone has been through this, I’d really appreciate hearing how it worked out in practice.
Welcome. I will try to reply (in greater detail) later on as I am travelling. Here is my rescrit thread, albeit in different circumstances ie taking 2 lump sums, one when UK resident, one when French resident. My pension is with Standard Life and I ‘recognise’ their approach…
As @George1 (above) has indicated, there is quite a lot of collective experience here on this subject. I was (and still am to some extent) in the same situation as you just over a year ago, Everything George has told me about it has been completely correct.
What I would, however warn you about is that HMRC seem to do everything possible to hang onto the tax they have received as a result of the pension company’s practices. I am still waiting for my refund although HMRC assures me it should be processed “shortly”
You will probably need to get a second FFI form signed and sent to HMRC (or at least I did). I declared the 25% payment and the rest as one amount as it formed a single withdrawal even if paid in two bits.
HMRC’s excuse for delay the refund even more than normal was that is was a large amount and subject to extra security checks. It was smaller than your so they will very likely use the same reasoning for you.
Thanks so much for your reply, especially as you’re travelling, and for sharing the link to your rescrit experience — that was really detailed and very useful. I’m sorry it didn’t go in your favour in the end, but at least you knew where you stood with the French tax office before making your decision.
If I do go down the rescrit route myself, I realise I’ll need to make it very clear to the French tax office that Standard Life’s split (25% tax-free, 75% taxable) is purely administrative on the UK side, not two separate withdrawals that I’ve requested. I just hope SL would back that up in writing if needed.
Indeed I had hoped they might not have to separate it out at all, and instead just tax me on the full amount under the UK’s emergency code, which would make it neater. But I understand that’s not possible — they have to separate the 25% tax-free portion from the rest.
Thanks so much for your reply — I hadn’t seen it when I first wrote back. It’s been incredibly helpful, and believe me, your advice really does come across as expert to me! I hope you don’t mind me asking a few more questions, but your experience is so reassuring.
Like you, my situation is one genuine lump sum withdrawal, and I was relieved to hear that the French tax office accepted your declaration without any problems, despite the 25/75 split imposed by the UK side. That really reassures me, because it’s exactly what I’ll be facing.
Just so I’m clear: my understanding is you didn’t go down the rescrit route in advance, but instead simply declared the gross amount in your French tax return (form 2042, box 1AT under the prélèvement forfaitaire option). Am I right in assuming the French tax office doesn’t need to see the UK split at all, just the total gross figure, and that the 7.5% rate plus the 9.1% social charges were applied without difficulty?
Did you have to upload or provide any proof to the French tax office — for example, a statement from your pension provider or from HMRC — or was the gross declaration itself sufficient? Out of interest, are you also with Standard Life?
I feel very reassured by your experience, and unless I’ve misunderstood, it means there’s really no need for me to go down the rescrit route after all — which, as I’m sure you can imagine, I’d rather avoid given all the bureaucracy already.
And thanks again for the heads-up about HMRC being slow. Sadly, it doesn’t surprise me, but like you say, I’ll just see it as a kind of forced savings until the refund finally arrives — as long as nothing crazy happens in the meantime!
SL frequently say this. Yet they permit me to take any amount of drawdowns from my pension with them. I am also a French resident. Worth challenging them again on this point?
I suspect this is their internal procedure rather than law. 100% lump sums are entirely possible. If they need to physically separate out the UK 25% tax free element from the non tax free element, so be it, but it could at least be done the same day/next day.
Unfortunately I very much doubt HMRC will issue you prospectively with an NT code (ie in advance of payment). It just isn’t their practice at all which is to wait to see the actual facts (as opposed to what taxpayers say they’ll do) then react accordingly. Angela’s experience above is all too common in terms of repayment timescales, unfortunately, unless multiple tax admin planets all align…
This is key. If you can persuade SL in principle to do the lump sum(s) in parallel on one day/next day, I think there is very good chance you could persuade the Impôts - via a rescrit - that this is in substance a single lump sum transaction, and the form is only undertaken in two entirely for UK admin/procedural reasons (ie due to calculations required of the UK tax free element).
You probably know you can now request a rescrit via your Impôts Espace Particulier. You’ll have seen from my earlier thread the likely timescale for replying. They will want chapter and verse to demonstrate that the contributions made were tax exempt/deductible in the UK, eg with copies of payslips etc/HMRC statements etc. You might also want to translate a piece from say the HMRCs website or SLs site ,explaining it is common to split the tax free from the non tax free elements.
I think you will be fine. If you can wait the 3-6 months for a full response for a rescrit, and between 2-12 months for a UK tax refund, great. The amounts are also happily below the newish thresholds for “exceptional” tax contributions…
Do keep us updated with developments… Best of luck
Is it not possible to move your pension fund from Standard Life to another UK provider who has less stupid policies on withdrawals?
When I signed up with my current UK financial adviser we did a bunch of consolidating of pension funds, and subsequently also moved the entirety of my main pension fund from Scottish Weirdos to a different firm.
Or is that not possible if you are no longer UK resident?
Yes that is exactly what I did but the rescrit route might be more correct, given the sums involved for you. I must say that I’ve never had a problem with the Impots people at all and have declared lump sum pensions at different times for both myself and my partner.
To be on the safe side, I would imagine that George’s advice should take precedence over my experience as he is/was a finacial adviser and I am merely a tax payer!!
I didn’t provide anything, just quoted the amounts but of course they might decide to investigate me, in which case I have the paperwork to hand. The rescrit route would probably? avoid that.
No - that part of my pensions (originally with Legal and General as a Stakeholder pension) was sold on multiple times and ended up with a company no-one ever seems to have heard of (Wayside).
If you think the French tax bureaucracy is bad , try the HMRC helpline on a weekly basis over the period of a year…
Short answer is that it isn’t possible in my experience or that of anyone else I know in recent times . Both I, and my partner, tried to do this over the past couple of years and the answer from every provider was the same - as a non-UK resident you cannot take out a new financial product. It obviously applies to bank accounts but also applies to pension transfers. Even if you already have a pension pot with a company they won’t (again in our experience) accept a transfer in from elsewhere. You can transfer out but not in.
Make sure all your ducks are lin line before you come here, @ChrisMann
Thanks for the info @AngelaR - I was asking more on behalf of the OP than for myself - my Duck Regimentation Regime is making steady progress.
I am keeping two UK bank accounts (one with Nationwide and the other with First Direct) in order to be able to make pension withdrawals easily.
I have two personal pension plans - a smaller one which I will probably use to buy an annuity, and the other I am planning to access via drawdown - despite the temptation of 25% tax free if everything goes to plan I will not need to access that money in the short term and would rather leave it invested for future income.
"Courageous, Minister"as Sir Humphrey might have said.
I totally agree with Angela. If your return containing the lump sum goes through unchallenged, fine. However I think it very unlikely, given a combination of the special nature of the item (lump sums being uncommon from pension schemes in France as I’m sure you know) but also particularly due to the amounts at stake.
It would be very expensive for you in tax costs if they do review and successfully challenge the treatment. There is no going back, ie reversing the transaction, if the amount has already been paid…Whereas if you ask in advance, via a rescrit, the worst that can happen is that they reject it, in which case you are no worse off, you haven’t suffered the tax, and can consider whether other planning routes might be available. If they accept, you can proceed with the transaction without further concerns about the treatment being successfully overturned subsequently.
In your shoes I would definitely seek a rescrit…It is free of charge and freely available for you, - you only have to request it. Far harder to obtain in other jurisdictions, believe me!
Thanks again for your detailed replies. I agree it’s a shame about HMRC only issuing the NT code retrospectively, but at least the paperwork is already in their hands with the French tax stamp, so hopefully that will help smooth the refund when the time comes.
Between yours and Angela’s real-life experiences, I do feel more reassured. Whether I go down the rescrit route or not, I’ll make sure I have everything properly documented, and I’ll definitely keep the forum updated as things progress.
Thanks so much for taking the time to answer my questions — I really do appreciate it. Between your input and George’s, you’ve both helped me tremendously and really reassured me.
I agree that the rescrit route is probably the safest option, and since I have the time, it makes sense to go ahead with it. I’ll start gathering all my payslips and documentation now, as no doubt they’ll want to see everything.
Once again, thank you — it’s been really helpful. I’ll definitely keep the forum posted, and hopefully I’ll be able to report back with a happy outcome from the rescrit.
Thanks for the question. As Angela says, it seems transfers to another UK provider aren’t possible once you’re non-resident, but in any case I wasn’t looking to move it. I’m actually fine with taking the whole pot in one go — my concern is just that Standard Life’s way of splitting it into two transactions doesn’t risk being seen by the French tax office as two withdrawals rather than the one genuine lump sum it actually is.
This is possible, but only when working with an Adviser, as most UK pension providers do not accept new business from non-UK residents. For clients that don’t want to take a pension as one lump sum or are unable to, I move them if they are restricted with drawdown access to another UK SIPP that has permissions to deal with french tax residents.
Just to note for those in the UK with pension funds held that could be inherited by others when you depart, from 6th April 2027 pension funds basically become part of your estate for UK Inheritance Tax (IHT).
Currently pension funds are outside of your estate for UK IHT but this changes on that date.
Also I gather pensions taken befor the official UK retirement age - remembering that that age is set to keep increasing currently - are also in the process of becoming more taxable.
Those of us who are now non-resident might currently eventually after much wait and chasing get any automatically deducted tax back, but the direction of UK gov travel is clear. I wouldn’t put it past them to impose other things like minimums and caps or even a withholding tax (that you don’t get back) against certain categories of transaction eg funds withdrawal, where there is an overseas element, in future years.
