I was wondering about this too. Could only find this (from the Guardian) but am not convinced this is what Karen was alluding to:
I would be interested to see the source of that information Karen.
My wife successfully transferred a UK pension whilst a French resident (2018) - a Yorkshire and Clydesdale Bank Pension to a temporary SIPP with A J Bell then to a SSAS, a lot of hoops, we used Tideway for the obligatory pension advice - maybe it’s now not possible after Brexit!
Exactly! That is indeed the problem. If only we’d done the transfers earlier but you know what they say about hindsight…
ISTR Tideway handed back their permissions, at least for Defined Benefit schemes, about 4 years ago. Around that time some advice firms did this, it seems, with or without conversations with the regulator.
Not sure if it was just their DB advice permissions they handed back or if Money Purchase / Defined Contribution permissions too.
Yes, more taxable . Because many people have longstanding pension funds they have built up with their planning aimed at retiring ie starting to take funds out at age 55 by drawdown. And often also the 25% lump sum that can be taken once the age of 55 has been reached.
In the past few days I read something like 20% of 55 year olds with a pension plan, took out their 25% lump sum in the past year.
So lots of people have this plan.
Unfortunately that age 55 is based on the UK’s NMPA (Normal Minimum Retirement Age). Not only do unused pension funds become subject to IHT (I think at 40% if caught by IHT in full) as pensions are part of your estate, as from 6th April 2027, but also…
NMPA becomes 57 from 6th April 2028.
Currently if you withdraw from your pension before age 55 HMRC will make an Unauthorised Payment Charge. Last time I looked this was a tax take of 55%.
The change in NMPA means that anyone under 57, not anymore 55, who withdraws from their pension from 6th April 2028 onwards, will be charged the Unauthorised Payment Charge. So will lose over half to HMRC. Permanently. This is not reclaimable.
There are 2 exceptions - a few ‘protected’ schemes and a few protected first responder type occupations.
And a temporary window for anyone born 6/4/71 - 5/4/73 has until 5/4/2028 when they may still withdraw from their pension if they’ve reached 55.
After that everyone will have to work longer (and pay more tax 
) if they haven’t got a better idea, till they turn 57. And that age will only increase in future years, grabbing more tax each time.
I’ll PM you both 2 articles as I think they are copyright but I think you both have access to the sources. They are both affiliated to the FT.
There was more talk in the publications around making pensions taxable at a younger age in March, as well as bringing pensions into IHT and I’m amazed how quickly this has actually happened. Unlike stuff that got discussed theoretically around March in earlier years. So the direction of travel is clear and we can expect more tightening / money grabs I think.
EDIT PM’s sent.
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Thanks Karen, very useful information and articles. Much appreciated
Under the UK/France double IHT treaty, my assumption is that long term French residents who pass away with UK DC pension schemes in their estate will firstly be subject to IHT in the UK (subject to availability of nil rate bands, spouse transfers etc etc,) and then taxable by France, with the latter giving credit for UK IHT tax paid, to prevent double tax.
Not possible tp get an NT code via a France Individu form for a UK-held DC schrme whilst resident in France then? I tjought it was only property-based investments and certain UK government pensions the UK could tax first before France then got to take account of what tax was taken in UK on it
Though I’m not sure if you’d want to submit a France Individiu form for this or not. If you had the choice. If the UK nil rate band could be relied on not to be taken away from non-residents, then perhaps not.
I think I’m gerting very confused by all this.
What I’m referring to is the tax treatment of the actual DC fund when its French resident holder dies, particularly relevant when the UK changes its treatment of pension schemes on death from 6.4.27. The fund is an asset, subject to IHT (after any available exemptions) and then French IHT (with credit for UK IHT paid).
You’re referring to the tax treatment of income (ie the actual pension) from that fund, eg during the lifetime of the holder. Form France individual is indeed the appropriate mechanism to ensure that private sector pensions and some government-type pensions are only taxable in France and not the UK. NT codes can then usually be obtained against future pension income. They are not needed for IHT purposes.
Hope this helps.
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Hi, new to this site as well, but reading with interest as my wife and I are also hoping to withdraw our DC schemes at the 7.5% rate.
I’ll share our experience to date in case it’s helpful. My concern was just to ensure that the local tax office would accept the 7.5% treatment before withdrawing the pensions. The funds are quite significant now, mine nudging just over €500k (my wife’s a fair bit less) so obviously keen to get the right treatment.
Local tax guy was very friendly but initially assured me the 7.5% treatment couldn’t apply to foreign-sourced pensions. Happily I had brought the relevant legislation and he read this and admitted he’d never seen it before and it would take a long time to get a decision – slight setback but I appreciated his honesty. Then he picked up the phone, had a chat and told me with a big smile, yes, it would be acceptable!
The only issue was that we needed to provide payslips showing the contributions were tax deductible. This was the only evidence he said they would accept. Which wasn’t ideal as the last contribution was 20 years ago now and although I have all the scheme documents and annual contribution statements, we only have a handful of actual payslips from that time. Anyway, we have booked a return meeting for later this week to show him all the evidence we have and hopefully he will be persuaded. In that case, we will seek to get some written confirmation from him that those pots are acceptable. If he will give that I would probably proceed, and rely on that rather than a rescrit.
Clearly there are other issues to be considered too as I’ve read about the CEHR and Contribution Differentielle. So staggering our withdrawals over two years may make sense. Then again – I have a sense that, the way the political winds are blowing, the sooner these are cashed in the better!
One other, completely unexpected, point that emerged was when I mentioned we would pay 9.1% social charges, he said that would depend on our RFR from two years previously. And in fact, those revenues were fairly low as they just consisted of gite income. So the social charges on the capital sum may be much lower than 9.1%, or even exonerated, which would represent a large saving. Of course, in the year that the capital is withdrawn the RFR will shoot up very high. So timing is important if we want to stagger withdrawals over more than one year.
Hope this helps
Welcome Dom65 to SF. Very interesting to read of your experiences with the Impôts.
Some brief comments. You’ll probably have seen references earlier in this thread to rescrit. In my limited experience, one advantage for going down that route is that you will be dealing with experienced lawyers who generally better understand the international tax issues, and are probably more open and flexible than regular local tax office types. For example, insisting on payslips only, by way of proof, reflects a fairly narrow, rigid approach, whereas translations of appropriate scheme documentation, general HMRC statements about the tax treatment of DC plans etc were more than acceptable to the lawyers when I asked similar questions in my rescrit.
Personally , given the sum’s involved, I would want a rescrit, but if you’re happy with something in writing from your tax office, if that’s forthcoming, I can understand the attraction. A more formal rescrit can admittedly sometimes take 3-5 months to conclude. It would also be useful to have written confirmation about the social charges treatment in advance either way. I take it you’re not privately insured for medical coverage or have an S1, since either approach should avoid social charges. There are some interesting recent posts about CEHR and the CD on this forum if you use the search functionality, (see the magnifying glass icon) including reference to an ability to mitigate the impact of exceptional sums
Final point. I assume when you talk about staggering your withdrawals you’re referring to taking 100% lump sums from (say) your plan in year 1, your wife’s in year 2 (or vice versa) rather than splitting your withdrawals from the same plan over successive years? Clearly the latter approach wouldn’t give you the 7.5% treatment.
Best of luck with your Impôts meeting. Do update us if you have the time, it’s always interesting to share these experiences and thanks for your post.
Thanks for your prompt response George1. All very good points.
Certainly, you make a good case for requesting a rescrit. I think we will see how Thursday’s meeting goes and maybe even discuss the rescrit option with them. I feel we are in a good situation in the sense that the SIP have accepted the treatment in principle, we just need to prove our scheme is what we say it is. We have enough payslips from that period to demonstrate an audit trail back to the pension statements. If not accepted, then I would definitely escalate to a rescrit or even using a lawyer to make the case.
I feel we are on good ground though as there is even an annexe BOI-ANNX-000435 which officially lists UK Occupational Schemes as being tax deductible ones and so acceptable for this treatment. Which, incidentally, gives me comfort that aspects like the 25%/75% payment the OP mentioned is acceptable as it is simply a feature of the administration of those schemes.
I’ll admit my judgement is slightly clouded by the fact that we have made plans that involve using some retirement funds in the near future and don’t want delays 
.
To your other points, we have a small business here and so are definitely in the French system and cannot avoid social charges via S1 or private coverage. The rules on the social charges on foreign income are very clearly set out and we would need to indicate the rate in Section 9 of Form 2047. The thresholds are here if it is helpful for anybody: https://www.impots.gouv.fr/sites/default/files/formulaires/2041-gg/2025/2041-gg_5151.pdf
I believe our RFR actually gives exoneration and therefore no box to tick, so would explain that in the comments on the declaration.
The CEHR and CD links were very useful, thanks. It seems the CD is not an issue for ‘exceptional’ withdrawals, though good to be aware of. The CEHR is mostly avoidable for us by, yes, taking 100% of my scheme one year and my wife’s the following year (this also slightly mitigates the worst case scenario of it not being treated as 7.5%, as the income would be spread over 2 years).
It seems post Brexit there are very few ways to access these DC pensions at all as a non-resident, so I am keen to act quickly whilst this option is available. But I still learn something new about French taxes every time I switch on the computer, so sharing these experiences and being aware of the nuances is very helpful!
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Hi Dom65,
Thanks for your post, and thanks also to George and Angela for their earlier input. This forum really is invaluable - sharing experiences from different angles makes such a difference.
Your reference to the BOI annex has especially reassured me. I am always anxious about the 25% / 75% split payment by SL , but I feel this makes it clear this is simply an administrative feature of the scheme, and doesn’t stop the payment being treated as a qualifying lump sum by French tax authorities. That’s a big relief.
I also managed to get the following in writing from my local tax office via email (from a Contrôleur des Finances Publiques, a very helpful lady who also helped organise my DT form being stamped earlier this month)
« En ce qui concerne la pension qui vous sera versée sous forme de capital, l’option pour l’imposition au taux forfaitaire à 7,5 % est possible lorsque les conditions suivantes sont remplies :
– le versement du capital n’est pas fractionné ;
– les cotisations versées pendant la phase de constitution des droits étaient afférentes à un revenu exonéré dans l’état auquel était attribué le droit de l’imposer. »
Whilst I realise this isn’t legally binding it dues reassure me that I meet these 2 conditions, since I will be making one withdrawal request for the full amount, and the contributions were made from my UK employment income, shown on my payslips, where the pension contributions were listed separately and not taxed. These were never taxable in France, which leaves France with the taxing rights at the point of withdrawal under the UK–France treaty.
Where I hesitate is with the rescrit. Since it is legally binding, and asking for it now would be before the withdrawal has actually taken place. At the moment, all I could present are payslips and statements, but not the final withdrawal request, the actual Standard Life payment confirmations, or HMRC documents. I worry that with limited paperwork in advance, they could decline it “to be safe.” By contrast, if I go down the normal declaration route, the withdrawal will have happened, and I would have stronger documentation to support my case if ever questioned. In that scenario, at least there would be some back-and-forth with the local tax office rather than being locked into a negative ruling.
Plus I always intended to withdraw the pot in one go as soon as I hit 55 as in my view the risk of leaving it invested under ever-changing rules seems greater than the risk of a fiscal challenge in France, I just hope my case is viewed as straightforward and well supported should it be flagged by tax authorities after the declaration.
I will be very interested to hear how your meeting goes later this week. Wishing you and your wife well with it, and thank you again for sharing your experience.
@Dom65 I will be very interested to hear how this progresses.
And I agree with you about anyone looking hard at any actions they might want to take on any UK held pension, as soon as they hit 55. Which for most people is going to become no earlier than age 57, and not any longer 55, from 6th April 2027.
Hi, thanks for sharing that BOI, as you say we seem to discover something almost every day!
For the high income charge, remember the limit is 500k euro’s as you are married, so if you are unlucky and don’t have that pension amount plus normal income you won’t even be in the high charge zone and the exceptional income check won’t even arise.
If you are lucky, for the exceptional income, remember the +500 K this year will increase your moving 3 year average income level for the following year.
Thanks all, I will keep you posted.
Larkswood12, you make an interesting point on the 3-year averages.
Having had a quick read of the Deloitte’s from the other thread on CDHR, it seems exceptional revenue here is defined both by nature (it is a one-off) and amount (income being>average of last 3 years). It also refers to it being considered exceptional in the sense of the quotient system (Art 163-0 A of CGI).
The Art 163-0 A text in turn suggests that capital withdrawals from PERPs etc are exceptional regardless of amount, though they do only refer to these as pensions of faible montant.
So, bit of a grey area. However, that may influence our sequencing, to be on the safe side. If my pension fund is, say, triple the size of my wife’s fund, then it makes sense to withdraw hers in the first year and mine in the second year. Otherwise, our moving average will move up to nearer 200k and her pension will not necessarily be more than that and so might not be consider ‘exceptional’.
Then again, I suppose if we cashed hers afterwards, we wouldn’t reach the threshold for CDHR in that second year.
So many balls to juggle. As others have said, I certainly don’t mind paying my fair share of tax, but don’t want our retirement fund to be taxed as though it were an annual salary!
Wearing my old tax adviser hat, I would have encouraged clients to face the tax authorities at the point they had the strongest possible case..I would therefore agree that in your case, if the best, strongest case that can be put forward is after the withdrawal, accompanied by robust paperwork to support your case, then go for the normal declaration route. This presupposes that the tax free and non tax free amounts are made as near simultaneously as possible, from an optics point of view. Hope for the best and prepare for the worst is the general approach! Best of luck.
A general warning to those taking substantial lump sums, and who are married/civil partnership (PACs)..Be very, very careful to ensure that you do not unwittingly create a major French tax liability (droits de donation) by transferring amounts from the spouse with the pension proceeds to the other, unless the quantum is less than €80,724. For example, A passes pension proceeds to B so that B can invest in an assurance vie or property.
Amounts above €80724 will trigger French tax exposure of approximately 20%..Lifetime transfers between spouses are - unusually - taxable in France, unlike (probably) many other countries including the UK. It is probably only a matter of time before somebody, having successfully achieved the 7.5% tax charge on a pension lump sum, unintentionally falls straight into this droits de donation tax trap.
That’s interesting @George1 . I take it that the sum you quote is cumulative and not just for a single donation. Not that, in fact, it’s ever likely to affect us but definitely worth knowing.