I hope Angela (to whom you replied) will forgive me if I briefly answer your questions..
Correct
No, you can keep the funds wherever you like. Just in case you’re not aware, please bear in mind that unless you have an S1 form or private medical coverage, you will also be liable for social charges (prélèvements sociaux - crude estimate of c9%) on any pension lump sum.
Exactly that.
Thank you for the information. I am aware of the situation regarding the S1 and payment of the social charges if not yet in possession of it but really appreciate you mentioning it and hoping the information will help others.
I am pleased to hear you can have lump sum transferred into a uk account and still benefit from the 7.5% rate. What was causing me concern was this wording from a taxation company
“Once the funds arrive in France, the 7.5% tax ruling may apply if the following criteria are met”
I meet the criteria but does this mean you have to transfer money over as the lump sum from a uk account almost instantly, hence my question about payment going direct into a french bank account.
Thanks for any information concerning this and what others have successfully done.
I mentioned in the post above that you can keep the lump sum proceeds wherever you like. As a French tax resident you are obligated to report your worldwide income, irrespective of its source location, including pension lump sums.The answer to your question is therefore ‘no’,
Thanks for further clarification. Appreciate it.
Just found out my pension is a Personal Pension Plan (PPP) and not a SIPP. Naivety on my part but at least I haven’t jumped in and made a big mistake before investigation further.
My question being, is it definitely only SIPP pensions that qualify for the 7.5% rate on a lump sum. If this is the case my pension provider advised me to call Pension Wise to see if there was any possibility of transferring pension into a SIPP if I am not a uk resident but I am not hopeful since Brexit.
Have a nice day
Hopefully George knows the answer to the tax question.
I looked at Hargreave Landsdown’s website (other SIPP providers are available) and it says if you’re abroad, to contact them about possibly transferring to a SIPP. OH and I have both used them and have found them easy to deal with.
The French tax authorities don’t particularly care what flavour of foreign pension scheme you have. For a PPP, they would want you to have obtained UK tax relief on the contributions on the way in, and (in substance) want you to take out 100% in a lump sum (I’m simplifying obviously) to qualify for the 7.5% rate.The UK now broadly allows you to take 100% out of defined contribution pension plans, so I don’t see a particular problem for you….
Hope this helps..
The clue is in the name - ‘A Self-Invested Personal Pension (SIPP) is a type of pension that lets you choose your own investments and from a much wider range than other pensions.’ (from Hargreaves’s Landsdown). So a Sipp is just a different flavour of pension - all UK personal pensions registered with HMRC and eligible for tax relief qualify for France’s generous lump sum tax treatment.
Many thanks for your reply. When I read any information concerning this subject it always says to meet the criteria for the lump sum tax of 7.5% it must be a SIPP hence my concern.
After reading your email I now have another question. I have never made any contributions to this pension. I opted out of SERPS when it was ‘the thing to do’ and done this through Standard Life whereby minimum contributions were paid in by the government, I believe from my NI contributions. I then opted back in when ‘it was the thing to do’ in 1997 and the money just sat there for years, albeit not a vast amount.
I then transferred this personal pension plan to Forester Life personal pension plan in 2017 and again have never made any contributions, but the growth was much better.
Therefore how will i show this. For a PPP, they would want you to have obtained UK tax relief on the contributions on the way in
Many thanks for your help
Many thanks for this information, should we need it. Greatly appreciated
Have a nice day
I doubt this is a problem in principle.
The Impôts accept that tax deductible contributions need not be made by an employee - their guidance notes that employers can contribute on a non taxable basis for the employee. I guess the fact that the UK government contributed to your scheme, whilst probably unusual from a French point of view, shouldn’t cause any particular concerns. I attach below the closest guidance that is relevant.The main issue for you is presumably documenting it.
Can you access scheme documentation, payslips, employer comms, to show how your NI contributions were redirected to your contracted out scheme? I’d suggest finding the UK government statements on contracting out and translating them, ideally with nice official looking logos on the papers.
I think the best course of action for you is to seek a rescrit or advance ruling from the Impôts, once you’ve assembled suitable evidence. You won’t want to take the lump sum and then find the Impôts reject the claim - that could be expensive! You can make a rescrit via your espace particulier on the Impôts site. If you search on this forum you will find threads that describe similar rescrits, some even from me!
I hope this helps.
Here is the link to the definitive guidance and the key extract below for convenience.
Many thanks for all the information. I don’t have any documentation regarding this. However I could try contacting Standard Life to see if they have any records and speak to pension wise. Will definitely look at link with info you have provided and also contact impots before doing anything.
Really appreciate all your help today.
Try this …there is a UK government printed guide available via this link which you could translate for example:-
Contracted out of the Additional State Pension: What contracting out was - GOV.UK?
Many thanks. You are spoiling me
