UK Teachers' pension and tax

Banking & Financial Tax & Social charges
1

Hi to everyone on the forum and thanks for your many useful and informative posts which I have discovered here.

I have been living and working in France for a few years now. However, I will soon be retiring with a UK teachers’ pension in the form of a lump sum and a small monthly income, as well as with a French pension.

If you have had experience similar to mine, how did you go about setting things up fiscally?

I read previous posts on the forum about paying the UK income into a Sterling account first, then transfering it to Euros at a later date for the best rate, and using the ECB or BDF average annual exchange rate when declaring the amounts received in France. Do you have any tips to reduce bank fees on the transfer?

Does the lump sum have to be included in its entirety on the next French tax declaration, or can it be spread out over a couple of years’ tax declarations?

As I understand it, the UK teachers’ pension is taxed in the UK under a bilateral accord, but should be declared on one section of the French tax declaration as exempt from tax and on another section counted as foreign income to form part of the overall tax band. Is this correct?

Is it the case that HMRC will not apply tax to UK pensions under £12k p.a. (or to lump sums) if you claim a tax allowance? And how did you actually handle this - all online or by registered post? So far, I have been unable to get the right person at HRMC on the phone.

And will the French tax office do anything apart from bumping up my tax band? I understand there may also be something to pay the Fisc - social contributions or maybe something else too? Would I be right in thinking that S1 relief is really only for UK residents?

All in all, is this doable without an accountant? Does anyone have experience of that and what would you recommend?

I imagine it will sort itself out eventually, but my main concern is the risk of falling foul of the taxman.

Well, all contributions will be welcome, as they say at ‘les Impôts’!

2

Get a Revolut (or Wise) account

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No direct experience myself but I think UK state pensions can be paid into a French bank account in Euros at a decent exchange rate, might be worth asking if the same could be done for your teaching pension?

Ditto the advice about Wise / Revolut - very handy. I use Wise myself. I get a (very) small income from sales of stock photos which comes across in US dollars, so I have that paid into my Wise account too.

You can hold (and convert) lots of different currencies in Wise, as needed.

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Appreciate the tip. Thanks Mark

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Chris, I will definately be doing this, thank you. If anyone else is interested, I think Revolut is offering 30 euros for new accounts via Veepee at the moment.

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Welcome to SF.

Under the UK/France tax treaty. France grants a tax credit equal to French tax (including prélèvements sociaux) - irrespective of any UK PAYE - to avoid all double tax. On French tax return schedules, this is categorised as “Revenus imposables ouvrant droit à un crédit d’impôt égal à l’impôt français.”

You add the information in annexe 2047 section 1(12),section 6

Main return 2042 boxes 1AL/1BL + 8TK

Yes, the inclusion of your UK pension will bump up the French tax rate applicable to your French pension.

There should be no need to use an accountant, it’s a fairly routine declaration.

I will defer to the several people on SF who/whose other halves have such a pension to describe the mechanics of declaring the pension in the UK. You will though definitely qualify for a UK personal allowance if you’re a UK citizen, roughly £12k.

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I would check reviews of Revolut, given their customer service seems to be absent when things go wrong (certainly not the case with Wise), though the “things going wrong” tends to happen when people keep a large balance in their account.

Wise offers a decent rate of interest, too: I presume Revolut does likewise, but that’s another factor to weigh, since you may find yourself occasionally waiting for the exchange rate to rise.

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Thank you for all the info George1. So, there is hope -ouf!

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Good to know Porridge (splendid name by the way), and I’ll definitely check out Wise .

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If you decide to go with Wise, you could get recommended by someone on here, they’ll get a little bonus.

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Aha! Thank you Debby. I’ll do my homework on both banks and get back to see if anyone is interested.

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Here is my referral link if anyone wants it - i think you get a free transfer or a Visa card… not sure what i get, if anything!

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Duly noted Chris. Thanks.

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Having just opened a Wise account solely for transfers, they give a way better rate than the outfit I used previously and the transfer was near instantaneous.

Don’t forget to inform the impôts of the account on your next declaration.

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Hi there, I do have a teachers pension.

George has given a good account of what to do on the tax form.

You do get the UK tax allowance. You will be taxed automatically in the UK on this.

If you have any other income or interest on savings in the UK this will be taxed in France and if you don’t fill in form France- Individual DT, you will be taxed twice on this. As I was.
So fill this form in asap. You fill it in, send to your local French tax office, you can usually email this if not then secure messaging should work.
They sign it to say you pay tax in France, send it back to you, by email usually as a pdf, you the send it by snail mail, registered, to HMRC and they will not tax you on interest etc.

If you are state pension age you should get your S1, this means no social charges will need to be paid.

I have my pension paid into a UK bank account and then transfer to my French acoount when the rate is good, using Wise.
I still have a UK credit card and find using this for almost everything means I can pay the card off from my UK bank account so I don’t incur transfer charges.

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Hi, Trying not to repeat previous posts,but there’s a bit of overlap

i) Re ‘teacher’s pension’:
If it’s with the TPS, it’s classed as a government pension and taxed at source in the UK. Any tax due is taken before the monthly payment into your UK or french bank account. However if it’s any other teachers’ pension, such as the USS (Universities Superannuation Scheme) it will be taxed in France.

ii) Re S1:
As far as I’m aware this is only available to people whose final work before retiring was in the UK. However, if you are not eligible by this route, your spouse might be if their employment history differed from yours, and if that is the case, you might be able to ‘piggyback’ into the scheme on the back of their S1.

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Thanks very much for your advice!

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Yes, you can. I’m not old enough for a S1, but I piggy back on my husbands S1.

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Thank you so much for taking the time to post me this info. I have a couple of follow up questions - do I declare the lump sum with the pension amounts on the form? And would it be the place to declare a small sum from an additional voluntary contribution policy which has yet to be finalised?

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Hi, I really appreciate your advice, so thank you. Yes, I think it’s TPS (secondary ed), and the S1 sounded just too good to be true. So, do you think that the French tax office will apply social contributions ?