I think so. In your example you have to pay tax on the French income because you have UK income which is counted first and therefore takes up your tax free allowance. If I apply that theory to my fictitious example I actually get a tax liability of 5,550€ which is even worse than the amount I calculated.
It doesn’t seem equitable to me but when was tax ever fair!!!
If you used the 20000 in your example you’d save even more because of the social charges that aren’t payable. So work it out if the rental income was French rather than UK. You get £11000 tax free from the UK but if it was French rental income you’d be paying the relevant tax on all income above the allowance (not just the business income) but also 17.2% social charges on all of the rental income, no allowance given for that.
Also, remember that tax is per household here so you divide the income by the number of tax parts before applying the tax rates. I’ve heard lots of people say they pay less tax here because of this. At one time my household was 5 tax parts. It’s now 3.5.
So using your example of 20000 taxable French income, and 24000 French rental income, 44000 - 6000 relief on the rental income gives 38000 which is then divided by my tax parts of 3.5 giving 10857 per part. 9807 is zero rated, leaving 1050 to tax at the rate of 14% = 147. Times that by the number of tax parts to give a total French tax bill of 514.50 (for a family consisting of one adult and three children). The social charges at 17.2% of the 18000 taxable rental income = 3096. 3096 + 514.50 = 3610.50 altogether.
It’s the social charges that are the killer and you don’t have to pay those on UK rental income.
Wow that’s really interesting. Thank you so much for your patience. I get it now.
I imagine anyone else reading this thread will be really bored but it’s fascinating for me!!
I’ll leave you alone now 
Thanks again and enjoy the rest of your evening.
If it’s UK rental income then I’ve already used 5143 of my 9807 tax allowance per part, leaving 4664 per part, so 20000 French taxable income/3.5 =5714 - 4664 = 1050 x 14% = 147 x 3.5 = 514.50 - another way to look at it. So the French tax bill is the same either way in my case with 3.5 parts but I save the social charges of 3096 if it’s UK rental income. When I had 5 parts I would still have had 6207 tax allowance left per part so I wouldn’t have paid any French tax. (Couple with 4 children).
However, if I had the same income all as UK rental income and no French taxable income then I’d pay no tax or social charges in France on 44000 income - but if I didn’t have an S1 it would cost me 1679€ in PUMa cotisations. (Never had to pay those so not sure if it would be less than that - do the tax parts affect those too or would I pay more because two of my 3 kids who are still attached to me fiscally don’t have their own cover, one a minor and one over 18? Hmm. Will have to check that one out! ),
Is there anyone ‘expert’ on this subject and up to date with the ‘knowledge’?
We have just received our latest APPEL for 2022 and it is increased from previous years. Also my wife has the bigger bill than me.
I have a few questions if anyone is prepared to help…advise.
We used to dread December and the arrival of the increased estimated charges for the year to come. Most of the time it was absolutely ridiculous, more than OH could physically earn so the accountant would take it in hand and deal with URSSAF for us, usually getting it down a fair bit too. I suggest you arrange a meeting with them and sort it face to face, always the best way.
Is anyone still available to answer some questions relating to CPAM and cancelling registration as an Auto Entrprenuer? I want to try understand the full situation of how I and my family will now be effected re: Carte Vitale etc.
I would prefer to get the heads up before opening the ‘can of worms’ with CPAM or whoever might be able to shed some light.
Do I/we still have liabilities, can we avoid or reduce them?
i
Not quite understanding the question. You will be continuing to live in France but without the access to healthcare provided by being an AE and paying cotisations?
Is that the situation ?
And you want to continue to be part of the public health system rather than opting for private health insurance?
Options are get a job or pay cotisation subsidiaire maladie (CSM). For CSM the cost will depend on your overall income.
Are the liabilities you refer to related to closing your AE? Or something else?
Hello Jane
Brief situation - We came to France in 2016. To get into the health system, Carte Vitale and residency etc. we registered as AE’s with gite attached to the house.
This was allowed and we got into the system. Last year I reached the age of 66 and understood that I did not need to be an AE any more.
I assumed that as we were now in the CPAM system this would continue although I am not sure how it now relates exactly to future charges.
Before we were liable to submitting quarterly returns on the gite business and charged accordingly on the income.
At the end of the year both my wife and I received a tax bill and for some reason my wife had a significantly higher amount to pay than me.
We do not even fully understand this.
Can we fully opt out of CPAM and if so what would the consequences be?
My main concern is that we get a monthly payment towards caring for our disabled daughter… would this still continue? Who is responsible for this payment to us?
Not speaking the language (me) and not having a deep understanding of the bureaucracy does not help either.
Any advice besides seeking expert help would be useful.
Greg
My CPAM has an English speaking department. Perhaps worth checking whether yours does too.
I am specifically interested if it is easy or viable to just dump CPAM and exist in France outside of its clutches. Using a UK S1 card should give full medical coverage. so why bother with CPAM. Would there be a reduction in tax demands by doing this? Would any social benefits still be paid by the French towards disabilities etc.?
what makes you say this ?? do you have a link…
Using an S1 does not give you full medical coverage, it only gives you the same cover as a French person once REGISTERED with CPAM who claims the money from the UK. You can’t, for example, go into a pharmacy and show your S1 as payment for any drugs.
Having the S1 then means you no longer pay cotisations sociale on your pension if you tick the right box on your tax return.
If you close your AE you can of course continue to be covered by the French Health Service as any other resident in France can, and your CV will be updated to show this. However if you don’t have a UK state pension then you can’t get an S1 so will pay the annual cotisation subsidiaire maladie. Which unless you are very rich is usually no more than a modest amount
However there is another big spanner in the works as you have been working in France. So if you have been paying cotisations for 7/8 years then the UK is no longer your competent state for healthcare and you will not be able to get an S1.
Side discussion….when we came to France and looked into the healthcare many people at that time said to open an AE and run a gîte as you only needed to turnover a tiny amount, and pay the minimal cotisations in order to get health-cover. However we quickly realised that this would then loose our eligibility for an S1. So we paid what is now the cotisation subsidiaire instead. Yours was a very common approach pre-Brexit before they set a minimum turnover in order to qualify for health-cover.
This is what I was told when I spoke to the UK person who dealt with my enquiry.
Otherwise what is the purpose of the the UK S1 form.
This document will allow you to register with the health insurance fund in your place of residence in France. Form S1 will remain valid for as long as you reside in France and will allow you to receive care under the same conditions as if you were insured under the French social security system.
The part I need to clarify is whether this means that there are no additional charges to be paid to CPAM but as I understand it, by using the S1 a person should not be required to pay any extras…
This seems to be the important part ----
Retired expatriates from within the EEA who are covered for health insurance through their S1 are not part of PUMa, as they are covered directly by their home country, with administration of their cover carried out by the local health authority (CPAM). They pay no PUMa charge.
I need to check that thisi covers my dependants too and I will be happier.
Since 1st January 2016 France has had in place a universal system of healthcare, called the Protection Universelle Maladie (PUMA).
In practice, there has been a universal system in place since 2000, but it has not been unified, requiring that households needed to change their insurance regime upon a major change in family or employment circumstances. This could result in a temporary loss of health cover.
So the reform has been really more about ensuring continuity of health cover.
As the Minister of Health, Marisol Touraine, stated at the time: "Il ne s’agit pas de créer un nouveau droit mais de garantir les droits existants. Nous voulons faciliter la vie de millions de Français qui doivent engager d’importantes démarches administratives alors que ces droits leurs sont acquis."
The Couverture Universelle Maladie (CMU), which formerly protected those not covered through employment/business-based schemes, was abolished with the introduction of PUMa.
PUMa grants an automatic and continuous right to health care in France to those who are legally resident in the country, and without the need for any administrative formalities upon a change in circumstances.
The determination of your charge for affiliation to PUMa, called the Cotisation Subsidaire Maladie (CSM) is simply extracted from your income tax return, although as we show in subsequent pages, few households actually pay the charge, due to the exemptions that apply.
The former CMU-Complémentaire, for those on a low income who pay no charge remains in place, although it is now called the Complémentaire Santé Solidaire (CSS).
As far as expatriates are concerned, access to the system for early retirees is complex, as you can read at Health Insurance for Early Retirees in France.
Retired expatriates from within the EEA who are covered for health insurance through their S1 are not part of PUMa, as they are covered directly by their home country, with administration of their cover carried out by the local health authority (CPAM). They pay no PUMa charge.
The same applies to those on long-term disability benefits from their home country and cross-border workers, if they hold an S1 certificate.
If you are not from within the EEA then to apply for PUMa you will need to demonstrate you have a right to live in France through a residence permit (carte de séjour).
Entitlement to access has historically depended on legal residence of at least three months duration, although ostensibly a five-year residency rule remains in place for EEA early retirees.
As the regulations state: ‘La Puma ne modifie pas les dispositions règlementaires existantes applicable aux migrants qu’ils soient permanents ou du passage pour UE/EEE ou Suisse ou non-EEA.’
The PUMa changes include an alteration to the basis by upon which individuals are registered in the health system.
Hitherto, spouses and other family members had been attached to the insurance regime of their partner as a ‘dependent’ in order to obtain their health cover.
This system of ‘ayant droits’ has been abolished by PUMA, so that all eligible persons have been granted an individual right to healthcare, which they will maintain for their lifetime.
This significantly improves the status and rights of economically inactive spouses/civil partners.
Nevertheless, this change does mean that the economically inactive spouse of a business owner or salaried person in France does now have to make their own application for health care, rather than as a dependant of their partner, an issue we considered in our Newsletter article Access to Health Care for EEA Residents.
Dependant family members of those with a S1 certificate of exemption have not lost their S1 attachment rights, and neither will they lose them in the future.
This is because the new law specifically excludes from PUMA those in receipt of a foreign pension who obtain their health insurance cover from their own home country.
Article 160-6 of the Code de la sécurité sociale states that among those excluded are:
“Les personnes titulaires d’une pension étrangère qui ne bénéficient pas par ailleurs d’un avantage viager d’un régime obligatoire de sécurité sociale français lorsque, en application d’un règlement européen ou d’un accord international, la prise en charge de leurs frais de santé ainsi que de ceux des membres de leur famille qui résident avec elles relève du régime étranger qui sert la pension.”
This clause is merely a legal technicality, so that S1 households do not pay a charge to the French health system. They are also exempt from social charges on their pension.
Accordingly, those who hold an S1 certificate of exemption will only nominally be affiliated to PUMA (for the purposes of administration), as European Regulations grant them and their family members entitlement to health cover via the certificate.
In relation to an enquiry concerning UK expatriates in particular, the French social security authority advised us that: ‘La cotisation PUMa ne s’applique pas aux personnes bénéficiant exclusivement d’une pension de retraite britannique, résidant en France et n’y exerçant en parallèle aucune activité professionnelle, à condition que celles-ci puissent justifier par la fourniture du formulaire S1 qu’ils relèvent du régime’.
In the case of existing dependants not covered by an S1, the law states that there will be no change to their arrangements, whose current status is protected until 2020, when they will have cover in their own right.
Dependant adult family members can, if they wish, become registered before this date, but there is no obligation to do so.
You’ve fundamentally misunderstood (or been misinformed about) how the S1 works. You have to lodge it with CPAM to authorise equivalent health care as a French person but anything that a French person would be reimbursed is charged back to the UK (typically 70% of the cost). You’re still liable for any balance to be paid and would be wise hey a mutuelle in place.
Without doing that, it’s just a sheet of paper that you can’t do anything with.
Article 160-6 of the Code de la sécurité sociale states that among those excluded are:
“Les personnes titulaires d’une pension étrangère qui ne bénéficient pas par ailleurs d’un avantage viager d’un régime obligatoire de sécurité sociale français lorsque, en application d’un règlement européen ou d’un accord international, la prise en charge de leurs frais de santé ainsi que de ceux des membres de leur famille qui résident avec elles relève du régime étranger qui sert la pension.”
This clause is merely a legal technicality, so that S1 households do not pay a charge to the French health system. They are also exempt from social charges on their pension.
Accordingly, those who hold an S1 certificate of exemption will only nominally be affiliated to PUMA (for the purposes of administration), as European Regulations grant them and their family members entitlement to health cover via the certificate.
As I understand this means that we do not have to pay any PUMA charges. I also realise that we have to keep going with our mutuelle ‘rip-off’ monthly payments. Yes it would have been better to save this money in a special account than pay it to Swiss Life!