Inland Revenue form P85

[Redcap]

Has anyone had experience of completing this form? It is supposed to be completed when leaving the country and to apply for tax refund.  It seems a little on the nosy side to me, I really don't expect any tax rebate so I don't think I'll bother with it.  Is this likely to cause any problems in anyone's opinion?  By the way, I've nothing to hide, I just feel a little rebellious!

Regards,

Bob

[Boiling a frog]

I believe you are an ex police officer so you will continue to be taxed in the UK I was advised just to give the inland revenue my new address no need for form 85 as it is irrellevant in your situation

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Thanks frog, that makes sense!

Regards,

Bob

[Jackie]

If all your income is from a Govt pension then you wont pay income tax in France but you will still have to declare it in France I believe.

 However if you have other sources of income like building society interest in the UK or whatever, then you can get the UK tax paid back and you will be taxed in France if this supplementary income exceeds the threshold set by the French tax authorities.

You need the French tax Avis d'Imposition form for your fiscal number which you need to quote for various other things that you may be taxed on in France. If you ask for a high interest rate tax free account at say the post office they will want to see this form and these accounts are worth having. They are available if you pay less than 600 to 700 odd euros, don't know the exact figure, French income tax, a situation that many on UK govt pensions may well be in. 

Our experience was that it was worth sending in the P85 but it took a long time to get back that which we had paid, we had to chase them. The point is that we were taxed on all our income bar my govt pension so if we had not claimed the tax back from the UK we would have been taxed twice! I think it is true that we pay less income tax in France than we would have done in the UK though this may not apply to the wealthy! No one on a govt pension is! So yes it is worth putting in I think.......................John in 79

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Hello John,

Thanks, that was very useful.  As you probably guess, the only income I will have at present other than my police pension will be some interest from B/society. 

"you will be taxed in France if this supplementary income exceeds the threshold set by the French tax authorities. "

Are you saying that this interest although taxed in the UK, will also be taxed in France?  If so, is it only the supplementary income i.e savings interest and not my pension that they will set against the threshold. If it is, it will only be £100 plus pm which would be below the threshold?

Do I have a choice where this supplementary income is taxed, and if so am I better off having it taxed in France?  Also, the high interest account with La Poste, is it better than what they are paying in UK at present, about 5% plus with some? (Gross) Perhaps we'll have a look at their website!

Sorry to bombard you with Q's, but with 3 weeks to go before we move, my minds like one of those elastic band balls!

Regards,

Bob

[LesLauriers]

[quote]Hello John, Thanks, that was very useful. As you probably guess, the only income I will have at present other than my police pension will be some interest from B/society. "you will be taxed in ...[/quote]

As I understand it, you will be tax resident in France and whilst your Government pension is taxed in UK it is declared on your French tax return, all other income is taxable in France. By completing the 85 form you will be paid gross on any UK income from your Building society and this will then be taxable after taking account of your UK pension, this exactly the same as the system in the UK.

Income tax in France is not really the issue, the health and social charges are (for most) far far more of an issue (cost). The charges really kick in when your E106 finishes and before your E121 starts unless you are working in France when a whole load of other issues kick in.

If you leave your cash in the UK you will receive around 5% before (French) tax, social charges, health charges and exchange rate volatility. A Livret A or a Codevi account currently pays 2.25% free of any charges. The higher rate account for low tax payers pays around 4%.

Once again I would advise you to take financial advice prior to becoming a French tax resident.

[Teamedup]

My only comment is that some of La Poste's savings accounts have restrictions on the amount one can have in them.

[Jackie]

I would support the view that good financial advice from someone who knows about France and the French system is almost essential.

My feeling is that any income that can be taxed in France will be and that the authorities would expect you to take steps to ensure that you are not taxed in the UK as well by claiming it back or arranging to have interest paid gross etc. The figures that you put on the income declaration form are gross and not net although there is provision to indicate how much tax you have paid in the UK. Not all building societies will do this, i.e. pay interest gross, C&G wont, and we have to claim back our tax from the Inland Revenue each year. There is a standard form for this which you may be able to download off the net.

You need the Fiscal number off the form sent to you by the French Income tax people to declare to the health people so they can work out your contribution once the E106 or whatever runs out. There are very few "Experts" on this on this site and not me for sure as I and others can only report on our experiences which for a multitude of reasons may be different. This link may throw a bit more light on these matters.

http://www.livingfrance.com/instantforum/shwmessage.aspx?forumid=11&messageid=35482#bm35557

One of the posts in the above gives figures for Post Office accounts which were correct at the time it was written.......Bon courage......John in 79

[Redcap]

[quote]As I understand it, you will be tax resident in France and whilst your Government pension is taxed in UK it is declared on your French tax return, all other income is taxable in France. By completing ...[/quote]

Thanks for everyone's input, I'm getting the hang of it now!

I think some of you may be confusing the I/Rev form P85, 'claiming tax on earnings when leaving UK' with form R85 which one gives to the B/society to have interest paid gross.

Don't get angry with me, but am I getting it right that I WILL have to apply to B/society to have % paid gross, or I WILL be taxed twice on it?  Also the high % , tax free accounts with say La Poste, providing I'm under the threshold for tax I don't pay any on this account? Do I pay social charges on this %?

Thanks,

Bob           

[Teamedup]

Jackie, many thanks for posting that link. I know that La Poste is only 'odd' regarding amounts in accounts. Our eldest son had money disappear from his account and then we worked out that they had put it in another sort of account as he had too much money in his account..........  but he was quite disturbed and in a panic when he couldn't account for quite a bit of money (well for him it was).

[Jackie]

I think that you would have to take action to get your building society to pay interest free of tax if they will do this, ours don’t and we have to claim it back at the end of the year from the Inland Revenue. We found that for other sources of UK income, like my wife’s pension which is not a govt pension, the inland revenue, having accepted that we live abroad, instructed those sources not to deduct tax and to pay it gross. I imagine that you have to be living abroad before they will do this but a word with them might clarify the situation. The centre for non-residents, Fitzroy House, PO Box 46, Nottingham tel 0044 115 974 2102 or on-line by email at www.inlandrevenue.gov.uk were very helpful to us although it was about two and a half years before we got this all sorted out with them.

You should not be taxed on the same income in both countries, but as I say, the French may assume that all your interest in the UK is free of tax so if you don’t claim it back or arrange to have it paid gross you could well be taxed in both countries on this! As far as fixing the Fiscal figure (Revenu fiscal de reference) and whether or not you come above the French taxation threshold I am sure that they take your global income into account and that would mean your govt pension, building society interest and any income your spouse receives, as it all goes on the same declaration form. Husbands and wives cannot be taxed separately we are told.

One thing that I found useful when making the conversion from pounds to euros, the declaration is all in euros, was to quote the rate I actually got on my pension transfer. You can have your govt pension in euros and transferred every month to a French bank by the group (Capita?) that deal with all govt pensions. The problem is that the teacher’s pensions are handled by Nat West, I don’t know about the others, so the rate you get is determined by them and is often less than others quoted on the net, but they only charge me a pound a month to do this. Having said that it is not fair to compare with people like HIFX and their rates, which are good for large amounts, when you have a relatively small amount coming over each month. The French tax man has accepted my conversions so far.

The post office livret A and savings accounts are free of tax and need not be declared we are told.  But as I said before I am no expert and professional advice should be sought! 

We find that we pay less tax in France than we would have done in the UK though this may not be true for the better off. In our first year which ran from May and not January the French income tax people actually gave us money back even though we had not paid any tax in France. Le Bon Dieu knows how they worked this out but there you go, shows how small a teachers pension is! They must have thought that we had paid too much tax in the UK!

I have used an accountant in France but feel that this is rather expensive, he saved us less than he charged, for the benefits obtained so next year I will have a go and do the return by myself. You could always use an English speaking one for the first year (See posts about this on LF if they are still there!) and then use the return as a model for future years. It will be interesting to see if the tax man accepts this without seeing all the evidence as he has done so far but then knowing an accountant, who must be honest ha ha, is involved may make a difference, we shall see!………John in 79