UK pension pot / Question on one-off lump sum payment

[Fleur]

Hi all. As a first-timer here and unfortunately unable to find an answer to my specific question, I am hoping nevertheless my question is right for this forum and that the collective wisdom here can please help us.

My wife (a 58 year old French national/tax resident, not in receipt of any UK taxable income, but still has a UK bank account) has requested a valuation of her UK pension plan in order to receive a one-off lump sum payment as we need the cash urgently for an emergency in France.

The question is therefore whether it will be possible/straightforward to receive the cash into her UK bank account (and deploy the money immediately to address the emergency in France) and deal with French tax declaration afterwards?

Alas, rather tough times for us, so I really appreciate all kind gestures of advice/thoughts/suggestions/pointers.

Thank you very much.

[nomoss]

You don't have to worry about declaring anything in France until returns are due around May next year for money received this year.

Depending on the amount, you may have to inform your French bank where the money came from.

This is just a simple statement, which may be passed on to the tax authorities, who may or may not decide to check that your statement is true.

[EuroTr@sh]

Hi

If you take the money during calendar year 2020, I imagine you would in any case declare it on your next declaration in May 2021, the taxman won't want to know about it until then. And unless it's a massive amount I don't think you would need to pay any tax on it upfront. Even if you do, I believe it's easy enough to adjust your advance payments online. But to be honest I'm not sure how that works or what sources of income it applies to, I've never needed to do that. Someone else will be better equipped to advise I'm sure.

[idun]

Won't the pension people automatically take UK tax off a percentage of the amount.

I say this, as I had a tiny pension, which was paid in full, and when I say tiny, it was less than £200 and I still had tax to pay, which I got back later.

[EuroTr@sh]

It probably depends on what it is, but with some pension schemes you can take up to a quarter (I think) of the total pot tax free in the UK. It's a tax incentive to encourage people to pay into a pension. But of course it wouldn't be tax free if you live in France.

[pomme]

This is a good article Taxation of Pension Lump-Sums in France which describes the various options for taxation in the UK and in France https://www.french-property.com/news/tax_france/lump_sum_pension_payments/

If you are taking a large sum out and paying into a UK bank the bank may want additional information on the source of the funds under the money-laundering regulations and the same may happen when funds are transferred to your French bank

The only concern would be if this is a personal pension plan rather than an employer-run scheme and the plan has not been declared on tax form 3916. A personal plan which you can vary the amounts put in and taken out, etc is a savings plan so should be declared. The fines for non-declaration can be significant https://tinyurl.com/ybokn6xc