Big problems ahead?

[Judie]

Pickles,

With reference to your last Telegraph link, I also think FH might be saying that! Interesting one!

[NormanH]

I think we have to see what is finallypassed by the French Government.

The Telegraph has already shown that it really doesn't understand what is happening, whether through stupidity or wilful ignorance.

I won't bore everyone by repeating my explanation.

[Pickles]

[quote user="NormanH"]The Telegraph has already shown that it really doesn't understand what is happening, whether through stupidity or wilful ignorance.

[/quote]

The Grauniad doesn't share the Torygraph's view of Hollande's comments, from reading Simon Hoggart's column.

[parsnips]

Hi,

      Hollande's words can be construed as stating the fact that the imposition of the CSG on sales and rents relating to french sited real estate does not constitute "discrimination " as defined in  article 25, 1  of the treaty , see here;

www.hmrc.gov.uk/taxtreaties/in-force/france.pdf

article 25, 5 is also very interesting.

[NormanH]

Well it is certainly true that the payment of CSG on sales and rents is not "more burdensome than the taxation

and connected requirements to which nationals of that other State in the same circumstances, in particular with respect to residence, are or may be subjected" since residents of any nationality already pay this.

Nor can people complain that they don't get any benefits from the CSG, since the treaty states ' Nothing ...shall be construed as obliging either Contracting State to grant to individuals not resident in that State any of the personal allowances, reliefs and reductions for tax purposes which are granted to individuals so resident."

This is using parsnips interesting link

[Pickles]

[quote user="parsnips"]Hollande's words can be construed as stating the fact that the imposition of the CSG on sales and rents relating to french sited real estate does not constitute "discrimination " as defined in  article 25, 1  of the treaty , see here;

www.hmrc.gov.uk/taxtreaties/in-force/france.pdf

article 25, 5 is also very interesting.[/quote]

Yes, I think that the Torygraph's interpretation of Hollande's words was entirely incorrect. There may be an argument about whether CSG and CRDS payments are tied to the provision of social or health services or pensions etc - in which case it could be argued that the imposition of CSG and CRDS IS discriminatory, since their payment by non-residents does not confer upon them the right to access to such services, but as noted previously, in both the UK and France there are discussions going on about integrating NI (in the UK) and CSG/CRDS into the tax system and therefore it will all become "income  tax" in name - ergo, no discrimination.

Edit: NormanH has already commented on discriminatory issue as well. Yes, I agree.

[NormanH]

Could this be the start of another attempt to put CSG on  the  foreign pensions which are currently exempt for those not à la charge de la France, or am I going a step too far?

[andyh4]

It may not be a prime target, but I am sure it will be a consequence.  The same in the UK by incorporating NI into income tax - ergo no upper limit on level of NI collected.

[parsnips]

[quote user="NormanH"]Could this be the start of another attempt to put CSG on  the  foreign pensions which are currently exempt for those not à la charge de la France, or am I going a step too far?

[/quote]

Hi,

    No. Because exempt pensions are UK source income (unlike french-sited real estate), which is specifically exempt from all french taxes present and future , and the CSG is specified in the treaty as a tax which is covered.

[andyh4]

I read Norman's note differently Parsnips.

I thought the exempt related to exempt from the French Social charges (because the UK issues an S1), and not exempt, as in pensions that are exempt totally from French taxation because they are already taxed in the UK.

[Benjamin]

[quote user="andyh4"]The same in the UK by incorporating NI into income tax - ergo no upper limit on level of NI collected.[/quote]

Now that would be interesting. I wonder which Party would be brave enough to try explaing that move to the Pensioner vote.  [:@]

[Pickles]

[quote user="Benjamin"][quote user="andyh4"]The same in the UK by incorporating NI into income tax - ergo no upper limit on level of NI collected.[/quote]

Now that would be interesting. I wonder which Party would be brave enough to try explaing that move to the Pensioner vote.  [:@]

[/quote]

It was already mentioned in this year's budget statement ...

[Benjamin]

[quote user="Pickles"]

It was already mentioned in this year's budget statement ...

[/quote]

Then I missed it!

The only Budget text I have found is the following link so did they bury it in the small print somewhere?

http://www.hm-treasury.gov.uk/budget2012_fair_efficient_tax.htm

[Pickles]

[quote user="Benjamin"][quote user="Pickles"]It was already mentioned in this year's budget statement ...[/quote]

Then I missed it!

The only Budget text I have found is the following link so did they bury it in the small print somewhere?

http://www.hm-treasury.gov.uk/budget2012_fair_efficient_tax.htm

[/quote]

Have a look at the bottom of page 4 in this document.

http://cdn.hm-treasury.gov.uk/budget2012_complete.pdf

Apparently one of the parameters for the current working party is that pensions would be EXCLUDED from this, but who knows what happens later?

It was also mentioned last year. For the time being, they are looking at synchronising the operation of NI and income tax, but according to Osborne in the 2011 budget, the goal is to merge:

http://www.bbc.co.uk/news/business-12832647

[Benjamin]

Thank you Pickles.

There seems to be a general underlying idea that, somehow, pensioners wont be affected.

Of course I could always shout Boo! at them which seems to make this coalition change tack,  [:D]

[andyh4]

[quote user="Benjamin"][quote user="andyh4"]The same in the UK by incorporating NI into income tax - ergo no upper limit on level of NI collected.[/quote]

Now that would be interesting. I wonder which Party would be brave enough to try explaing that move to the Pensioner vote.  [:@]



[/quote]

 

Retired pensioners do not pay any NI - therefore no impact for them

[Pickles]

[quote user="andyh4"][quote user="Benjamin"][quote user="andyh4"]The same in the UK by incorporating NI into income tax - ergo no upper limit on level of NI collected.[/quote]

Now that would be interesting. I wonder which Party would be brave enough to try explaing that move to the Pensioner vote.  [:@]

[/quote]

Retired pensioners do not pay any NI - therefore no impact for them[/quote]

But what if "NI" suddenly disappeared and was subsumed within a thing called "income tax"? As said earlier, at present it seems that the working party looking at this was told to assume that pensions were to be excluded from consideration, but then again ... who knows? It's not for the immediate future, anyway.

[parsnips]

[quote user="andyh4"]

I read Norman's note differently Parsnips.

I thought the exempt related to exempt from the French Social charges (because the UK issues an S1), and not exempt, as in pensions that are exempt totally from French taxation because they are already taxed in the UK.

[/quote]

Hi,

     I was talking about government pensions, but I see what you mean.  As the treaty defines the CSG etc. as taxes and not social contributions, then the fact that state pensioners  are covered by S1 would appear to become irrelevant, and it could be argued that CSG can be applied like income tax, to UK state pensions, as they are already to the occupational and private pensions of early retirees.  Let's hope the french don't spot this!

[NormanH]

If I now understand it correctly government pensions already taxed in the UK can never be subject to CSG, but as I hinted above the OAP might be.

Is this correct?

And on the UK National Insurance question, if the regulations change could the combined Income Tax and NI then be applied to those pensions taxed at source in the UK?

I can see a situation where one might pay CSG on the OAP in France  and start paying NI in the new combined form on the Government pension in the UK.

Is this too gloomy?

[Frederick]

 

 So is this a U turn on French holiday home rises in taxes....?..    Watch the video  

http://www.telegraph.co.uk/news/politics/9390225/David-Cameron-reassured-over-French-tax-grab-on-holiday-homes.html

[NormanH]

There is absolutely no evidence of that anywhere other than in the ramblings of Telegraph 'journalists' who sell themselves as verbal prostitutes to  masturbate the anti-European, anti Socialist, agenda of the City types who are responsible for the UK recession.

Read the thread and try to catch up.[:)]

[Frederick]

I take it you did not watch the video and heard what was said by the French President and the comments of David Cameron  on  the Presidents statement that  holiday home owners are not being taxed more then  ?  

[Debra]

[quote user="parsnips"][quote user="Aly"][quote user="Sprogster"]The big problem in extending social security charges to EU non residents, is that they would be discriminated against in that unlike French residents they cannot enjoy social security benefits for which they would be contributing. Also these proposed charges would not qualify for relief under any double tax treaty for non residents, not being a tax.

Apparently the UK government have said they will challenge through EU courts if implemented.

Meanwhile not good at all for values of properties in regions popular with second home owners.[/quote]

The social charges have nothing to do with social security or services. Despite the name they are a tax. They were bought in years ago to help with the national debt.

[/quote]

Hi,

    The social charges are now specified as a tax which is covered by the "new" double tax treaty (Article 2) the reason they are being applied to french second homes and gite rents is that the same treaty (Article 6) lays down that income arising from real estate (capital gains and rents) is "taxable" in the country where the real estate is situated -in this case France).  Unlike government pensions which the treaty says are "taxable ONLY" in the country of origin  , the wording of Article 6 leaves it open for the UK also to tax such french income, after giving credit for french tax paid.  

     

[/quote]However, the CSG won't be included in the credit for French Tax paid as it is not specified as French Tax in article 24, where it specifies which taxes will be included in the UK credit for 'French Tax' (items listed in article 2, specifically excluding CSG and CRDS).

[Debra]

[quote user="Pickles"][quote user="Sprogster"]Unless I am missing something the major deterrent factor with the proposals for non resident owners is that they will not be able to get double tax relief, as the additional charges will not qualify as tax under double tax agreements.[/quote]

As I posted earlier, the DTT specifically categorises CSG and CRDS as "taxes" which can therefore be offset in the UK. The problem arises if the UK resident is only liable for the lower rate of UK tax, in which case the extra paid in France cannot be offset.

[/quote]Not true - CSG and CRDS are not included as French Tax which can be offset in the UK and in fact are specifically excluded when items in the list from article 2 are quoted in article 24.

[Debra]

[quote user="Pickles"][quote user="Sprogster"]Also these proposed charges would not qualify for relief under any double tax treaty for non residents, not being a tax.[/quote]

My understanding of the DTT is that it covers "social charges" such as CRDS and CSG (which are named specifically). Am I wrong?

[/quote]They are named as taxes in article 2 but not in article 24 in the list of taxes from article 2 which will be included when the UK credit back 'French Tax'.