2012 Tax Declaration - Private Pensions and Government Pensions

[lyndros]

Would someone tell me please whether I am correct in doing

the following, as advice on the Internet so far is either ambigous or

contraditory:

Private Pensions and Incapacity Benefit

(1) Grouped together in one global sum in Form 2047 Page 1 “Pensions

Retraites, Rentes –Total Des Pensions Et Avantages Et Nature”  GROSS

(State Pensions also go here but NOT Government Pensions)

(2) The same GROSS figure is then put into Form 2042

Page 3 Box  “1AS- Pensions,

Retraites, Rentes”

(3) I am on a Form S1(E121), so the Private Pensions and

Incapacity Benefit are exonerated from the social charges. I will make

reference to this on Form 2042 Page 2 Section E Section E I  “Renseignemnts Complémentaires”, and

attach a copy of my Form S1 to my Tax Declaration.

Government Pension (Local Government)

(4) Enter into Form 2047 Page 4 “Revenus Impoables De

Source Etranger Ouvrant A Un Credit D’Impot Egal Au Montant De L’Impoy Français

Correspondant A Ces Revenu”  GROSS 

No separate figure is given of the UK tax paid on this Pension, as

this is not relevant to the French Tax Authorities in working out the eventual

French Tax Credit on this Pension for the purposes of the Double Tax Treaty.

(5) The same GROSS

figure is put into Form 2042 Page 4  Box

“8TK – Revenus étrangers imposables en France, ouvrant droit à un crédit

d’impot ègal au montant de l’impôt français

(6) The Government Pension is exonerated from social

charges by virtue of the Double Tax Treaty itself. But am I safe in assuming

that by putting in a figure in Box 8TK of Form 2042,  this will NOT attract an automatic liability to these social

charges?.

Your views would be most welcome. Thanks

 

 

[Boiling a frog]

As advice on the internet is ambiguous or contradictory

,apparently,why not pop along to your tax office and ask them.

That is if you believe this advice is neither ambiguous or contradictory, if not then just ignore it.

[JohnRoss]

Hi, you imply that you would not include your UK govt pension in 1AS sum of pensions but only put it in 8TK. Not sure that is right. The Tax faqs on this forum say this:

Q: As a retired teacher, I have a government pension which is taxed at source in the UK. As I have already paid the tax on it in the UK, do I really need to declare it in France?

A: Yes, ‘government’ pensions such as those paid to teachers, civil servants, police and armed forces remain taxable in the UK but they have to be declared in France because the income is taken into account for determining which tax band your other French taxable income falls into. Having declared the pension here, you are then entitled to a corresponding French tax credit so you don’t end up paying tax twice over.

So, on form 2047, your gross pension goes in section I PENSIONS, RETRAITES, RENTES. The total then go across to box 1AS (or box 1BS if it’s your wife’s pension) on the form 2042. Then to get the tax credit, you enter the gross amount of the pension on form 2047 section VI REVENUS IMPOSABLES DE SOURCE ETRANGER OUVRANT DROIT A UN CREDIT D’IMPOT EGAL AU MONTANT DE L’IMPOT FRANCAIS CORRESPONDANT A CES REVENUS then transfer the total across to box 8TK on the form 2042.

I asked the local tax office about this last year and they said that all the pensions should be summed in 1AS and that part which was a Govt pension also put in 8TK for a tax credit. I noted at the time that the tax man used the term pension publique:

Vous avez parfaitement compris.
ligne AS l'ensemble de vos pensions perçues en Angleterre et ligne 8TK (et cadre VI de la 2047) uniquement votre pension publique

and I assume he meant Govt pension as opposed to State pension but you never know! Perhaps someone could confirm that this is right for both our sakes!.................JR

 

[Sunday Driver]

Correct, JR.......[;-)]

Lyndros

As the Tax FAQ explains, if you claim a tax credit by entering your government pension in box 8TK, then you have to have already generated the tax by entering the pension in box 1AS.....

Simple process for you to follow:

All pensions go into box 1AS

Govt pension goes into box 8TK

Tax forms into the envelope and lick stamp.

Put the kettle on.

 

 

[NormanH]

Except that despite this advice, which was also given last year, it didn't actually work like that for many of us.

A lot of offices still used the previous method, as some of us on here can witness.

As I have already pointed out on another thread (and again here) the Notice 2047 NQT-K which deals with filling in the pink Déclaration des revenus Encaissés à L'étranger does not name the Royaume Uni as one of the countries where 'Ce méchanisme d'élimination des doubles impositions est prévu'  (See p3 on the top)

I don't want to abandon the proven method for something that didn't work last year (for my tax office) and find that no crédit is given, but this income is taxed because I have entered in in section VI and transferred it to 8 TK, rather than entering it in Section VII and transferring to 8TI as I have for the last 15 years.

I know about the new regulations and I believe SD and parsnips.

What I am not sure about is if my tax office knows them too..

As I said elsewhere I do as told until instructed to do otherwise.

Looking at the Notice I don't think I have been so instructed...

[lyndros]

Parsnips - thank you for your reply

Norman - When you did it last year using the old method (Section VII and  8TI) , did you also put both private and government pension on Page 1 Form 2047 Pensions Retraites, Rentes?. Also, does a figure in 8TI automatically trigger a social charge contribution?

I went to the Tax Office this afternoon (Vannes). They did not seem to be very sure of the situation, but in the end they said that only Private Pensions go into Section 1 Form 2047. They also said that the Government Penion should be entered into Section VII Form 2047, and the sum then transferred to 8TI Form 2042. I said that they were not correct, so they are going to check the position again and then email me. I must say that I am not waiting with any confidence that they will get the advice correct.!!!!

[NormanH]

" They also said that the Government Penion should be entered into

Section VII Form 2047, and the sum then transferred to 8TI Form 2042"

This is exactly what my tax office said last year, and shows the differences that I posted about above...

[Boiling a frog]

My tax office stated I had completed tax form correctly last year. This was as per sunday drivers post.

I intend to complete it the same this year.

Previously for 16 years I completed it as per Norman H but I was notified last year of the change.

[NormanH]

" I said that they were not correct, so they are going to check the

position again and then email me. I must say that I am not waiting with

any confidence that they will get the advice correct.!!!!"

The point is that they are the authority, not any of us, so their final advice (which I hope will concur with that which you have received here, but may not ) is the one to accept. It is certainly the procedure that they will follow.

I do not disagree at all with parsnips or SD. I share their reading of

the convention, and have even made a spreadsheet for those who want to

use it to show the probably tax liability in France using this system

but

We often find ourselves on this Forum, particularly in Tax matters and comparing CPAMs, that different offices in different regions put different interpretations on what would appear to be clear from the outside.

so

I make certain that I do as I am told by the person who will be dealing with my affairs, but I take the precaution of getting it in writing (email at least) if it seems to differ from what I would expect.

Telephone conversations or 'face to face' initially may seem to sort things out, but if there is no written record it is not easy to prove what was said.

[Sunday Driver]

If anyone is concerned that their local tax inspector might be placing a different interpretation on the tax treatment of their foreign income to that according to the terms of the UK/France dual taxation treaty and the procedures authorised by the Direction Générale des Impôts, they should make a formal demand for a rescrit fiscal.

This is a binding tax ruling covering your specific situation which, once issued, cannot be subject to any subsequent challenge. As such, rescrit demands tend to focus their minds on getting things right rather than offering advice based on guesswork.....

Full details of the rescrit process HERE.

Otherwise, we'll be into the good old "my tax office says this"......"no, my tax office says that"

 

 

[lyndros]

Thanks for your reply.

Just to confuse matters further, my tax office in Vannes also verbally informed me that I should put my pension income in Box 8TL of Form 2047, even though it consists of a Govt Pension ( exempt from social charges by the Double Taxation Treaty) and Private Pensions ( exempt from social charges because I have a Form S1)!!!!.

Any further thoughts or advice fro you or anyone else?

[Boiling a frog]

Private pension goes in form 2047 sec 1 pensions etc gross then transferred to AS/BC on 2042

Govt pension goes in form 2047 gross sec 1 pensions etc and also sec VI to get the tax credit

It then is transferred to 2042 Sec AS/BS and also Sec TK

You can always right on the form that you are the holder of an S1 so not subject to social charges on those incomes.

[NormanH]

I have now done as I  advised others to do, and had a definitive reply which holds good for my office.

I stress that we are just well-intentioned amateurs, and that the competent authority for each person  remains the  office of  French impôts who will deal his or her  Déclaration. You should never trust Anglophone sources, certainly not the Correction, and not even me [:)]

Here is my letter (laugh at the errors in French if you like it was tossed off quickly this morning) and the reply which, for the first time (as implied by the first phrase in the reply ) is now as parsnips and SD have described :

Madame, Monsieur,

J'ai besoin de renseignements pour m'aider à remplir la déclaration

des revenus encaissés à l'étranger (2047-K)

Je suis domicilié en France mais j'ai des revenus encaissés hors de la

France et déjà imposés au Royaume Uni.

Pour éviter la double imposition il y a des conventions. Soit la

France applique un système d'exonération, soit un système d'imputation

avec un crédit d'impôt égal à l'impôt français calculé sur ces

revenus.

Au passé c'était toujours le système d'exonération pour les révenus

provenant du Royaume Uni mais j'ai entendu parler d'un changement

récemment.

La question que je vous pose est la suivante : lequel de ces deux

systèmes est applicable aux revenus encaissés au Royaume Uni sachant

que ce pays ne figure pas dans la liste de pays où le système

d'imputation est prévu (en haut de page trois de la notice 2047 NOT-K)

?

Je vous demande cela parce qu'il y a des conséquences pratiques.

Il faut mettre les revenus ouvrant droit à un crédit à la section VI

et les rapporter à la ligne 8TK de la déclaration 2042, mais par

contre il faut mettre les revenus éxonérés à la section VII et les

rapporter à la ligne 8 TI de la déclaration.

Je voudrais bien savoir quelle démarche à suivre : Système

d'exonération où système de crédit d'impôt ?

Dans l'attente de votre réponse, je vous prie d'agréer, Madame,

Monsieur, mes salutations distinguée

The reply is clear:

En effet la convention avec le Royaume-Uni a

changé. C'est le système du crédit d'impôt qui est appliqué. Donc vos

revenus sont à rajouter soit en pension ou en salaires et à la ligne

8TK.

Cordialement

 

XXXX Yyyyyy

Agent administratif des finances publiques

[lyndros]

Thanks. Are you able to say which tax office dealt with your claim?

[NormanH]

I have sent you a pm

For those interested the spreadsheet for working out a rough  idea of your French tax liability (providing your income is modest) is here

https://docs.google.com/spreadsheet/ccc?key=0AuTBbphDzPcwdDNLVDJUd2VNSVU5Q3p0RERTdlpUOHc

[CeeJay]

Well done again Norman!!

[lyndros]

Received your pm. Thankyou for your help

[Laurier]

NH ... the French looks pretty hot to me ... have made a note of some of the phrases in case I need to trot them out ...

The content is very useful as well!

Thanks

Laurier

[papillon13]

Hi

I need help, for my Dad...

He is retired, he has to complete his declaration.

He has a carte vitale, but the costs are covered by the UK I believe, it was applied for using the S1 or S2 from the UK pension dept.

He receives a state pension, he believes that it falls under 'revenu ouvrant droit a un abattment' That it is not subject to French tax.

I have no idea, he is afraid to put the wrong thing and no he won't go to the tax office to ask.

He is being driven crazy by this, it causes him a lot of stress and anxiety.

I need to be able to explain it sin simple and stress free terms.

Thanks.

[parsnips]

[quote user="papillon13"]Hi

I need help, for my Dad...

He is retired, he has to complete his declaration.

He has a carte vitale, but the costs are covered by the UK I believe, it was applied for using the S1 or S2 from the UK pension dept.

He receives a state pension, he believes that it falls under 'revenu ouvrant droit a un abattment' That it is not subject to French tax.

I have no idea, he is afraid to put the wrong thing and no he won't go to the tax office to ask.

He is being driven crazy by this, it causes him a lot of stress and anxiety.

I need to be able to explain it sin simple and stress free terms.

Thanks.

Hi,

    State retirement pension (OAP) is taxable only in France.   There is a 10% abattement before tax is calculated .  It may help if you tell him that if his net taxable income is under 11948€ (single) or 17990€ (couple) he will pay no tax.  And up to 15834 €(single) or 20616 (couple) the amount of tax due will be quite small.  It really is nothing for him to get stressed about, the tax people have bigger fish to fry than us poor pensioners.

[/quote]

[papillon13]

Hi parsnips

Thanks for your reply.

I'll tell him. What sections does he have to complete?

[papillon13]

Oh, I forgot I had another query...

If you have an investment (capital) that has not made any profit what would you do?

And if it had made profit on top of the capital?

[papillon13]

Perhaps even made a loss?

[papillon13]

Please excuse me, but if his carte vitale was created by an S1 retirement form, what about the social charges thingy?

And he doesn't know how to complete the form, which boxes etc

[parsnips]

[quote user="papillon13"]Hi parsnips

Thanks for your reply.

I'll tell him. What sections does he have to complete?

[/quote]

Hi,

 form 2047 page 1,"pensions,rentes ........etc"  and  form 2042,  page 3 1AS