Tax on retirememt lump sum

[Mary]

Hi all

I'm planning to retire towards the end of the year and join all you lucky people who live permanently in France. My question is this:

If my company pension lump sum comes through after the move how will the marginal rate on the new quotient 15 rules be calculated? If my only income to declare for 2012 is 3 months pension, marginal rate will be 0%, so does this mean there will be no tax payable on the lump sum? Or will the French authorities want to include my UK salary prior to arriving in France as part of the calculation (which would greatly increase the marginal rate!)

Thanks to any tax experts out there who are able to clarify.

 

 

 

[parsnips]

Hi,

    Have a look at this ,you should find an answer to your question.

www.siddalls.net/siddallsinprint/pensionlumpsumsreceivedbyfrenchresidents.html

[AnOther]

For your 1st declaration you only need to declare income from when you became French resident so in 2013 you would declare for the 3 months or so you expect to be here in 2012. Your income elsewhere prior to that is no business of the French tax man.

I think though, as you will not have been resident for the full tax year, if you declare for 3 months your tax may be calculated on a pro-rata basis so depending on your income for that period may not be €0!

TBH though I think most people who move over in the fag end of the French tax year probably don't bother declaring for that year, it's not as though anybody tattoos the precise date you arrive across your forehead !

[Mary]

Thanks both for your responses.

Parsnips - I had read the Siddalls link -looks as though if pension receipts from arrival in say October to 31 December plus 1/15 of UK lump sum give a marginal tax rate of 0% then no tax will be payable on it. I hope my understanding is correct!

 

[parsnips]

[quote user="Mary"]

Thanks both for your responses.

Parsnips - I had read the Siddalls link -looks as though if pension receipts from arrival in say October to 31 December plus 1/15 of UK lump sum give a marginal tax rate of 0% then no tax will be payable on it. I hope my understanding is correct!

 

[/quote]

Hi,

   In my opinion your understanding is correct.