VERY IMPORTANT INFORMATION RE 2011 DECLARATIONS

[suej]

 

 I have State pension and Teachers' pension and so would think that I  should be affected but have not received a letter . The forms we have received are vitrually the same as last year.

There seems to be a bit of a pick and choose system of doling out the letters and new type of forms.. 

We'll probably complete these then receive a letter and new forms and request to redo them on about May 29th

[Boiling a frog]

I received my letter today

[allanb]

[quote user="parsnips"]The changes only affect income which by the new (and old ) treaty are only taxable by the country in which they arise ie; rents and government pensions(civil service, teachers etc).  Under the new system ALL income becomes taxable in France...[/quote]Sorry but I don't understand that statement.

Article 20(2) of the previous treaty, under the heading "Government Service", contains this:

Any pension paid by, or out of funds created by, a Contracting State or a local authority thereof, or by a statutory body of either, to an individual in respect of services rendered to that State, authority or statutory body shall be taxable only in that State.

The numbering has shifted, but article 19(2) of the new treaty (under the same heading) contains this:

Pensions and other similar remuneration paid by, or out of funds created by, a Contracting State or a local authority thereof, or, in the case of France, a statutory body, to an individual in respect of services rendered to that State, authority or statutory body shall be taxable only in that State.

There are a couple of changes whose significance I don't know, but it seems to me that the later version repeats the principle that a pension from national or local government service in the UK is taxable only in the UK. 

Second question: can you tell me where the taux effectif system is described (ambiguously or not) in the old treaty?

[Jay]

[quote user="Boiling a frog"]I received my letter today[/quote]

Interesting - I'm dept 16 as well and I have a Civil Service pension taxed in UK. Do you have a government pension froggy? Why the **** can't they explain things properly??

[Patf]

we haven't eceived a letter, and should be affected as we have rents as well as a UK taxed pension;

And they've sent a form 2041 instead of a 2042.

So I'm just going to fill the red one in as last year, and see what happens.

[allanb]

[quote user="parsnips"][quote user="Patf"]What do you think they mean by "tax credit"?[/quote]This is all set out in the "new" DTT which is available on line. "The taux effectif" has been superseded.[/quote]

I am now quite sure that the taux effectif method has not been

superseded or even modified by the new DTT.  As a matter of fact it

couldn't be.  When the calculation is necessary, it's a single

calculation based on all of your income, even if some of it comes from

countries with a different DTT with France, or no DTT at all.

I have now received my declaration forms, but no letter.  Just in case there's any confusion over the forms themselves, the ones I received are nº 2042-K (blue) and nº 2047-K (pink).  There are certainly a few changes in the forms compared with 2009, and I don't pretend to have studied them all, but so far as the famous box TI is concerned:

- the heading of section VII of 2042-K has not changed (revenus exonérés pris en compte pour le calcul du taux effectif)

- the advice on page 1 of the Notice Explicative has not changed (n'oubliez pas ... de reporter ligne 8TI ... les revenus qui ne sont pas imposables en France mais qui doivent être pris en compte pour le calcul du taux effectif).

Of course the treatment of specific kinds of income may have been changed by the DTT, but the notes referred to in Parsnips' first post are nowhere to be seen on the forms that I received.  It will be interesting to see whether all tax offices send out their own version of the explanation.  If so, let's hope it gets clearer as time goes by.

[Boiling a frog]

As I hae already said

I received my pink 2047K along with explanatory notes about 2 weeks ago, These notes and the form seem to be exactly the same as in previous years.

About 1 week ago I received my form 2042K

Yesterday I received a letter, in French from the Impots in Angouleme which laid out where we were to declare various incomes.

On the reverse of this letter was a very bad translation of this letter into English which has already been posted on this forum

There was also a photcopy of certain sections of form 2042 with annotations in English

and also a photcopy of certain sections of 2047 with annotations in English.

[Sunday Driver]

[quote user="Boiling a frog"]There was also a photcopy of certain sections of form 2042 with annotations in English and also a photcopy of certain sections of 2047 with annotations in English.[/quote]

Mystery solved.  There has been no change to the tax forms, merely the method of declaring specific foreign income.

In the past, UK taxable income such as government pensions was not declared under box AS/BS so no French tax generated.  Also declared under box TI for calculation of taux effectif.

Now declared under AS/BS so French tax generated and taux effective calculated.  Also declared under TK to generate the credit wiping out the French tax.

End result the same....

 

[cooperlola]

Thanks, Sunday.  For a while back there I thought I was going bonkers.[:)]

We probably need to get a Mod' to change the FAQ:

Q          As ex service personnel, my partner and I receive a service pension from the UK government and they are taxed at source. As we have already paid the tax on our pensions in the UK, do we really need to declare them in France?

 A          Yes, service pensions are public sector pensions, subject to tax in the UK and covered by the Double Taxation Treaty, but they will still need to be declared in France.  So, on form 2047, your gross pension goes in section VII. REVENUS EXONÉRÉS PRIS EN COMPTE POUR LE CALCUL DU TAUX EFFECTIF - the form explains which figures go where.  You then transfer the total to box TI on your form 2042. 

 

[suej]

 

Just as a follow-up:

We have had no letter  and our 2042K and 2047K seem to be the same as last year.

I have just been to the Tax office with these filled in as per last year, ie with my government teachers' pension in Sec VII of 2047K and carried across to Box  TI on 2042K.

The lady I saw went through both forms with me box by box and said all was correct.

Before I left I did ask if the system remained the same as last year and  she replied that yes it was the same and there had been no changes.

 

I left it at that....   might be something to do with this lovely quiet rural back-water we live in....

 

P S   I do , however, remain on standby - it wouldn't surprise me to get a letter and new forms at any time if pennies start dropping in the Office!

 

 

[Patf]

[quote user="suej"]

Before I left I did ask if the system remained the same as last year and  she replied that yes it was the same and there had been no change 

[/quote]

Sue - I also went to the tax office this morning and asked the same question. She replied "Yes - everything is to be taxed in France now!"

btw I found the other form (2042K) tucked away among all the bumph.[:$]

Does this mean that we will no longer be taxed in the UK on local govt. etc pensions and rents?

Or will this continue as normal, But we declare the gross amounts(before tax) and the french impots will give a sort of refund based on their own levels of tax on such a type of income?

[cooperlola]

[quote user="cooperlola"]

We probably need to get a Mod' to change the FAQ:

[/quote]But possibly not quite yet!![:-))][:-))][:-))]

[suej]

 

 Well there you have it- the diversity of La Belle France!

Yes Patf my understanding of  what the more-informed- than-me people are saying is that really from now on we should be declaring government  pensions gross along with any state Old-age pensions on the front page of 2047 and then in AS and BS and again in Section VI  in 8TK on 2042 , thus our government pensions will be initially taxed by France then a tax credit  given for whatever they theoretically levied .

I'm a bit wary of the effect in the long run, are we going to end up a little worse off over-all once we're in the land of arithmetic-games? Too befuddled to see any further till we see more details when we get the Avis in September.

 Meanwhile I'm in this silly position of giving the lady what she wants to see when I'm now pretty convinced she she's not up to date- but who am I tell her how to do it?  At least thanks to this thread I'm now in a position to be able to do a quick re-run if I'm asked to

Ah well...

[cooperlola]

If you do your Avis on line, then the calculation for the tax due pops up at the end.  It would be interesting to know how anybody who has used the new method will be affected financially.  Does the simulator work for this - can anybody try it out?

My own tax bill (all due here in France so I can't help by being a guinea pig!) has gone up - although not my much - but this was mainly due to more favourable  exchange rates so our pensions in Euro terms went up.

[parsnips]

Hi,

I see that the chaos has commenced!("lady from tax office says all is taxable in france"--true , but not the whole truth, the tax is given back, and the income in question -rents and govt. pensions remain taxed (ONLY) in the UK). The "taux effectif " still exists , but no longer applies to any UK source income. I have obtained from my tax office (Jonzac) another version of "the letter" , but unless you had previously read the original , their version is almost totally opaque. I won't reproduce it here as it would only add to the confusion.

    

[cooperlola]

Sure, the change is in the bureaucracy and should not affect the financial outcome for the taxpayer.  However, if some tax offices truly believe that the tax is now due in France then I can certainly foresee some people getting charged by both countries, unless the new rules are followed so that they get the credit due to them from France.  But ultimately, the best that anybody can do is to go to their tax office and do as they are told there and hope that the outcome is correct - or they can declare on line and follow whichever set of rules they believe will give the right outcome.  At least in the latter scenario, you are told your potential total tax liability in France before you sign, so you can see if the thing is totally wrong before commiting yourself and signing.

Parsnips, I don't see why any additional info' anybody has can make anyone more confused than they already are.  At least with the information people can decide for themselves.

[suej]

[quote user="cooperlola"]

If you do your Avis on line, then the calculation for the tax due pops up at the end.  It would be interesting to know how anybody who has used the new method will be affected financially.  Does the simulator work for this - can anybody try it out?

My own tax bill (all due here in France so I can't help by being a guinea pig!) has gone up - although not my much - but this was mainly due to more favourable  exchange rates so our pensions in Euro terms went up.

[/quote]

 

 Although I'm insisting on completing on paper I'd be interested in this. I wonder if it's possible to use the simulator up to the end and then NOT click Complete or whatever  and just have a look? I might give that a try later on this evening.... 

 

 

[cooperlola]

I know, Sue, that you can use the simulator as often as you like, whenever you like.  What I don't know is if it works for income where tax is paid elsewhere, whereas I'm sure it does if you submit it properly!  I might have a look at the simulator myself, put in some fictional figures and see what the various outcomes look like.

[suej]

 

Good idea Coops.

If at all possible I'd like to try a ' dry run' using the old system and then enter  the same figures using the new system but  the web page probably wouldn't allow it.. Added to which I must shop and cook today or we'll fade away here.

You OK inventing imaginary sums for gross and net gov pensions ?  p m  me if you want to 'borrow' some.

[Patf]

I think I'll try that "dummy run" online too.

I should add that the lady I spoke to this morning in Mirande only checks your figures. The actual working out of tax is done at the main office in Auch.

[cooperlola]

Hmm.  I'm not sure that the simulator works because I cannot seem to get the 2047 up so can't get persuade it to give me the option we need.  Thus, I think that somebody needs to try this by submitting their return on line (where the 2047 is available) since I've already done my return.  If anybody knows how to do a simulation of the 2047 submission, let me know and I'll give it another go.

[Sunday Driver]

I wouldn't get too uptight about all this.

On the basis that no ordinary person reads dual taxation treaties (or even knows what they are) then unless you've received a letter from your tax office instructing you exactly how to complete the tax declaration under the new procedure, then I'd be inclined to just complete it the way you've always done and let the tax office sort things out.

 

 

[cooperlola]

[quote user="Sunday Driver"]

I wouldn't get too uptight about all this.

[/quote]Just keeping myself out of mischief![:)]

[JohnRoss]

Just emailed the Parthenay tax office asking where a teacher's pension should now be declared on 2047-K and 2042-K i.e. Should it now be page 1 of 2047 with other pensions and VI page 4 2047 and not VII and 1AS 2042 with other pensions and 8TK 2042.

Thing is which tax band will they use to calculate the crédit d'impot égal au montant de l'impot français? Hell of a difference between 5.5% and 14%. If I get a reply will post it if anyone is interested...........JR

PS Used this tax calculator but none the wiser just now without knowing the tax band used! http://www3.finances.gouv.fr/calcul_impot/2009/

[Gardian]

Right, this whole thing is getting a bit hysterical !

First thing - the Impots tax calculator won't work for Public Service pensions, so don't waste your time.

Second - as SD, Parsnips and myself have said, the effect for individuals may well vary according to how individual tax offices apply the (apparent) ruling. You won't know till you get your assessment. If they're not 'on the ball', no change. Else see next para.

Third - the financial effect for most people is likely to be minimal, but there will nonetheless be some effect.

I'm watching a bit of TV just now (HIGNFY shortly), but will run a few numbers through my s/s and give you some examples re the 3rd situation.