VERY IMPORTANT INFORMATION RE 2011 DECLARATIONS

[Will]

It would seem that retirement incomes have merely caught up with income from employment, which has always resulted in us having an extra French tax bill of several hundred euros, despite having paid tax in UK on the UK employment part of our income and the French income alone resulting in a very small, or zero, liability. My understanding is that if the combined income puts you into a higher French tax band, then there will definitely be tax to pay in France resulting from the already-taxed UK income.

It's not as simple as 'the same income being taxed twice', it's the French wanting their extra share after the UK has had its piece of the cake.

[JohnRoss]

parsnips your formula, Tax on total income- minus- ( Tax on total x local govt. pension / total income.)

gives what? Actual tax demanded or credit? I have a reason for asking and will explain following your reply, cheers...........JR

[NormanH]

I am still being my slow self, but I would have thought that the formula should be

 Tax on total times (Total-UK Gov)/ Total to give tax payable, or

Tax on Total times Local Gov/Total..to calculate the tax credit ?

Surely the only  income which attracts a credit is that which ha already been taxed in the UK?

(so neither UK OAP nor French income qualify for credits)

As usual I bow to better mathematicians accountants [:D]

[NormanH]

[quote user="Will"]It would seem that retirement incomes have merely caught up with income from employment, which has always resulted in us having an extra French tax bill of several hundred euros, despite having paid tax in UK on the UK employment part of our income and the French income alone resulting in a very small, or zero, liability. My understanding is that if the combined income puts you into a higher French tax band, then there will definitely be tax to pay in France resulting from the already-taxed UK income.

It's not as simple as 'the same income being taxed twice', it's the French wanting their extra share after the UK has had its piece of the cake.

[/quote]

Isn't the UK income simply being used to see where you fit in the French tax bands?

It isn't being taxed itself.

[Araucaria]

[quote user="NormanH"]

Surely the only  income which attracts a credit is that which ha already been taxed in the UK?

(so neither UK OAP nor French income qualify for credits)

As usual I bow to better mathematicians accountants [:D]

[/quote]

Norman - that's only partly right. If, for example, you had a UK government pension that was less than your UK personal allowances (and no other UK-taxable income), you wouldn't pay any tax on it in the UK, but it would still attract a tax credit in France equal to the French tax you would have paid on it. In other countries and under other tax treaties what you say would be right, but this is the UK-France tax treaty and that's what it says.

[NormanH]

Thanks for that. I hadn't thought of that possibility.

[JohnRoss]

I am such a situation where my teacher's pension is too small to attract UK tax but I am still having to pay the French tax people about 314 euros more than last year despite a tax credit so poo!............JR

[NormanH]

Has the use of Gross instead of Net UK income taken you up into a higher French Tax band for some of your tax liability?

[JohnRoss]

No but as our income looks higher because of the inclusion of my teacher's pension more of our income would be taxed at the highest rate tax band that applies though this, the highest tax band that applies, for one part would be the same as last year if that makes sense........JR

PS the on-line calculator and the formula from parsnips seem to give figures close to that which has been asked for, about 28 euros difference in the worst case but still 314 euros more than last year and our other incomes remain little changed.

[Gardian]

[quote user="JohnRoss"]No but as our income looks higher because of the inclusion of my teacher's pension more of our income would be taxed at the highest rate tax band that applies though this, the highest tax band that applies, for one part would be the same as last year[/quote]

 [quote user="JohnRoss"]if that makes sense........ [/quote]

No [8-)]

[JohnRoss]

You take the total income and divide it by the number of family members/parts generating income to give one part on which you calculate the tax bands and tax and then multiply the tax by the number of parts/family members to get the tax to be payed. What I am saying is that one part of our income this year comes into the same tax bands as last year so declaring my teacher's pension in with other income has not altered this..........JR

[Gardian]

[quote user="JohnRoss"] You take the total income and divide it by the number of family members/parts generating income to give one part on which you calculate the tax bands and tax and then multiply the tax by the number of parts/family members to get the tax to be payed. [/quote]

Yes

[quote user="JohnRoss"] What I am saying is that one part of our income this year comes into the same tax bands as last year so declaring my teacher's pension in with other income has not altered this..........JR [/quote]

I have to say that I'm having some difficulty in understanding your difficulty.  Are you saying that you're surprised to receive a higher tax bill because you've declared higher earnings?

[JohnRoss]

Not at all and I am just agreeing with previous posts that many of us on Govt pensions are in fact worse off under the new agreement! The argument that this is a better system and avoids double taxation is clearly faulty. What it does do is make more dosh for the French Govt...........JR

[NormanH]

My moan would be that we can't choose just  to be taxed in France.

I think the UK that is taking a tax which pays for things I don't use, and for which I no  longer have a vote.

No taxation with out representation is my motto..

[Will]

Norman, I could say the same about France. Don't forget that unless you are a French national, your voting rights are limited to municipal and EU elections, and you have no say in the national vote.

[parsnips]

[quote user="JohnRoss"]parsnips your formula, Tax on total income- minus- ( Tax on total x local govt. pension / total income.)

gives what? Actual tax demanded or credit? I have a reason for asking and will explain following your reply, cheers...........JR[/quote]

Hi,

      As I have written it this gives the tax due.  The credit is equal to .................Tax on total income  x  exempt income (govt. pension) / Total income ; this credit is then subtracted ( heading 13) from the total tax charged on the total income , including the exempt income.

      It usually results in a somewhat higher tax bill than the previous system, but , moan as we might, that's the treaty as agreed by the UK government, so we have to put up with it.

[JohnRoss]

I guess we do. Thanks for the formula it gives a result close to the reality. Can you make sense of the post about the UK govt saying the French have got it wrong on the Total France forum, I see you post there?........JR

[NormanH]

Did you try it with mine?

Tax on total times (Total-UK Gov)/ Total to give tax payable?

I would like to test it on a real case...

[JohnRoss]

Yes I did Norman and gives the same result as that suggested by parsnips. The tax asked for is slightly more than I have calculated using both yours and parsnips and the credit a bit less. I am not sure why as I used the figures for taxable income and tax before credit given indicated on the Avis D'impot form. There must be some other factor that is reducing the credit d'impot by about 28 euros but I cannot for the life of me see what................JR

[parsnips]

[quote user="JohnRoss"]I guess we do. Thanks for the formula it gives a result close to the reality. Can you make sense of the post about the UK govt saying the French have got it wrong on the Total France forum, I see you post there?........JR[/quote]

Hi,

      I don't think it was the UK government , just a minion at HMRC trying to get rid of a caller who was questioning him on something he possibly didn't fully understand.  It is useless to quote just what the treaty says, it only sets out principles.  The important information is in the internal instructions to tax offices , which are harder to get hold of , (and understand).  But see here;                                                                                          http://www11.minefi.gouv.fr/boi/boi2011/14aipub/textes/14b111/14b111.pdf

[JohnRoss]

I think my error is in forgetting the 10% reduction on pensions before calculation. If I take 10% off my UK govt pension and take their total tax due before reduction for a donation to charity I can get within 2 euros of their figure using both your formula and Norman's formula. Getting tired now so may be pushing the wrong buttons so will try in the morning when I am fully sober, error, awake!.......JR

[Sunday Driver]

[quote user="JohnRoss"]........I can get within 2 euros of their figure using both your formula and Norman's formula......

[/quote]

I'd quit now whilst you're ahead......[;-)]

 

[JohnRoss]

Ok in the dim light of day the formula to get tax credit that seems to work, well very close, is: using the words on the Avis IMPOT SUR LES REVENUS SOUMIS AU BAREME (14) X 0.9 UK GOVT PENSION/REVENU IMPOSABLE

Whereas tax asked for is Impot sur le revenu net avant corrections (i.e. after reduction for donnation to charity etc) minus tax credit calculated as above.......JR

[JohnRoss]

Just one, no a few questions. What is the Taux d'imposition percentage for? What is its significance and how is it calculated? What is the reduction applied to Revenus de capitaux mobiliers before it is added to other incomes?................JR

[Jamesdee]

I first of all have to admit that I am not skilled at anything other than worrying a bone to death and I am thoroughly confused by this tax change.

I submitted my tax return at the Jonzac office and my Avis duly arrived and was horrendous. On examining the form however i discovered that I had transposed two critical figures. I went to the office and was advised to do a "Rectificative" with a covering letter. Feeling this was beyond me I asked an organisation to do it for me. It was quickly completed and a copy sent to me. On reading through this I noticed that in Box VI of the 2047 my total Military pension was entered. In the next column was a figure I did not recognise but when I asked the question I was told this was the total amount of tax I had paid on my income in the UK. A tax estimate for France was given which was roughly 9 times what I paid the previous year on exactly the same amount of pension and tax paid. I was assured this was correct. When I went back and said that the incorrect tax figure had been applied and that in fact the actual amount paid was over four hundred euros more than had been entered into the form, I was told that even applying that figure produced the same amount of tax liability so there was no point in resubmitting.

I hope somebody has been able to follow this. I have two questions which I hope some kind person can help with. First of all does 9 times last years tax bill sound right? Secondly and probably more importantly, does the total tax paid in the UK impact on the tax calculation made by the French. Is it true that revising upwards by around 450 Euros the figure of tax paid on the form 2047 will have no impact on the tax required by the French authority?

I would be very grateful for any help and offer my thanks in advance.